Medicare drug price push faces hurdles

Experts say price-negotiation legislation has a good chance in the House but will face a stiff fight in the Senate.

By David Glendinning, AMNews staff. Dec. 11, 2006.

Washington -- Democratic lawmakers who will take control of Congress next year quickly plan to pass legislation aimed at lowering Medicare beneficiaries' drug prices. Their hopes, however, may be dashed by the strong opposition that awaits them.

To many physicians and other patient advocates, the first step is relatively simple -- take advantage of the federal government's clout to hammer out better deals from pharmaceutical manufacturers.

But before this can happen, Congress must change a provision in the 2003 Medicare law that prohibits the government from directly negotiating medication prices under Part D. That job is currently handled by private sector pharmacy benefit managers that administer the drug benefit.

Groups that favor such a move received a post-election boost when incoming House Speaker Nancy Pelosi (D, Calif.) announced that she would bring up a direct negotiation measure in her chamber within 100 hours of taking power.

"With a new Congress, we hope we can fix Part D," said Judith Stein, director of the Center for Medicare Advocacy. "Let's implement a Medicare prescription drug program that does not funnel billions of dollars to drug and managed care industries at the expense of older people and people with disabilities."

The American Medical Association supports direct drug price negotiations but not outright government price setting. Groups on the same side as the Association on this issue, such as AARP and the Medicare Rights Center, are hopeful that the Democrats' push will result in the enactment of legislation that results in deeper drug discounts and more generous benefits.