Friday, 11 May 2007

The Debate Over Medicare Prescription Drug Prices

Both houses of U.S. Congress voted on legislation to allow the federal government and the Secretary of Health and Human Services to negotiate prescription drug prices with drug and pharmaceutical companies.

Negotiating prices with private companies, which is currently prohibited by law, could help further drive down drug prices for senior citizens whose health is dependent on prescription medications.

The House of Representatives passed their version of the bill in a 255-170 vote, but the Senate came 5 votes short of the required 60 to move their measure to the floor. President Bush said that he would veto both the House and Senate versions if they arrive at his desk.

It’s a polarized debate among federal lawmakers, voting mostly among party lines.

Republicans opposed to the measure argue that allowing the government to negotiate prices with private companies would undermine competition and drive the market to a one-payer, government-controlled system. They also said negotiating prices would not be effective in lowering prescription drug prices.

“Without the authority to establish a formulary or other tools to reduce drug prices, we believe that the secretary [and the government] would not obtain significant discounts from drug manufacturers across a broad range of drugs,” the Congressional Budget Office said in a statement.

Republicans also pointed out that it would be very difficult to compromise on amendments and bill specifics with Democrats, the New York Times reported.

Current Health and Human Services Secretary Mike Leavitt said he would not negotiate prices even if he were allowed to. He also warned the bill could lead to price controls from future administrations.

The Democrats contend that the Senate bill failed because of the close relationships between big businesses and Republicans.

“Senate Republicans have resorted to obstructionism in an effort to protect the drug industry at the expense of our seniors,” said Democratic Senate majority leader Harry Reid of Nevada.

Democrats argue that negotiating prices could provide necessary medications for seniors at more affordable prices, and there’s little reason to block Medicare from doing so.

“The Department of Veterans Affairs is able to negotiate for lower-priced drugs,” added Senator Reid. “HMOs can negotiate. Wal-Mart can negotiate. Why in the world shouldn’t Medicare be able to do that?”

A majority of voters seem to favor the government negotiating drug prices. An AARP poll of 500 Minnesota voters found that 93% were in favor of negotiating drug prices. Another AARP poll of Tennessee voters found that 87% of respondents supported government bargaining.

Overall, the AARP polls found that an average of almost 90% of Americans over the age of 18 wanted to give the government power to negotiate prices.

The drug negotiation issue is predicted to come to the Senate floor again, possibly as an amendment to another spending bill, according to Democratic Senator Ron Wyden of Oregon.

“The fight will go on,” promised Wyden.

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Posted by Insurance Quote at 4:14 PM in Senior Insurance