Perspective               

Medicare Needs to Negotiate Rx Prices

According to Public Citizen, a nonprofit consumer advocacy group, a recent study from the inspector general of the Department of Health and Human Services (HHS) highlights the need for a Medicare drug benefit program that allows the government to negotiate with drug makers for deep discounts on prescription drugs.

The study looked at the prices being paid for medical supplies like wheelchairs and saline solution. It found that if Medicare paid the same prices for 16 health care supplies as the Department of Veteran Affairs (VA), which negotiates with manufacturers for low prices, it could have gotten discounts totaling over $9.5 million, or 56 percent of the cost of those supplies.

Public Citizen says the lesson to be learned from this study is that any prescription drug benefit proposal needs to give the Medicare program the ability to negotiate deep discounts directly with drug makers. They say any other proposal will result in Medicare being overcharged for drugs, making it impossible to come up with an affordable program.

Public Citizen also noted that while the Republicans claim that their Medicare prescription drug proposal will allow Medicare to negotiate drug discounts of 30 percent, in the most recent proposal, there is no language allowing HHS or Medicare to negotiate deep discounts directly with drug makers. Instead, the Republican plan would rely on private insurers and HMOs to provide a drug benefit to people with Medicare, even though Don Young, president of the Health Insurance Association of America has said that private insurance companies do not offer a realistic path to providing a drug benefit to older and disabled Americans.

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