Senate move to negotiate Medicare Part D drug prices stalls

Any bill passed later this year still would need to survive a veto threat from President Bush.

By David Glendinning, AMNews staff. May 7, 2007.

Washington -- The drive toward using the government's clout to obtain lower drug prices for seniors ran into a major roadblock late last month when Senate leaders were unable to muster enough support to vote on the issue.

Backers of the Medicare Prescription Drug Price Negotiation Act of 2007 needed 60 votes in the upper chamber on April 18 to limit debate on the measure and allow a final vote. The tally was 55-42 after Senate Majority Leader Harry Reid (D, Nev.) switched his vote to "nay," a move that allows him to bring the bill back for future consideration.

The outcome of the vote threw some cold water on a movement that has the support of the seniors' lobby, consumer groups and many physicians. Current Medicare law prohibits the Health and Human Services secretary from directly negotiating the prices of medications offered under the program's drug benefit, which launched in 2006. This bill would end that prohibition and allow HHS to try obtaining prices lower than those negotiated by the private-sector pharmacy benefit manufacturers that administer the drug benefit.

The AARP and American Medical Association argue that direct federal negotiation would allow the government to use its bargaining clout to secure better deals for seniors. Because both taxpayers and beneficiaries foot a portion of the drug bill, lower prices would benefit everyone, they said.

Drug companies, PBMs and the White House disagree. To achieve deeper discounts, direct negotiation would need to take the form of government price controls -- a move that would result in drug rationing and reduced access, they said. Many Republicans agreed, and only six crossed party lines in the Senate.