Senate panel OKs negotiating drug prices

An effort to let the government negotiate drug prices on behalf of the elderly and the disabled moved a step closer to reality Thursday with the approval of legislation by a Senate committee.

Democratic lawmakers used their majority status to pass the measure. They said government negotiations in some cases could lower the cost of prescription drugs for Medicare beneficiaries. People in Medicare drug plans now rely on their insurers to conduct those negotiations.
"When you're negotiating on behalf of 43 million people, that's leverage," said Sen. Kent Conrad (news, bio, voting record), D-N.D.

The legislation approved Thursday simply strikes a clause that prohibits the secretary of Health and Human Services from interfering in the negotiations between drug makers, insurers and pharmacies. The committee approved the bill 13-8, with two Republicans, Sens. Olympia Snowe (news, bio, voting record) of Maine and Gordon Smith (news, bio, voting record) of Oregon, voting with the Democrats on the committee.

Sen. Max Baucus (news, bio, voting record), D-Mont., the bill's author, said the prohibition on government negotiations went too far. "We eliminated the government's role in getting fair drug prices for seniors," he said.

Republicans noted that the Congressional Budget Office, in reviewing the measure, found it would have a "negligible effect" on federal spending. Sen. Charles Grassley (news, bio, voting record), 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.

"This bill does nothing more than keep alive a political pandering approach Democratic leaders have committed against Medicare beneficiaries and the public on the issue," Grassley said.

The Bush administration also objects to giving the secretary the authority to negotiate drug prices.

"This is not a debate about lowering the drug costs for seniors. That's already happening," HHS Secretary Mike Leavitt told reporters earlier. "This is a surrogate for a larger issue, which is government-run health care."