By Jeffrey Young - 01/04/07 12:00 AM EST
Although the House Democratic leadership plans to move swiftly to pass legislation requiring direct federal negotiation of prescription drug prices under Medicare, opponents of the policy expect the battle to continue in the coming months.
By taking immediate action on the Medicare Part D prescription-drug benefit as part of her “100 hours” agenda soon after the 110th Congress convenes today, House Speaker Nancy Pelosi (D-Calif.) will make it nearly impossible for drug makers, health-insurance companies and lobbies to stop the bill from passing.
Because the Democratic leadership also intends to skip the committee process and limit the Republican minority’s ability to amend such early bills on the House floor, interest groups that want to obstruct additional federal involvement in Part D are looking forward.
Under the proposal, expected to hit the House floor as early as next week, the Department of Health and Human Services (HHS) would be required to negotiate with drug manufacturers on the prices they charge Medicare for their products, although the legislation would be short on specifics, according to reports.
Many Democratic candidates, as part of a nationwide strategy, made bulk negotiation of drug prices under Medicare a recurrent theme of their campaigns. Republicans and their allies in the healthcare sector countered by pointing to the high levels of satisfaction with Part D that beneficiaries have reported to independent pollsters.
Under current law, HHS is expressly forbidden to participate in or influence negotiations between the private companies that administer Part D on behalf of the government.
The administration and congressional Republicans generally regard negotiations as tantamount to federal price-setting, a view shared by anxious drug makers.
President Bush and HHS Secretary Mike Leavitt have repeatedly rejected negotiations, arguing that the private health insurers and pharmacy benefit managers that administer Part D plans are doing a better job lowering prices than the government could.
In the past, the Congressional Budget Office has backed up these assertions, although other analyses, such as one issued in October by the Democratic staff of the House Government Reform Committee, conclude that the Department of Veterans Affairs and other federal agencies pay less for many commonly used medicines than Part D plans do.
Healthcare businesses that stand to lose from Democratic action on Part D, led by the pharmaceutical sector, responded to the Democrats’ electoral victory in November by signing on additional Democratic lobbyists and preparing to play defense on the new majority’s attempts to make changes to Part D.
The efforts are not expected to bear fruit during the early weeks of the 110th Congress, but lobbies are anticipating attempts by congressional Democrats to propose a larger role for HHS in the negotiation of drug prices.
Rep. Pete Stark (D-Calif.), who chairs the Ways and Means Committee’s Health Subcommittee, has pledged his support for the narrow bill headed for the floor, but also has suggested that additional legislation on drug pricing should be considered under Medicare.
According to members of the health-insurance industry, the debate over Part D will last longer than 100 hours.
“Our function will be to continue to show that our plans are providing value” by offering affordable drug coverage to Medicare beneficiaries and bringing down the price of medicines, a spokesman for America’s Health Insurance Plans, Mohit Ghose, said. “We’re open to making improvements [to Part D] provided that we’re not undermining the successes that we’ve already achieved.”
Affected healthcare lobbies also are looking forward to the Senate’s consideration of the issue. Senate Majority Leader Harry Reid (D-Nev.) joined Pelosi in promising during the campaign that Congress would pass legislation establishing federal negotiations of drug prices.
Such legislation faces less certain prospects in the more closely divided upper chamber. Finance Committee Chairman Max Baucus (D-Mont.), who was one of only two Democrats who helped draft the bill that created Part D, has not endorsed the leadership’s plan.
Although Baucus has issued strong criticisms of the Bush administration’s handling of the drug benefit, he does not share the view of many other Democrats that its structure is fundamentally flawed.
Moreover, Baucus has opposed legislation to establish HHS negotiation of drug prices. Twice last year, Baucus and Sen. Ben Nelson (D-Neb.) voted against such bills.