The Senate is seen as likely to act relatively promptly to amend legislation governing the prescription drug benefit under Medicare, but the sweeping modification to the program passed by the House appears to have little support.
The House on Jan. 12 approved legislation that directs the government to negotiate prices for the prescription drug program under Medicare directly with manufacturers. The final vote on the legislation, H.R. 4, was 255-170, with 24 Republicans joining all 231 Democrats who participated. A few minutes earlier, Republicans failed to kill the bill through a motion to recommit, 196-229.
But the vote is regarded as symbolic because the administration had previously issued a statement in which it said that if the bill as passed by the House reaches the president’s desk, he would veto it.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, signaled at a panel hearing on the issue that he would not support the House legislation. And Sen. Charles Grassley, R-Iowa, former chairman and ranking minority member of the panel, said he would filibuster legislation containing such a mandate, but would look for common ground with Baucus on more modest improvements to the program.
In his comments, Baucus said he would most likely merely endorse legislation that would remove language in the 2003 act creating the prescription drug program that bars the government from negotiating directly with pharma manufacturers.
“The ‘non-interference clause’ in the original Medicare Modernization Act is prohibiting us from pursuing constructive efforts to make the benefit work better for seniors,” Baucus said. “The total prohibition on negotiation should be eliminated.”
But, Baucus said, “I see nothing that warrants heavy-handed intervention in this market. We should proceed cautiously with any legislation. But we should proceed nonetheless.”
He explained, “It is clear to me from today’s testimony that there are areas of the drug benefit in which market competition is not working. In some cases, the private market may be failing to provide seniors with the affordable medicines this benefit has promised.”
Taking a middle ground, Baucus said that he “doesn’t buy the argument that the sky will fall on the prescription drug market if we remove this clause.”
He noted that the Secretary of Health and Human Services “has a goldmine of data, the ability to get more data, dozens of agencies, and tens of thousands of public servants at his disposal.
“That is quite a tool box with which to seek fair drug prices for seniors,” he added. “It is time to open that tool box for Medicare.”
In his comments, Grassley voiced support for the Baucus proposal. “If we can come up with something that doesn’t harm the great success of the competitiveness of the 2003 bill, I’m willing to look at it.”
The comments of the Senate Finance Committee leaders mean the House approach is unlikely to even get to the Senate floor and is virtually certain not to win the 60 votes needed to pass the full Senate.
In comments after the House vote, Grassley said: “This is a bill of goods. It won’t work.”
He accused “partisan Democrats” of launching a campaign to smear the new prescription drug benefit. “Unfortunately, the sound bite isn’t sound policy,” Grassley said. “It’s bad for Medicare beneficiaries and other consumers alike. Nobody wins. I hope the Senate will defeat this bill, and if not, I look forward to a presidential veto.”
In its veto message, the administration said it “strongly opposes” the bill, which was introduced by Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, with 196 co-sponsors. Dingell managed the floor debate on the bill for Democrats.
The veto message said the administration interprets the bill as “not only repealing the prohibition against the federal government interfering in negotiations between Part D plans, pharmacies, and drug companies for lower Part D drug prices,” but as requiring the federal government to negotiate directly with drug companies.
The administration said both the Congressional Budget Office and the Department of Health and Human Services actuaries estimate that H.R. 4 “would have negligible or no effect on federal spending and provide no substantial savings to the government or Medicare beneficiaries.”
At the same time, one consumer group urged prompt action on the House bill and criticized the administration’s veto threat.
Ron Pollack, executive director of Families USA, said: “The vote by the House is an important step to make Medicare drug prices more affordable for America’s seniors and taxpayers. Seniors who need multiple medicines are being priced out of the drugs they need, and this will provide real relief for them.
“We urge the Senate to immediately follow suit, and we hope that the President will reconsider his ill-advised threat to veto this bill,” Pollack added.