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Democrats Unveil Medicare Drug Proposal (Updated)

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House Democrats have drafted a bill that says the secretary of Health and Human Services “shall negotiate” drug prices directly with manufacturers for members of Medicare Part D prescription plans.

The bill, H.R. 4, does not authorize the HHS secretary to “establish or require a particular formulary.”

But H.R. 4 would require the HHS secretary to report to Congress every 6 months on the effects of negotiations on Medicare Part D drug prices, according to a copy of the bill.

Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, is the chief sponsor of the bill.

H.R. 4 could come up for a vote Jan. 12, according to a spokesman for House Speaker Nancy Pelosi, D-Calif.

In the Senate, the Senate Finance Committee has scheduled a Jan. 11 hearing on the prescription drug pricing issue.

Advocates of H.R. 4 will need 60 votes in the Senate, including a number of votes from Republican, to avoid a filibuster and get a drug pricing bill to the floor, Ira Loss, an analyst at Washington Analysis, Washington, writes in a comment on the bill.

“There is a reasonable doubt that there are 60 votes in the Senate to force through a legislative mandate,” Loss writes.

President Bush seems likely to veto the bill if Congress enacts it, and, even if the bill becomes law, its effects on private insurers might be limited, Loss writes.

“Without the authority to create limited formularies and exclude specific products, we are skeptical that this enabling bill, if it were to pass the entire Congress and become law, would provide the Department of Health and Human Services with any leverage,” Loss writes.

A drug manufacturer could simply refuse to offer a larger discount to the government than it has offered to drug plans, Loss writes.

Health insurance industry groups are just starting to review the drug price negotiations bill.

Stiff competition between private companies is what is helping Part D plan members save money, says John Greene, vice president of congressional affairs at the National Association of Health Underwriters, Arlington, Va.

In Congress meddles with Part D pricing, “NAHU is concerned about what effect government price controls will have on the availability of the newest and most innovative medicines,” Greene says.

Health insurers will be working to “demonstrate the value of this new successful, public-private partnership that has delivered significant savings from millions of Medicare beneficiaries while ensuring that limited taxpayer dollars are stretched as far as possible, says,” Mohit Ghose, a spokesman for America’s Health Insurance Plans, Washington.

Links to a copy of the bill and other information about the bill are on the Web at Document Link


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