Democrats Will Review Medicare Prescription Plans
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WASHINGTON — With millions of seniors facing premium hikes for their Medicare prescription plans, Democrats say they have a solution: Use the government’s massive buying power to bargain for rock-bottom drug prices. The Department of Veterans Affairs does it for 5 million patients, they point out, so why not Medicare with its 43 million?
Medicare sets rates for hospitals, doctors, and medical equipment such as power wheelchairs — as well as drugs administered in doctors’ offices. It was only the Republicans’ ideological commitment to the private sector that led them to bar the government from negotiating discounts with drug companies, Democrats contend.
But the VA model might not be readily adaptable to Medicare, some independent experts say. And policy differences among Democrats, along with the Bush administration’s continuing opposition to government price-setting, might complicate the task of reaching a goal Democrats have set for themselves when they take over Congress in January.
Meanwhile, newly announced discounts by drug companies could have an effect on the Democrats’ effort before it gets started. At least one major manufacturer is offering help to seniors who have trouble paying for their drugs.
“From a rhetorical perspective, Democrats may feel like they gain a lot with this issue, but there are many substantive hurdles that the government faces in trying to negotiate prices,” the president of Avalere Health, a consulting enterprise that tracks the Medicare prescription program, Dan Mendelson, said.
“If you look historically at the government’s experience in trying to regulate prices, it’s poor.”
Although costs for the Medicare drug program are lower than the government originally projected, there is evidence that prices could be lower still. A recent Consumers Union study of the prices charged in South Florida for six widely used drugs found that Veterans Administration prices were 54% lower than the average Medicare prices.
“Medicare is overwhelmingly the largest purchaser, and it’s ridiculous for Medicare not to get the best deal of all institutional purchasers,” the executive director of the advocacy group Families USA, Ron Pollack, said. The VA’s experience shows what the potential could be, he added.
