WASHINGTON, Nov. 12 — The Bush administration said on Sunday that it would strenuously oppose one of the Democrats’ top priorities for the new Congress: legislation authorizing the government to negotiate with drug companies to secure lower drug prices for Medicare beneficiaries.
In an interview, Michael O. Leavitt, the secretary of health and human services, said he saw no prospect of compromise on the issue.
“In politics,” Mr. Leavitt said, “most specific issues like this are a disguise for a larger difference. Government negotiation of drug prices does not work unless you have a program completely run by the government. Democrats say they want the government to negotiate prices. What they really want is government-run health care.”
Federal price negotiations would unravel the whole structure of the Medicare drug benefit, which relies on competing private plans, Mr. Leavitt said.
Dozens of plans are available in every state. They charge different premiums and co-payments and cover different drugs. The 2003 Medicare law explicitly prohibits the federal government from negotiating drug prices or establishing a list of preferred drugs.
Representative Nancy Pelosi, the California Democrat who is in line to become the House speaker, has said the House will take up legislation to repeal that ban in its first 100 hours under Democratic control. Senate Democrats have expressed a similar desire. The eight Democrats newly elected to the Senate all say Medicare should have the power to negotiate with drug makers.
Now I'm not going to say that Pelosi's plan to repeal the Medicare drug plan's provision that prohibits the federal government from negotiating drug prices is correct legislation, or flat-out wrong. I have not read up on this bill, or how it may affect the health care mess we're currently in. But I will say this. The Bush administration is wrong in completely rejecting Pelosi's legislation outright, without even considering a compromise solution, or solutions, for allowing the federal government to negotiate drug pricing with the drug manufacturers. There are possible solutions here:
Senator Richard J. Durbin of Illinois, the assistant Democratic leader, has introduced a bill that instructs the secretary of health and human services to offer and operate one or more Medicare drug plans, in addition to those already available. The bill requires the secretary to negotiate prices with the manufacturers of drugs covered by the government-run plans. Ms. Pelosi is a co-sponsor of a similar bill.
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In December 2005, just before leaving office, Mr. Leavitt’s predecessor, Tommy G. Thompson, said he wished Congress had given him the authority to negotiate prices for Medicare beneficiaries, as he negotiated discounts on antibiotics during the anthrax scare of 2001.
Health plans and pharmacy benefit managers use many tools to drive down drug prices. In effect, “you play one manufacturer off against another,” said James R. Lang, former president of Anthem Prescription Management, which administered drug benefits for five million people.
Insurers obtain discounts in return for increasing the use of a particular drug, and they can get bigger discounts by threatening to shift patients to a similar product made by a competing drug company, Mr. Lang said.
The approach that Mr. Leavitt described as unacceptable is already used in other government programs. Under federal law, drug makers must provide a discount, or rebate, equal to at least 15 percent of the average manufacturer price for most brand-name drugs covered by Medicaid, the program for low-income people. Federal law also guarantees discounts for the Department of Veterans Affairs, which negotiates with drug makers to secure discounts on top of those guaranteed by law.
Mr. Leavitt said the veterans program was not a good model for Medicare. The V.A., he said, has its own drug-distribution system and its own pharmacies and limits drug choices more than Medicare does.
Leavitt's predecessor, Tommy G. Thompson, negotiated with the drug manufacturers for discounts on antibiotics during the anthrax scare of 2001, and the Department of Veterans Affairs also negotiates with the drug manufacturers to secure discounts on drugs for veterans. If you think about it, the federal government is imposing "government-run health care," that Leavitt does not accept. The difference here is that these are both much smaller programs than the Medicare system. A federal program for negotiating drug prices with the manufacturers for the Medicare program could seriously cut into the profits for the drug manufacturers--can't allow the Bush administration to go against their corporate interests. What is infuriating here is that the Bush administration’s rejection of compromise to Pelosi’s plan clearly shows that the White House would even want to look into this growing health care problem. President Bush could have asked a Democratic Congress to study this problem in detail and provide a number of solutions. Consider this from the Times:
One potential obstacle to swift action is that some lawmakers, including Democrats, may want to hold hearings. Senator Max Baucus, the Montana Democrat poised to become chairman of the Finance Committee, voted in March against a proposal authorizing Medicare to negotiate drug prices. Aides said that he wanted to give the program more time to work, but that he was willing to consider such proposals.
Pelosi’s plan may not be the right plan, but her attention in resolving this issue is certainly correct for this country. The Bush administration could have asked Pelosi to conduct hearings on this issue, and provide alternative solutions to resolve the out-of-control pricing on drugs. This is an option of compromise. Instead, the Bush administration’s reply was “NYET!”
So the Bush administration refuses to compromise in allowing the federal government to negotiate lower drug prices for Medicare. Is it not ironic that even now, the Bush administration's views of compromise means that the other side must roll over and accept the Bush White House's views on issues and legislation--even now, after the Democrats have taken control of Congress?
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