Calling it “a travesty on the taxpayers,” U.S. Sen. Angus King is pressing to secure congressional approval to let Medicare negotiate lower prescription drug prices.
The proposal would allow the government health care program for seniors to seek volume discounts from pharmaceutical companies that provide drugs for Medicare Part D’s 41 million participants.
Since the passage of prescription drug coverage for seniors during President George W. Bush’s first term, Congress has barred Medicare from trying to haggle for lower prices, a provision that Republicans insisted on from the start after pharmaceutical companies argued that without it they might have a hard time coming up with the profits necessary to invest in new research.
King said, though, it is “beyond common sense” to let Medicare try to lower the prices of drugs that seniors need.
Based on the negotiated prices secured for Medicaid and the U.S. Veterans Administration, King said that allowing Medicare to follow suit could save $24 billion a year. Medicare spends about $100 billion on prescription drugs each year.
President Donald Trump has indicated a number of times that he agrees. Just last week, his press secretary, Sean Spicer, said the president is still for it.
“His commitment is to make sure that he does what he can” about drug prices paid by the federal government “and, I think rather successfully, use his skills as a businessman to drive them down,” Spicer said.
During the campaign, Trump once vowed that when “it comes time to negotiate the cost of drugs, we are going to negotiate like crazy.”
“Here’s a place I agree with Donald Trump,” said King, an independent who is Maine’s junior senator.
But, he cautioned, “I’m still waiting to see him put something on paper.” Without a new law, the president can’t talk prices with the drug companies.
Maine’s senior senator, Republican Susan Collins, has called for lower drug prices but hasn’t signed on to this or similar bills in recent years. She did, however, join Democrats in an unsuccessful attempt in 2007 to force a Senate vote on the proposal.
King has been trying for several years to secure a green light from Congress to allow Medicare to negotiate on drug prices, something only private plan sponsors can do now.
The Medicare Prescription Drug Price Negotiation Act, though, faces a tall hurdle that has blocked similar measures in the past: The pharmaceutical industry has been the largest lobbying group in Washington for at least the past two decades.
The bill currently has 12 senators who have signed on to it, all of them Democrats except King. Republicans hold a majority of the seats in both the House and the Senate.
But King and other backers hope that Trump’s support might give the measure a strong push.
King recalled that when prescription drug coverage for seniors was enacted more than a decade ago, he noticed that the program’s huge costs could be tamped down if the government could negotiate prices with drug-makers.
He said he thought from the start that the ban on negotiations was outrageous and should be removed.
The price of drugs purchased for Medicare patients is often negotiated now, just not by the government directly. Prescription drug plans that participate in the Part D program can negotiate prices directly with drug companies, and almost always do. That helps hold down costs.
The Congressional Budget Office said years ago, and has never changed its stance, that negotiations would have only “a negligible effect on federal spending” because the participating private plans already have the ability to haggle over drug costs.
Critics of drug-price negotiations by Medicare also point out that the government lacks much leverage to force down prices because it would have a hard time telling any manufacturer that it wouldn’t buy the drug at a higher price, something private insurers usually can threaten.
More than 80 percent of Americans back the idea of allowing Medicare to negotiate prices for prescription drugs, a 2015 Kaiser Family Foundation poll found.
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