Snowe helps reintroduce bill to allow negotiation on drug prices

WASHINGTON – Two senators who voted for a 2003 Medicare reform bill have again proposed legislation to change it.

Sens. Ron Wyden, D-Ore., and Olympia Snowe, R-Maine, Tuesday proposed giving the government the ability to negotiate Medicare drug prices directly with pharmaceutical companies.

The pair introduced a similar bill last year, saying the measure could significantly lower drug prices for seniors.

But a group representing administrators of prescription drug plans for private employers and health insurers said the Wyden-Snowe proposal could drive up costs in the private sector.

The proposed legislation would give Health and Human Services Secretary Mike Leavitt authority to negotiate lower prices for drug purchases through Medicare, and require his department to provide the public with information about savings in various plans available to seniors.

“With drug prices rapidly outpacing inflation, seniors could experience a reduced benefit with the cost to the federal government increasing dramatically,” Snowe said at a Capitol news conference.

“We cannot wait until 2006 when the Medicare prescription drug benefit comes into effect. We must address it now,” Snowe said.

“Giving bargaining power to millions of seniors through Medicare is Economics 101, and it’s clearly time to inject these common-sense solutions into the Medicare drug benefit,” said Wyden.

A group representing pharmacy benefit managers – who administer prescription drug plans for more than 200 million Americans – said the Wyden-Snowe plan would cause a massive cost-shift to the private sector.

“Direct negotiation is simply shorthand for higher costs and fewer choices,” said Mark Merritt, president of the Pharmaceutical Care Management Association.

The bipartisan bill is co-sponsored by Sens. Dianne Feinstein, D-Calif., Russell Feingold, D-Wisc., and John McCain, R-Ariz.

Snowe and Wyden voted for the Medicare prescription drug benefit in late 2003, but promised to work to improve cost-savings for seniors. Wyden and Snowe both serve on the Senate Finance Committee, where the bill is expected to be referred.

Feinstein, who also voted for the 2003 law, said the Medicare prescription bill “should have been an opportunity to help America’s seniors afford their prescription drugs – not to provide the pharmaceutical companies with a massive government-sponsored subsidy.”

Since the law was passed, it has become clear the government should use its purchasing power to negotiate lower prices, Feinstein said.