Medicare Prescription Drug Price Negotiation Act Passes, Reichert Flunks Another Vote

Today the U.S. House passed yet another long overdue bill, Medicare Prescription Drug Price Negotiation Act. It amended the Social Security Act (42 U.S.C. 1395w-111) that included the following section:

(i) NONINTERFERENCE.—In order to promote competition under this part and in carrying out this part, the Secretary—

(1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors; and
(2) may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.

with the following new language:

(i) Negotiation of Lower Drug Prices-

(1) IN GENERAL- Notwithstanding any other provision of law, the Secretary shall negotiate with pharmaceutical manufacturers the prices (including discounts, rebates, and other price concessions) that may be charged to PDP sponsors and MA organizations for covered part D drugs for part D eligible individuals who are enrolled under a prescription drug plan or under an MA-PD plan.

(2) NO CHANGE IN RULES FOR FORMULARIES-

(A) IN GENERAL- Nothing in paragraph (1) shall be construed to authorize the Secretary to establish or require a particular formulary.

(B) CONSTRUCTION- Subparagraph (A) shall not be construed as affecting the Secretary's authority to ensure appropriate and adequate access to covered part D drugs under prescription drug plans and under MA-PD plans, including compliance of such plans with formulary requirements under section 1860D-4(b)(3).

(3) CONSTRUCTION- Nothing in this subsection shall be construed as preventing the sponsor of a prescription drug plan, or an organization offering an MA-PD plan, from obtaining a discount or reduction of the price for a covered part D drug below the price negotiated under paragraph (1).

(4) SEMI-ANNUAL REPORTS TO CONGRESS- Not later than June 1, 2007, and every six months thereafter, the Secretary shall submit to the Committees on Ways and Means, Energy and Commerce, and Oversight and Government Reform of the House of Representatives and the Committee on Finance of the Senate a report on negotiations conducted by the Secretary to achieve lower prices for Medicare beneficiaries, and the prices and price discounts achieved by the Secretary as a result of such negotiations.

Bush plans to veto the bill because he claims, "Government interference impedes competition, limits access to lifesaving drugs, reduces convenience for beneficiaries and ultimately increases costs to taxpayers, beneficiaries and all American citizens alike."

Right. Let's just leave it to the drug companies, pharmacies and prescription drug plan sponsors to work it all out. They'll all be looking out for Medicare users, and ensuring they can get the drugs for the lowest price. Hogwash!

The pharmaceutical and insurance industries are rife with collusion tactics, and putting patients through the wringer when it comes to reimbursing claims and raising premiums. We've seen health care insurance plans go up in price 20%-30% annually while coverage has gone down.

Please tell me how access to lifesaving drugs is caused by negotiating prices? You know what limits my access to lifesaving drugs? President Bush's one and only veto so far to limit stem cell research, that's what!

The Republican argument that price negotiations will be an inconvenience to beneficiaries is laughable. God forbid people enjoy the inconvenience of lower cost prescriptions! Will it increase costs to taxpayers? It doesn't have to. If competition is truly how things work, then drug companies will be doing what they can to improve access to their drugs and they will lower prices to compete. The fact that hasn't happened is not because the government has been interfering, but because the drug companies have been left to their own devices with impunity.

So how did the final vote turn out? The Medicare Prescription Drug Price Negotiation Act passed 255 - 170. The bill received full Democratic party support, with 24 Republicans joining them. WA-08 Republican congressman Dave Reichert, supported by the pharmaceutical industry during his campaign last year, is delusional in his belief that Medicare Plan D is working (or he has been bought off). He was not one of the 24 Republicans to support opening up the system for the negotiation of better prices for beneficiaries.

Once again, Reichert was on the wrong side of this issue to the detriment of his constituents and all Americans (except those that run the pharmaceuticals).

If Bush can keep his veto pen in his pocket then the new law will affect negotiations and prices for plan years beginning next year.