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Senior Citizen Politics
Bill to Negotiate for Better Medicare Drug Prices
Passed by Finance Committee
Amended S. 3 expected to go to full Senate next
week
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Chairman Max Baucus (D-MT), left,
and Ranking Member Chuck Grassley (R-IA), right |
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April 13, 2007 – The Senate Finance Committee last
night approved a final version of a bill that will allow, but not
mandate, the Secretary of Health and Human Services to negotiate for lower
drug prices in the Medicare prescription drug program. The bill,
authored by Chairman Max Baucus (D-M), amends S. 3, the Medicare
Prescription Drug Price Negotiation Act of 2007, which is now expected
to be considered by the full Senate next week.
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Most news is bad news for
proponents of bargaining for drugs - Jan. 11, 2007
Read more
on
Politics for Senior Citizens |
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In addition to striking the language in the 2003
Medicare Modernization Act that prohibits the HHS Secretary from
interfering in price negotiations for the drug benefit, the mark also
provides for greater transparency in drug pricing for the Medicare
benefit, and seeks to give doctors and patients more information about
the comparative effectiveness of drugs and other medical treatments.
The legislation passed late Thursday on a 13 to 8
vote, with two Republicans joining the Democrats – Sen. Gordon Smith of
Oregon, ranking member and former chair of the Senate Special Committee
on Aging, and Sen. Olympia Snowe of Main.
“From now on, when America’s seniors are paying too
much for their medicines, every Health and Human Services Secretary will
have an additional tool to help them,” said Baucus.
“Tonight the Finance Committee made smart changes
to the Medicare drug program. The Senate should seize the opportunity
next week to exercise good judgment and make the drug benefit work even
better for our seniors.”
A summary of the original Chairman’s mark can be
viewed on the legislation page of the Finance Committee website.
Tonight, Baucus added a number of his Finance Committee colleagues’
amendments to the mark. Accepted amendments will:
• Permit the sharing of Medicare part D claims data
with states (Rockefeller amendment)
• Require disclosure to Medicare beneficiaries of
information about drug costs at point-of-sale (Bingaman amendment)
• Express the sense of the Senate on the need to
revisit the asset test for determination of eligibility for the
low-income subsidy (Grassley amendment)
• Express the sense of the Senate on the need to
address pharmacy issues under the Medicare prescription drug benefit
(Grassley amendment)
• Prohibit the Secretary from entering into a
contract with an outside entity or an Inter- Department Agreement for
the purposes of conducting government negotiation for prescription drug
prices under part D (Hatch amendment) ~
Republican opponents noted that the Congressional
Budget Office, in reviewing the measure, found it would have a
"negligible effect" on federal spending, according to Associated Press
writer Kevin Freking.
“Sen. Charles Grassley, R-Iowa, said the bill made
for a good sound bite, but not effective policy. He said the program is
already costing less than expected and that Medicare beneficiaries say
they're happy with the drug benefit,” Freking reported in his
AP report in Newsday.
The AP writer noted that the Bush administration
also objects to giving the secretary the authority to negotiate drug
prices. He quoted HHS Secretary Mike Leavitt as saying, “This is a
surrogate for a larger issue, which is government-run health care."
Background Information
Statement of Sen. Max Baucus (D-MT) Regarding
Medicare Drug Price Negotiation
(Issued prior to Thursday’s session)
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Background from KaiserNetwork.org Daily Report –
April 12, 2007
The House in January passed a bill (HR
4) that would require the
HHS secretary to negotiate prices directly with pharmaceutical
companies under the Medicare prescription drug benefit and report to
Congress in six months.
The Senate legislation would lift the ban barring
the HHS secretary from negotiating drug prices. Under the bill,
congressional agencies such as the
Congressional Budget Office would be given access to information
about rebates and discounts that drug plans are negotiating with drug
manufacturers. The agencies would use the data to inform Congress on how
the drug plans are performing with regard to decreasing costs.
The bill also includes a provision that would
require the HHS secretary to compile a list of research and studies that
compare the effectiveness of drugs and medical devices, which could be
used by insurers to decide which drugs to cover (Kaiser
Daily Health Policy Report, 4/11).
Earlier versions of the Senate bill would have
required the HHS secretary to negotiate prices. The new Senate language
"has put Baucus awfully close to getting the 60 votes necessary to beat
back an inevitable filibuster attempt" by Senate Finance Committee
ranking member Chuck Grassley (R-Iowa),
Roll Call reports (Pierce, Roll Call, 4/12).
The bill likely will be considered by the full
Senate next week, according to Senate Majority Leader Harry Reid
(D-Nev.) (Pear,
New York Times, 4/12).
Comments
Baucus said, "This legislation will help to
highlight places where drug prices may be out of whack, and then let the
secretary go to work" (Johnson, CongressDaily, 4/11). Sen. Olympia Snowe
(R-Maine) -- who previously introduced legislation with Sen. Ron Wyden
(D-Ore.) that would require the HHS secretary to negotiate prices for
certain drugs -- said she was "surprised and disappointed" that Senate
Democratic leaders were not trying to win approval for mandatory
negotiations.
"I would have thought that, since the Democrats are
now in control, they would have tried to do more," Snowe said (New York
Times, 4/12). Wyden said, "It's important that we prevail" in passing
the Baucus bill, adding, "That's the first step."
Sen. Byron Dorgan (D-N.D.) said that senators will
bring amendments to the floor requiring price negotiations (Schor,
The Hill, 4/11).
