Senate panel approves Medicare drug price bill
By Kevin Drawbaugh Thu Apr 12, 9:56 PM ET
WASHINGTON (Reuters) - The U.S.
Senate Finance Committee on Thursday approved a bill that would permit the government to negotiate for Medicare prescription drug prices, throwing down a challenge to the powerful drug industry.
Moved forward by the committee on a 13-8 vote, the bill is expected to go next week to the full Senate, where debate is likely to be intense, Senate aides said.
The House of Representatives in January passed a tougher version of the bill.
President George W. Bush has vowed to veto the House bill. It would require, not just permit, direct negotiation over prices by the government with drug companies.
Medicare is a national health insurance program that covers more than 40 million elderly and disabled Americans. It was expanded last year to add a prescription drug benefit. Coverage is managed for Medicare by dozens of private companies.
The legislation expanding Medicare -- passed when Republicans ran Congress -- prohibited the government from negotiating over drug prices with manufacturers, such as Pfizer, Merck or Eli Lilly.
Democrats now in charge on Capitol Hill want to eliminate the negotiation bar. They say government negotiation would save money both for the government and for older Americans by helping the private firms get the best drug prices possible.
The negotiation bar prevents "efforts to make the drug benefit work better for seniors. It should be eliminated," said Finance Committee Chairman Max Baucus (news, bio, voting record), a Montana Democrat and the bill's chief sponsor, at a committee meeting.
But many Republicans, drug makers and other opponents say such a move would limit patient choices, while achieving no cost savings. Medicare officials also say drug coverage is working fine now and is costing less than expected.
The
Congressional Budget Office said on Tuesday in letters to lawmakers that allowing government price negotiation could achieve savings among some drugs, but "would have a negligible effect on federal spending."
Iowa Sen. Chuck Grassley, senior committee Republican, said, "Having the government negotiate drug prices for Medicare might be a good sound bite, but it's not sound policy."
At present, he said, the private companies managing the drug benefit for Medicare compete among themselves and negotiate over prices with drug manufacturers.
"We have lower drug prices for beneficiaries, lower program costs for the government, and prescription drug choices ... Competition is working," Grassley said.
Some Senate Democrats endorsed a more forceful approach like the House-passed bill. But they praised Baucus for seeking a political middle ground by leaving price negotiation up to the discretion of the Secretary of Health and Human Services, whose department is in charge of the Medicare program.