By Jim McLean
KHI News Service
WASHINGTON, D.C., April, 12 Proposed legislation that would allow Medicare officials to negotiate for lower prescription drug prices is “bad policy,” U.S. Sen. Pat Roberts said today.
The Kansas Republican is a member of the Senate Finance Committee, which is scheduled to work on a Senate version of the bill into the evening so that the full Senate can consider it as early as next week.
Roberts said Democratic leaders are pushing the idea for political reasons. He said a recent report by the Congressional Budget Office found that neither the Senate bill nor a similar House measure would save much money over the current system, which relies on the private drug plans providing the benefit to negotiate prices.
Some advocacy groups have released reports claiming the legislation could save billions of dollars, but a Jan. 10 letter from the CBO to U.S. Rep. John Dingell, the Michigan Democrat who sponsored the House bill, said the proposal “would have a negligible effect on federal spending.”
The House bill has already passed.
“This is not good policy,” Roberts told KHI News Service in his Washington office. “There is no reason for it. There are no savings. And it will lower choice for patients.”
Roberts said his concerns about restricting choice are tied to a provision in the Senate bill requiring the secretary of health and human services to compile a list of studies that compare the effectiveness of drugs. Such a list could then be used by health plans to decide what drugs to cover.
The House bill would require the secretary of health and human services to negotiate with pharmaceutical companies to obtain lower prices for drugs offered to seniors through the Medicare prescription drug program. The Senate measure doesn”t go that far. It lifts a ban written into the original law barring the secretary from negotiating prices, but would not compel him to do so.
The Senate bill also would give government agencies such as CBO access to information about rebates and discounts that drug plans are negotiating with drug manufacturers. The agencies would then analyze the extent to which the plans are negotiating the lowest prices and report back to Congress.
“We”re going to untie the secretary”s hands to help seniors,” Sen. Max Baucus, D-Mont., chairman of the finance committee, told the Associated Press. “When the market isn”t providing fair prices for some drugs seniors need, there should be a way to strike better deals.”
Under the Senate bill, the Medicare drug benefit would still be delivered by private drug plans, and the government could not establish a price list or uniform list of covered drugs.
Medicare officials say the average monthly premium paid by those enrolled in the Medicare drug program is $22 a month, about 40 percent less that the cost estimated at the time the law was passed.
Given that, Roberts said, Congress shouldn”t tamper with the program.
“I just see it as terribly counterproductive,” he said.
The pharmaceutical industry and the Bush administration also oppose the bills.
Last week the Campaign for America”s Future and the Center for Economic and Policy Research released a study saying the legislation could bring savings up to $30 billion per year.
“If the industry knows the bill is not going to help lower drug prices, then why not let it pass? The behavior does not match the rhetoric,” U.S. Sen. Debbie Stabenow, D-Mich., told Congressional Quarterly when the study was announced last week. Stabenow also serves on the Senate Finance Committee.
– Jim McLean is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at 785-233-5443.