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Medicare Drug Program News
Bush Administration Does Not Want to Negotiate
Medicare Drug Prices
HHS Secretary tells
New York Times he sees no compromise
 November 13, 2006 The Bush administration will
"strenuously oppose" legislation authorizing Health & Human Services to
negotiate for better Medicare drug prices from the drug companies,
according to a report today by Robert Pear in the New York Times.
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Pear interviewed HHS Secretary Michael O. Leavitt,
who told the Times reporter that he saw no prospect of compromise on
this issue, which was one of the top priorities from Democrats in the
recent congressional elections.
It was reported that the pharmaceutical companies
poured millions of dollars into the campaign coffers of Republican
candidates, hoping to avoid a plan for negotiating drug prices as they
must do with the Veterans Administration. A recent survey found the VA
pays 48.2 percent less for the 20 drugs most frequently used by senior
citizens. Another study in Florida by Consumers Union found the VA
paying less than half the price on six key drugs in the Medicare drug
plans.
In late October, as election day apporached, the
Wall Street Journal reported the pharmaceutical company political
contributions were giving many Republicans a political edge over their
Democrat opponents.
According to the Journal, "with a Democratic
victory increasing likely, few recent elections have been so critical"
for pharmaceutical companies, in large part because Democrats have
promised to revise the Medicare prescription drug benefit to "take away
most of the advantages it handed to pharmaceutical companies."
House Minority Leader Nancy Pelosi (D-Calif.)
pledged that Democrats, in the event that they took control of the
House, within the first 100 hours will seek to revise the Medicare
prescription drug benefit to allow the federal government to negotiate
directly with pharmaceutical companies for discounts on medications.
It is a pledge that has been repeated since the
Democrat victories taking control of both the House and Senate.
In addition, Democrats have proposed "lifting a ban
on the broad-scale reimporting of inexpensive drugs," and they might
seek to "toughen the drug-approval process," the Journal reported.
In politics, Leavitt told the New York Times,
most specific issues like this are a disguise for a larger difference.
Government negotiation of drug prices does not work unless you have a
program completely run by the government. Democrats say they want the
government to negotiate prices. What they really want is government-run
health care.
The Times' Pear reported that Secretary Leavitt did
not want the power to negotiate drug prices. I dont believe I can do a
better job than an efficient market, he said.
We are seeing large-scale negotiations with drug
manufacturers, but they are conducted by private drug plans, not by the
government, Mr. Leavitt said. A robust marketplace with a lot of
competitors has driven down prices. Its the magic of the market. To
assume that the government, in our genius, could improve on this belies
the reality of a complex task.
In December 2005, just before leaving office, Mr.
Leavitts predecessor, Tommy G. Thompson, said he wished Congress had
given him the authority to negotiate prices for Medicare beneficiaries,
as he negotiated discounts on antibiotics during the anthrax scare of
2001, according to today's Times report.
>>
For the rest of the New York Times story, click here.
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