The powerful pharmaceutical lobby is pushing back against campaign-trail calls to allow Medicare to negotiate drug prices on behalf of millions of seniors enrolled in Part D.

The Pharmaceutical Research and Manufacturers of America (PhRMA) argues that price negotiations are already being undertaken by insurance companies and pharmacy benefit managers, bringing Part D costs down well below the program's initial projections.

"That’s the marketplace in action and that’s how America’s seniors will see true savings without compromising the search for future cures," Wes Metheny, PhRMA senior vice president, said Tuesday in a statement.

In August, Medicare officials provided evidence for those claims, announcing that average monthly premiums for Part D beneficiaries will be roughly $30 next year — about $1 more than the average rate in 2010.

More recently, though, Avalere Health came up with significantly different numbers. The Washington-based policy group found that the average premium under the drug benefit will jump by 9.5 percent in 2011 — largely due to cost spikes expected in the enhanced-plan market.

Part D is emerging as a prominent campaign issue in some races. In Kentucky, for instance, state Attorney General Jack Conway has made Medicare negotiation a central message in his race to replace outgoing Sen. Jim Bunning (R-Ky.). He argued this week that empowering Medicare to negotiate drug prices — much like the Veterans Health Administration does today — would save taxpayers tens of billions of dollars each year. 

"We need to make certain that Medicare can engage in bulk purchasing," Conway said Monday.

But PhRMA warns that the VA's savings results only because the agency limits the number of drugs available to beneficiaries — a message supported by the Congressional Budget Office.

"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 patients in need and undermine the program’s clear success," Metheny said.

Last fall, House Democrats included Part D negotiation in their healthcare reform bill, but Senate leaders — bound by an agreement with PhRMA — didn't follow suit. It was the Senate bill that ultimately became law. 

Kentucky Senate hopeful Rand Paul (R) warned this week that the patient protections contained in the new healthcare reform law will destroy the insurance market. The Tea Party favorite wants to roll back the law to allow companies to decide for themselves what services they'll cover.

"What I would like to see is a more market-oriented approach," Paul said Monday, responding to the question of whether he supported the law's central insurance reforms, some of which took effect last month. 

Paul said provisions of the "Patient's Bill of Rights" — including the prohibition on denying coverage for pre-existing conditions — "can sound really good on the face of it" but will have harmful consequences over the long haul. 

"Right now I buy insurance — and I'm healthy — but I buy it in case I might get sick. If you tell me I can get it for the same price after I'm sick, why do I buy it?" Paul asked during Monday's debate with his Democratic opponent, Jack Conway. 

"If you give perverse incentives to customers to say, 'Why buy insurance?' then what happens is healthy people drop out, and the system becomes more burdened with sick people. It's really destroying a marketplace."

To discourage healthy Americans from dropping out, the reform law includes a requirement that all Americans purchase health insurance or pay a financial penalty. The individual mandate has been one of the most hotly contested provisions of the law, with more than 20 state attorneys general filing suit challenging the mandate's constitutionality. 

Paul, however, didn't mention that during Monday's debate.

Senators from both parties are urging their leaders to remove a ban on generic drug settlements from an appropriations bill that will be considered during the lame-duck session.

The provision would end the practice of brand-name drug makers settling patent challenges from generic manufacturers by paying them to delay their products.

The Federal Trade Commission (FTC) argues the settlements are a form of collusion that keeps cheaper generics off the market and says banning them would save American consumers at least $3.5 billion a year in cheaper medications.

The Health and Human Services Department (HHS) is accepting applications for $335 million in grants to help community health centers serve low-income patients, the agency announced Tuesday.

The grants — part of $11 billion in new funding for community health centers included in the health reform law — will be available to existing facilities able to demonstrate the money will expand capacity and care for the underserved (and underinsured) patients they tend to treat.

“These new investments will allow existing health centers to improve and expand vital primary health care services, and continue to meet the increased demand for services,” Mary Wakefield, head of the Health Resources and Services Administration, said in a statement. 

Earlier in the month, HHS announced the recipients of $727 million in grants for community health centers — funding also included in the new healthcare law.

Applications for the new grants are due Jan. 6.

The Senate Democratic candidate in Kentucky wants to rein in Medicare spending by allowing the government to negotiate prices directly with drug makers — a proposal rejected by Democrats as part of a healthcare reform deal cut with the pharmaceutical lobby last year.

State Attorney General Jack Conway (D), running to replace retiring GOP Sen. Jim Bunning, said the deal represented a missed opportunity to save taxpayers hundreds of billions of dollars.

"It made no sense to me, in talking about trying to achieve savings in Medicare, that a sweetheart deal was cut with the pharmaceutical companies," Conway said during a Monday night debate with GOP candidate Rand Paul. "The Medicaid system negotiates for lower prices. The VA system negotiates for lower prices. 

"If Medicare were allowed to do that … it would be $200 billion — that's 200 billion with a "B" — in savings. That's some real money."

When Congress created Medicare's prescription drug benefit in 2003, the law explicitly prohibited the government from negotiating with drug makers on behalf of the millions of seniors who would enroll in the program. 

The law also moved low-income seniors — those eligible for both Medicare and Medicaid — into Medicare drug plans. Previously, those "dual eligibles" got their drugs through state Medicaid programs, which are allowed to negotiate prices directly with pharmaceutical companies.

