Senate move to negotiate Medicare Part D drug prices stalls

Washington -- The drive toward using the government's clout to obtain lower drug prices for seniors ran into a major roadblock late last month when Senate leaders were unable to muster enough support to vote on the issue.

Backers of the Medicare Prescription Drug Price Negotiation Act of 2007 needed 60 votes in the upper chamber on April 18 to limit debate on the measure and allow a final vote. The tally was 55-42 after Senate Majority Leader Harry Reid (D, Nev.) switched his vote to "nay," a move that allows him to bring the bill back for future consideration.

The outcome of the vote threw some cold water on a movement that has the support of the seniors' lobby, consumer groups and many physicians. Current Medicare law prohibits the Health and Human Services secretary from directly negotiating the prices of medications offered under the program's drug benefit, which launched in 2006. This bill would end that prohibition and allow HHS to try obtaining prices lower than those negotiated by the private-sector pharmacy benefit manufacturers that administer the drug benefit.

The AARP and American Medical Association argue that direct federal negotiation would allow the government to use its bargaining clout to secure better deals for seniors. Because both taxpayers and beneficiaries foot a portion of the drug bill, lower prices would benefit everyone, they said.

Drug companies, PBMs and the White House disagree. To achieve deeper discounts, direct negotiation would need to take the form of government price controls -- a move that would result in drug rationing and reduced access, they said. Many Republicans agreed, and only six crossed party lines in the Senate.

A bleak outlook

The Senate defeat for the measure's supporters means that the legislation is likely on the back burner for now, experts said.

The inability of the upper chamber's Democratic leaders to move to final bill consideration indicates that they are having trouble convincing enough people that the Medicare drug program needs such reforms, said Mary Grealy, president of the Healthcare Leadership Council, a group of executives representing a variety of health industry players. Reports showing that Part D costs are coming in under projected levels and that seniors are largely satisfied with the coverage have indicated that drug negotiation is "a solution looking for a problem," she said.

Grealy said health care executives prefer the type of negotiations that the private-sector PBMs undertake to government price-fixing. "It's not just the health plans that we represent that are telling us this, it's the Mayo Clinic."

The Senate vote reaffirmed the continued success of the Medicare drug program and the desire to protect seniors' access to lifesaving drugs, said Pharmaceutical Research and Manufacturers of America spokesman Ken Johnson.

Even if the bill's supporters manage to muster enough votes to move the measure in the Senate, they face tough negotiations to iron out substantial differences with the House bill passed in January. That measure would require, not just allow, the HHS chief to negotiate directly with drug manufacturers. Some key Senate Democrats have expressed wariness about the House legislation's scope.

In addition, both versions of the bill have elicited a veto threat from President Bush, which supporters would not be able to overrule with their current numbers.

Most likely, the issue will be preserved as a political talking point, rather than a policy idea that has real legs, Grealy said. "I always felt it was a sound bite. It just sounds like something they should do, but it doesn't hold up under closer inspection."

But some supporters of the legislation are not prepared to give up the struggle.

"The vast majority of the American people support Medicare negotiating authority to lower drug prices, as do majorities in both houses of Congress, but obstructionist Republicans have decided to filibuster this critical legislation," said House Speaker Nancy Pelosi (D, Calif.). "Democrats will keep fighting until this bill is signed into law and seniors and people with disabilities have access to affordable prescription drugs."

A minority of senators blocked final consideration of the bill against the will of their constituents, said David Sloane, AARP director of government relations.

"Senators should know this issue is not going away," he said.

If Democratic leaders cannot find the 60 votes necessary to force consideration of their bill, they could try attaching the legislation to another measure that has more momentum.

Supporters also could use the upcoming election cycle to their advantage if the issue slips into next year. AARP, for example, said it would record how individual senators voted and pass that information on to its members.