Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Advocates for Medicare Drug Negotiations See Opportunity in Debt Talks

By Emily Ethridge, CQ Staff

June 21, 2011 -- House lawmakers reintroduced a bipartisan bill requiring the government to negotiate lower prescription drug prices in Medicare, saying they hoped to push the idea in the debt ceiling talks.

Democrat Peter Welch of Vermont and Republican Jo Ann Emerson of Missouri said the measure would save the government up to $156 billion over 10 years—without cutting seniors' benefits.

"If they could agree to make this part of the Biden talks, that would be great for all of us," Welch said, referring to the negotiations being led by Vice President Joseph R. Biden Jr. "We have some optimism that this is an idea whose time has come."

Democrats are eager to show that the growth of Medicare costs can be reduced without fundamentally changing the program. Many Republicans have sought dramatic alterations of both Medicare and Medicaid to cut federal spending.

"Everybody in town, in Washington, understands what is the driver of, really, America hurdling toward bankruptcy, and it is the entitlement programs," Sen. Ron Johnson, R-Wis., said.

But Emerson said the measure, which has stalled in past Congresses, could lead to "substantial savings at a critical moment."

"Before we ever trim benefits to senior citizens, we must consider the efficiency of the programs that serve them," she said. "We have a duty to the taxpayer to get the best bang for the buck, especially on costly pharmaceuticals for which the federal government facilitates purchases in such large quantities."

The Pharmaceutical Research and Manufacturers of America (PhRMA), a group that represents brand name drug companies, opposes the measure and said that Medicare Part D beneficiaries already benefit from discounts negotiated between private plans and drug research companies.

"Many experts, including the [Congressional Budget Office], contend that the only way the government could effectively negotiate lower costs is to limit access," said Karl Uhlendorf , PhRMA deputy vice president. "While we are committed to making the Medicare prescription drug benefit even better, we remain opposed to restrictive policies that would reduce access of medicines to seniors and undermine the program's clear success."

Ever since the prescription drug Part D program was enacted in 2003 (PL 108-173), the Department of Health and Human Services has been prohibited from negotiating drug costs with manufacturers. The Welch-Emerson bill would require such negotiation.

In April, President Obama suggested negotiating lower drug reimbursements with the pharmaceutical industry as a way to lower Medicare costs. His bipartisan fiscal commission on the deficit recommended a similar idea in 2010.

Last week, 67 House Democrats expressed their support, citing "numerous examples" of how the program charges beneficiaries to pay higher prices than they should for prescription drugs. "We strongly encourage you to include this reform in any proposal to reduce the national debt," the Democrats said in a letter to Speaker John A. Boehner, R-Ohio.

Also last week, House and Senate Democrats introduced legislation (HR 2190, S 1206) to require drug companies to provide rebates for Part D program drugs to those eligible for both Medicare and Medicaid, as well as seniors in a low-income subsidy plan.

'They Like to Save Money'

Welch offered a similar Part D negotiating amendment to the health care overhaul bill that did not make it into the final version (PL 111-148, PL 111-152), but said he is more optimistic this time around.

"The times are different now," he said. "The new majority doesn't like the health care bill, but they like to save money."

He added that the Veterans Affairs Department, which does negotiate rates for prescription drugs, pays prices 58 percent lower than Medicare for some commonly prescribed drugs.

Republicans have criticized Democrats for rejecting a proposal to overhaul Medicare included in the House-passed fiscal 2012 budget proposal (H Con Res 34) without offering changes of their own. That proposal would change Medicare from a program that guarantees a range of specified health benefits to one in which seniors receive an annual stipend to purchase private insurance beginning in 2022.

Publication Details