Tuesday, November 28, 2006
The Boston Globe - Nov. 27: To win the pharmaceutical industry's support for a drug benefit for Medicare, the Republican-led Congress in 2003 approved a bill that prohibited Medicare from using its market power to drive down prices for the drugs it buys, the way Medicaid and the Department of Veterans Affairs do. The new Congress under Democratic leadership should not just grant Medicare that authority but mandate the creation of a government drug-purchasing plan for Medicare that could compete with existing private plans and give beneficiaries a choice.Many Democrats campaigned in favor of granting Medicare the power to negotiate drug prices, and the issue is likely to be at the top of the new majority's to-do list for its first 100 hours in January. But that action would have just symbolic value if the bill is enacted but Medicare chooses not to use the price-bargaining authority. That is why Congress should actually require the creation of at least one government drug-purchasing plan for Medicare.Half of all prescription drugs go to Medicare beneficiaries, an indication of the program's potential market power. But when an agency like the VA negotiates for lower drug prices, it does so in part by limiting the array of medications offered for specific conditions. A Medicare-administered plan would have to be careful not to deny its members the newest and most promising drugs on the market. This, in turn, could reduce savings.In 2004, a study by the nonpartisan Congressional Budget Office came to the conclusion that Medicare could not arrive at substantially lower prices than the private sector even with this negotiating power. Medicare's own actuaries agree. Opponents of a Medicare-run drug-purchasing plan also point to the estimated 1 million veterans who have left the VA program in favor of privately run Medicare plans.On the other side, Bush's first secretary of health and human services, Tommy Thompson, said when he left office in 2004 that he regretted the clause in the Medicare bill prohibiting it from negotiating drug prices. Thompson had seen the benefit of centralized purchasing of drugs during the anthrax attacks in 2003, when he bargained hard for cheaper supplies of the antibiotic Cipro.The best way to settle the disagreement between those who see little virtue in a Medicare-administered drug-purchasing plan and those who support it is to require Medicare to set up and operate a plan of its own. Such a mandate should be part of any legislation Congress passes to take back the Medicare drug program from the pharmaceutical companies that hijacked it in 2003.
posted by kanth
@ 2:17 PM
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