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Medicare Drug Program News
Rep. Waxman Investigates Profits of Medicare
Prescription Drug Plans
Wants to know if plans pass negotiated savings on
to beneficiaries
 Feb.
12, 2007 - The
House Oversight
and Government Reform Committee on Friday held a hearing
about how private insurance plans and pharmacy benefit managers
negotiate prices with drug manufacturers for government prescription
drug programs and whether these discounts get passed on to consumers,
CQ HealthBeat
reports.
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Committee Chair Henry Waxman (D-Calif.) also on
Friday said that he planned to send a letter to the Medicare program and
to insurers that offer Medicare prescription drug plans requesting
information about the discounts offered by drug manufacturers and how
the discounts impact beneficiaries.
At the hearing, witnesses discussed the impact of
the 2003 Medicare law, which prevents public disclosure of the prices
that drug plans pay manufacturers for prescription drugs. The lack of
transparency means that the federal government cannot assess how well
market forces are operating in Medicare Part D, according to Gerard
Anderson, a health policy professor at
Johns Hopkins
Bloomberg School of Public Health who spoke at the hearing.
If legislation passes mandating government
negotiation for prescription drug prices, the
HHS
secretary would need to know the actual prices paid for drugs by private
plans and PBMs, Anderson said.
The administration counters that private plans and
PBMs that negotiate with drug manufacturers on behalf of the government
are able to negotiate lower prices and government inference is
unnecessary.
The hearing also discussed the prices paid by
Medicaid and the "340B Program" run by the
Public Health
Service, which provides federally funded health clinics with
access to lower-priced brand-name and generic prescription drugs.
Meanwhile, CMS released data showing that
prescription drug plans under the Medicare drug benefit are widely
distributing generic drugs, accounting for 60% of drugs dispensed
through Medicare drug plans (Reichard, CQ HealthBeat, 2/9).
Comments
Waxman said he worries that "billions of federal dollars that should
be buying needed care are instead adding to drug company profits." He
added that he would use responses to the letter to "assess whether high
drug costs are increasing beneficiary costs and wasting taxpayer dollars
in the Medicare drug program" (Brady, Congress Daily, 2/9).
HHS spokesperson Christina Pearson said, "We have a
substantial record showing that a competitive marketplace is working for
seniors in Part D. Premiums have gone down, the Part D program costs
less than originally estimated."
She continued, "Those have gone down but enrollment
and beneficiary satisfaction continue to go up as shown by multiple
independent surveys. The numbers show that Part D is a very successful
program for people with Medicare and taxpayers" (CQ HealthBeat, 2/9).
Medicare Fraud
At the hearing, Waxman also indicated that he will boost federal
efforts to bring fraud cases against pharmaceutical firms, CQ HealthBeat
reports (CQ HealthBeat, 2/9). James Moorman, president of
Taxpayers Against
Fraud, said that drug makers have "plenty of ways in the
complicated system to inflate prices" (Congress Daily, 2/9).
The
Department of
Justice has a backlog of 150 cases of alleged fraud by
pharmaceutical companies, according to Associate Deputy Attorney General
Ron Tenpas. Since 1999, the federal government has collected more than
$5.3 billion from fraud investigations, Tenpas said (CQ HealthBeat,
2/9).
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