DEMOCRATS' MEDICARE NEGOTIATION BILL MERELY SYMBOLIC, OBSERVERS SAY
Congressional Democrats' plan to reduce Medicare costs through government-run drug-price negotiation falls short of expectations and is an empty gesture that fails to give the government the leverage it needs, sources say. But the bill's proponents reject that view.
The bill says the HHS secretary "shall negotiate" with companies for Medicare Part D drug prices, according to a copy of the legislation obtained by FDAnews. Critics said this means the bill does not make it mandatory that the HHS secretary negotiate with drug companies for lower Medicare costs.
But the bill's authors believe that "shall negotiate" means that HHS is required to do so, a senior Democratic staff member said, adding that "'shall' is legislative language for 'must.'" The bill's requirement that HHS report periodically to Congress about its progress in instituting direct negotiation places additional pressure on the agency, the source added.
The legislation also doesn't give the secretary authority to require formularies or limit companies' access to Medicare plans. Consequently, the government lacks the ability to exclude companies that refuse to negotiate with HHS from participating in Part D, sources said.
"If this bill was sent to the FDA, FDA would find it 'safe' but not 'effective,'" Alec Vachon, president of the consulting firm Hamilton PPB, said. "The bill gives no new leverage to [HHS Secretary Mike] Leavitt to negotiate prices. What happens if drug manufacturers say 'No' to bigger discounts? Nothing!"
Peter Pitts, director of the Center for Medicine in the Public Interest, agreed, adding that the proposal is "a plan that is high on rhetoric, low on substance."
But exclusion from formularies is not the only tool that the government has to force companies to negotiate, the Hill staffer said. HHS could set up a certified list of preferred drugs to steer the public toward products manufactured by companies that negotiate with the government. HHS may be "using information as the primary weapon here."
The draft be can be seen at www.fdanews.com/images/dingel_0011.pdf (http://www.fdanews.com/images/dingel_0011.pdf).