Those provisions brought the drug lobby behind the bill, but didn't come cheap for taxpayers. Indeed, a 2008 study from the House Oversight and Government Reform Committee found that the government currently pays about 30 percent more for dual eligibles’ drugs under Medicare than it would under Medicaid.

A more recent analysis from the National Committee to Preserve Social Security and Medicare found that allowing the government to negotiate Part D prices would save taxpayers $24 billion each year.

That didn't happen. Instead, in the early months of the healthcare reform debate, Senate Finance Committee Chairman Max Baucus (D-Mont.) reached a deal with the Pharmaceutical Research and Manufacturers of America (PhRMA) vowing not to allow government negotiation if the powerful lobbying group would support the bill. As part of the deal, PhRMA also agreed to put up $80 billion toward the cost of the bill over the next decade — most of that dedicated to closing Part D's coverage gap.  

Conway on Monday also pushed a plan to establish Medicare anti-fraud units in every state.

"I know from having Medicaid fraud units on the ground in each and every state that we're able to stay close and understand what's going on and ferret out fraud," he said. "The problem with Medicare is it's done from a big bureaucracy. I mean, put it in the AG's office or put it in some other office, but just have someone on the ground."

Conservative Republican senator thinks repeal is "highly unlikely" but predicts a "change of heart" for some Democrats.

Why, when faced with a childhood obesity epidemic, would the federal government continue to subsidize corn-based sweeteners suspected of contributing to the problem?

That's the question being posed Tuesday by several leading research physicians at Mount Sinai, who took out an ad in The New York Times asking why Congress subsidizes corn starch but not cauliflower. 

"High-fructose corn syrup [HFCS] now represents 40 percent of the non-calorie-free sweeteners added to U.S. foods. It is virtually the only sweetener used in soft drinks," write Philip Landrigan, Mount Sinai's dean for global health; Lisa Satlin, chair of the pediatrics department; and Paolo Boffetta, deputy director of the school's Tisch Cancer Institute. "Because of the subsidies, the cost of soft drinks containing HFCS has decreased by 24 percent since 1985, while the price of fruits and vegetables has gone up by 39 percent."

It's no coincidence, the doctors claim, that childhood obesity — which has tripled over the past 30 years — is skyrocketing at the same time that HFCS consumption has done the same.

Congress has contributed  — in 2008, lawmakers passed a five-year, $307 billion farm bill that provided billions of dollars in subsidies to farming families earning as much as $2.5 million per year, and often times more. Corn farmers were among the top beneficiaries. 

The law also created a new program to have the government buy surplus sugar for ethanol production. Critics noted that the provision reduces market supply, keeping sugar prices artificially high on the grocery store shelves — and encouraging food and soft-drink manufacturers to use less expensive corn sweeteners.

Although then-President George W. Bush tried to block the farm bill  — arguing that the subsidies shouldn't go to wealthy farmers — lawmakers from both parties stepped in to override his veto.

If Congress ever hopes to get the childhood obesity problem under control, health experts argue, a new look at farm subsidies will be vital. 

"Curbing the obesity epidemic requires a multifaceted approach: education, increased physical activity, healthy school food, promotion of unprocessed foods — and a change in agriculture policy," the doctors write. "Coordinated national leadership is essential." 

Experts would prefer a government authority sets the rates, or an all-payer system.

By a wide margin, specialists are paid more than doctors in general practice, according to an independent report released Monday.

In a nationwide survey, researchers at the University of California, Davis, found medical specialists are paid as much as 52 percent more than primary-care physicians.

The trend — while hardly news within the medical community — nonetheless quantifies some of the gaps in physician compensation that are encouraging more physicians to enter lucrative specialties and avoid general practice. 

The result is not only much higher healthcare costs for everyone, the researchers warn, but a less healthy population as patients lose access to preventive care services. 

"Addressing the generalist-specialist income gap is critical to increasing access to cost-effective preventive care," J. Paul Leigh, professor at the UC Davis Center for Healthcare Policy and Research and lead author of the study, said in a statement. "There is a huge shortage of primary-care physicians, and in years to come many more of them will be needed to meet health-care reform goals."

After examining the wages of more than 6,000 physicians nationwide, researchers compared hourly wages of various specialties versus primary-care doctors — a break from many other compensation studies that have focused on annual pay.

The findings, based on figures from 2004 and 2005:

• Primary-care doctors — including those focused on pediatrics, geriatrics, family practice and internal medicine — made $60.48 per hour.

• Internal medicine and pediatric sub-specialists — including those focused on immunology, gastrointestinal conditions, cardiovascular diseases, rheumatology, pulmonary medicine, critical care, medical oncology and neonatal care — pulled in $84.85 per hour.

• Other specialists — like those focused on radiation oncology, rehabilitation, emergency medicine, psychiatry, neurology, ophthalmology and dermatology — made $88.08 per hour.

• Surgeons brought in $92.10 per hour.

The difference between the primary-care and specialist salaries adds up to millions of dollars over the physician's lifetime, according to Richard Kravitz, a professor of internal medicine and investigator with the Center for Healthcare Policy and Research. 

"There is this sense that society simply doesn't value primary care," Kravitz said.

The study was published in the latest issue of the journal Archives of Internal Medicine.