Americans Back Price Negotiations On Medicare Drugs

By Christopher Lee
Washington Post Staff Writer
Saturday, December 9, 2006

A new poll shows that the overwhelming majority of Americans favor allowing the government to negotiate prescription drug prices for the Medicare program, suggesting there will be considerable political pressure on the next Congress to do so.

Eight-five percent of the 1,867 adults polled in the Kaiser Family Foundation survey released yesterday said they favored such negotiations, including majorities of Republicans, Democrats and independents.

For weeks, House Democrats have pledged to use their majority control of the next Congress to repeal a provision in the 2003 Medicare drug benefit law that prevents the government from engaging in drug price negotiations. Yesterday, a top aide to House Speaker-elect Nancy Pelosi (Calif.) said Democrats would pass legislation in the first 100 hours directing the Bush administration to use its bargaining power. The White House opposes the move.

"Given the administration's opposition to doing anything, I think there was a feeling we had to go a little bit further," said Wendell Primus, Pelosi's adviser on health issues. "It will be very simple language. We do not think that Congress needs to hammer out all the details. There are a lot of smart people in the administration that can look at how we're buying drugs . . . and figure out the best way of negotiating better prices with drug companies."

Coming up with a more comprehensive plan for how negotiations would work will take more time, Primus said. Any plan would have to win approval by the Senate and President Bush.

Under the current program, which enrolled 22.5 million people this year, its first, dozens of private insurers offer Medicare drug plans in each state, competing on monthly premiums, choice of drugs and access to pharmacies. The financial pressure is on insurers, through their pharmacy benefit managers, to negotiate the best prices they can with drug companies and pharmacies, say proponents of the system.

Getting the government involved could be logistically difficult and would not necessarily lower drug prices, they argue. Because one way to win discounts is to favor some drugs over others, opponents add, beneficiaries could face a more limited choice of medications and lobbyists might influence which drugs are available. And if the government succeeds in holding down prices, the pharmaceutical industry has argued, that could discourage the development of new drugs.

Julie L. Goon, special assistant to Bush for economic policy, said that Medicare beneficiaries are saving an average of $1,200 a year on drugs and that the existing program is popular and efficient.

"The government doesn't do a particularly good job of negotiation," Goon said. "I think it would be a mistake to open up the political process to what particular prices are available for drugs."

Critics of the current system say the Department of Veterans Affairs, which by law receives a mandatory discount on drugs, also negotiates effectively to secure better prices for the 4.4 million veterans who use its drug benefit. They argue that, with a pool of as many as 43 million beneficiaries, Medicare would have considerable muscle to force price concessions.

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