Mr. Speaker, I have serious reservations about H.R. 4. I am not convinced this provision will do anything to really help lower the price of prescription drugs. I will reluctantly vote for H.R. 4 because it is a priority for the Speaker. I…
Mr. Speaker, I have serious reservations about H.R. 4. I am not convinced this provision will do anything to really help lower the price of prescription drugs. I will reluctantly vote for H.R. 4 because it is a priority for the Speaker.
I would like to submit an article into the Record published yesterday morning in the Washington Post.
The article points out the faulty approach in comparing the Veterans Administration with Medicare Part D, when it comes to drug price negotiations.
While the V.A. is able to offer significant savings in drug prices, it offers a limited formulary. Also, the VA--by law--receives an automatic 24 percent discount from the average price that wholesalers pay.
Comparing Medicare Prescription Drugs to the V.A. system is apples to oranges. I have not seen convincing evidence that the proposal will be effective.
Mr. Speaker, we must do better. We must do more.
In my opinion, this bill (H.R. 4) leads the seniors to believe that we are doing something for them. If we are serious, we would address the ``donut hole.''
Again, I urge my colleagues to review this article, that helps to make my point, and I submit it for the Record.
[From the Washington Post, Jan. 11, 2007]
Experts Fault House Bill On Medicare Drug Prices
(By Christopher Lee)
Democrats are fond of citing the Department of Veterans
Affairs as evidence that Medicare officials could squeeze
lower prices out of drugmakers if the government merely used
its negotiating clout. But that comparison ignores important
differences between the two systems, experts say.
Unlike Medicare, VA by law receives an automatic 24 percent
discount from the average price that wholesalers pay. Its
prices are also low because VA, which prescribes medications
for 4.4 million veterans annually, has a relatively narrow
formulary, or list of approved drugs. The agency secures big
discounts from the manufacturers of a few drugs in each class
by promising not to offer competing drugs. The Centers for
Medicare an Medicaid Services (CMS) is prohibited by law from
adopting such a list for the year-old Medicare drug benefit,
in part because seniors enrolled in what is known as Part D
want to have a wide range of drug choices.
The legislation that House Democrats hope to pass tomorrow
to require the Bush administration to negotiate drug prices
for Medicare would neither permit a formulary nor require an
automatic discount. It would simply require the secretary of
health and human services to pursue negotiations and report
back to Congress in six months.
That is part of the reason that many experts do not expect
the measure to deliver significant savings even if it
overcomes opposition in Congress and escapes a possible
presidential veto.
In fact, the nonpartisan Congressional Budget Office said
yesterday that the House bill would have a ``negligible
effect'' on federal Medicare spending because without a
formulary the HHS secretary probably could not obtain better
drug prices than those negotiated by the many private
insurers who offer Medicare drug plans.
``The federal government can get lower prices, but only if
it's willing to exclude a certain number of drugs from the
formulary,'' said Robert Laszewski, a nonpartisan health
policy consultant in Washington. ``And that's a huge
political leap that I would be very surprised if this
Congress took. I don't think they are going to give CMS any
teeth.''
``The VA is really a different animal than Medicare Part
D,'' said Robert B. Helms of the American Enterprise
Institute, who was an assistant secretary of health and human
services in the Reagan administration.
But Democrats and their allies say that the gulf between
drug prices under the VA system and those under Medicare is
too large to ignore, and that requiring the government to
negotiate prices for Medicare would help narrow the gap
significantly.
On average, prices are 58 percent higher in Medicare than
in the VA system for the 20 drugs most commonly prescribed
for seniors, according to a study released Tuesday by the
nonprofit advocacy group Families USA. The lowest price for a
year's supply of 20-milligram pills of the cholesterol-
lowering drug Lipitor, for instance, was $1,120 in Medicare
and $782 in the VA system, the report said.
``These high prices are devastating seniors,'' said Ron
Pollack, the group's executive director.
Rep. Frank Pallone Jr. (D-N.J.), chairman of the House
Energy and Commerce subcommittee on health, called
eliminating the current prohibition on government
negotiations a ``no-brainer.''
``It makes absolutely no sense to say that the
administration should not be able to negotiate prices for all
these seniors,'' Pallone said. ``There's no way it's not
going to save a significant amount of money.''
Pallone said Medicare could obtain prices similar to the VA
system's even without a formulary. ``I have every reason to
believe that there is enough persuasion power, with different
things that could be implemented by the secretary, that could
get down to those levels,'' he said. He added that Democrats
will consider further changes down the road.
Energy and Commerce Committee Chairman John D. Dingell (D-
Mich.), lead sponsor of the House bill, discounted the
importance of the CBO analysis. ``Common sense tells you that
negotiating with the purchasing
power of 43 million Medicare beneficiaries behind you would
result in lower drug prices,'' he said.
Critics of the VA comparison note that some of VA's costs
are buried in overhead. The department employs the doctors
and nurses who write the prescriptions, and it operates the
mostly mail-order pharmacies through which 76 percent of
veterans' prescriptions are distributed. Medicare does not
have that kind of infrastructure, and seniors have
demonstrated a preference for retail pharmacies, CMS
officials say.
CMS officials also note that about a quarter of the 3.8
million Medicare beneficiaries who get VA health-care
benefits are also enrolled in Part D, in which the choice of
drugs is broader.
``It's apples to oranges,'' former CMS administrator Mark
B. McClellan said of the comparison. ``The VA is a closed
health-care system relying on mail order and a tighter
formulary than Medicare beneficiaries have shown they
prefer.''