House passes bill requiring Medicare drug price bargaining

The measure still faces a tough Senate debate and a veto threat from President Bush.

By David Glendinning, AMNews staff. Jan. 29, 2007.

Washington -- The House on Jan. 12 approved legislation that would require the federal government to negotiate lower prices for Medicare drugs. The move was welcomed by many physicians and seniors but decried by Republican congressional leaders and the Bush administration.

The Medicare Prescription Drug Price Negotiation Act of 2007 passed by a vote of 255-170 and moved to the Senate, which may take up the bill as is or consider its own proposal. The House measure instructs the Health and Human Services Dept. secretary to bargain directly with drug manufacturers to secure deeper medication discounts for Medicare's seniors and disabled people.

Currently, this job is left to pharmaceutical benefit managers, which are private-sector firms that administer the drug benefit for health plans. The law that established Medicare Part D specifically barred the federal government from interfering in that process.

The House bill would remove that prohibition and require the HHS chief to report back to Congress every six months on the progress of negotiations. If the legislation is enacted before the end of the session, the first discounts and rebates could start showing up in the 2008 plan year.

The American Medical Association is one of a number of organizations, including the AARP, that supports direct negotiation. Both groups said the federal government's bargaining clout would drive down drug prices, resulting in lower costs for Medicare and for the seniors who pay a portion of the total bill for their medications.