Grassley said, "I'm open to ideas to make
Medicare's prescription drug benefit work better for Medicare
beneficiaries and taxpayers. But a government takeover of Medicare
plans' successful negotiations with drug companies is not the answer"
(CongressDaily, 4/11).
Grassley added that a recent CBO report finding
that Baucus' legislation would have a negligible effect on federal
spending "blows another hole in all the political pandering that's going
on with this issue" (CQ HealthBeat 4/11).
"Reprinted with permission
from kaisernetwork.org You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.” |
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Forty-five years ago, not far from this site,
President John F. Kennedy said: “Let us never fear to negotiate.”
Today, we meet to consider whether we can allow the
Government to negotiate over drug prices. Some find that prospect simply
too frightening. Some would argue that the only thing that we have to
fear is negotiation itself. But my Colleagues, I believe that we are
made of sterner stuff.
Today we consider legislation that has generated a
great deal of controversy. Proponents and detractors of negotiation have
voiced strong opinions. But my Colleagues, the legislation before us
today is nothing to fear.
Let me start from the beginning. First, what is the
noninterference clause?
The noninterference clause prohibits the Secretary
of Health and Human Services from interfering with the negotiations
between drug manufacturers and pharmacies and drug plan sponsors.
Essentially, the clause bans the Secretary from affecting the prices
that Medicare pays for drugs.
What was the purpose of the noninterference clause?
When we created the Medicare drug benefit, we could
only imagine how it might work. In some respects, our work was
theoretical. First, we established a private-sector delivery approach.
That is the foundation.
Next, in an abundance of caution, we went a step
further. We went what I am now convinced was a step too far: We tied the
hands of the Secretary of Health and Human Services with the
noninterference clause. We eliminated the Government’s role in getting
fair drug prices for seniors.
Now, the drug benefit exists. It is in its second
year. And while it is not perfect, it is working for millions of
Americans. We need to do all we can to make it work well for everyone.
Now that the program is established, it is time for
us to look at it from a longer-term perspective. Our initial concerns
about whether there would be enough interest from beneficiaries and from
plans are behind us. From here on out, our responsibility is to monitor
and guide the program as it matures.
Looking at the program today, the noninterference
clause is an unnecessary hindrance. We want the Secretary to use tools
in the tool box so to help shape the drug benefit into a strong and
thriving program. It is time to untie the Secretary’s hands.
I cannot recall when so few words caused as much of
a stir as the noninterference clause. Whether seniors and Medicare are
getting the best prices evokes passionate debate, as does the
appropriate role of government in health care. The philosophical divides
in this debate are ones we have struggled with before. It is no wonder
this issue is so hot politically.
But we must put politics aside. We must tackle this
issue once and for all. I am anxious to have the Finance Committee
consider this legislation, because it is the right thing to do. We need
to take this step so we can move on to other aspects of the program.
Just to name a few, we need to look at CMS
oversight of private plans. We need to address pharmacy access. And we
need to revisit the low-income subsidy asset test. I hope and expect
future improvements to the drug benefit will be bipartisan. So why
strike the noninterference clause?
We should strike it, because we know the drug
benefit is not perfect. We should strike it, because we cannot envision
every scenario or situation in the future of this program. And we should
strike it, because we must untie the Secretary’s hands and make sure the
toolbox is available.
It is important to note what striking the clause
does not mean. It does not mean the Secretary can impose price controls
or set drug prices. It does not mean the Secretary can create a national
formulary. It also does not mean the Secretary can administer pricing.
Nor does it mean the Secretary can intervene in the market in a
heavy-handed way.
We want the Secretary to be able to check under the
hood. And if there is a problem, we want the Secretary not to be barred
from doing something about it.
I believe that the Secretary has a role or
responsibility here — short of creating a national formulary. The
noninterference clause prohibits us from pursuing constructive efforts
to make the drug benefit work better for seniors. It should be
eliminated.
I have included policies regarding transparency and
comparative effectiveness in the mark. They are key to the issue of drug
pricing and represent steps the Secretary should take as a good steward
of the Medicare program. They are also areas of bipartisan interest when
it comes to drug pricing.
It is clear that we need a better understanding of
prescription drug pricing in the Medicare market. We also need to know
more about the effectiveness of the drugs Medicare pays for. I believe
increased transparency and use of comparative effectiveness will make
Medicare a smarter shopper and help us evaluate the success of the
program.
I am not trying to write the book on these issues
with this mark. But we should move forward.
I anticipate many more policy discussions this year
and more progress. I hope today’s mark up will initiate that dialogue
and start us down a path toward improving and strengthening the Medicare
drug benefit.
It has been a long road to get to this markup. I
want to thank my Colleagues who paved the way. Senators Wyden and Snowe
have led us through the many policy considerations and put forth
thoughtful legislation. Senator Stabenow and Senator Smith have also
devoted a great deal of time and effort to this issue. I appreciate all
of their hard work and commitment to making the Medicare drug benefit
better.
I also want to thank all the Members who gave me
thoughtful input as we put this mark together. The mark represents a
common desire to make sure seniors have access to affordable medicines.
It symbolizes our shared concern about how Medicare dollars are spent.
And, most importantly, it shows our continued willingness to move
forward and make improvements.
So, let us not fear to negotiate. Let us not fear
to improve the Medicare drug bill. And let us continue in our effort to
bring the best to America’s seniors.
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