Ban on negotiating Medicare drug prices under pressure
WASHINGTON » Donna Weiner looks at Medicare’s prescription drug program from two different points of view.
As a participant, she wants to pay less for her medicines, which cost her about $6,000 a year. As a retired accountant who spent 50 years handling the books for companies, she sees a way to get there.
“You know from working in a business that it makes no sense for an administrator of a plan or a company not to be involved in what they have to pay out,” said Weiner, who lives near Orlando, Florida. For Medicare “to negotiate those prices down would be thousands of dollars back in my pocket every year,” she said.
Negotiating Medicare drug prices is the linchpin of President Joe Biden’s ambitious health care agenda. Not only would consumers see lower costs, but savings would be plowed into other priorities such as dental coverage for retirees and lower premiums for people with plans under the Obama-era health law.
To do that, Congress would have to change an unusual arrangement that’s written into law.
When lawmakers created Medicare’s Part D outpatient prescription drug program in 2003, they barred Medicare from negotiating prices. Republicans who controlled Congress at the time wanted insurers that administer drug plans to do the haggling. Medicare was sidelined, despite decades of experience setting prices for hospitals, doctors and nursing homes.
“I don’t know of any other situation where the government has one hand tied behind its back when dealing with people like big pharma,” said Sen. Ron Wyden, D-Ore., who is leading efforts to draft the Democratic plan in the Senate.
Known as the “noninterference clause,” the ban has been unbendable. That’s the way the pharmaceutical industry wants to keep it.
Former Medicare administrator Andy Slavitt recalls proposing a “modest experiment” on pricing. “You would have thought we had pressed the nuclear button and the country was going to blow up,” he said.
Drugs costing tens of thousands of dollars a month were rare when the prescription benefit was enacted nearly 20 years ago. Now they have become more common, and Democrats want to allow Medicare to negotiate over high cost brand-name drugs with little or no competition, as well as insulins.