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Ask candidates their views on Medicare drug prices

ASK THIS | March 06, 2006

The Veterans Administration saves taxpayers a great deal by negotiating the prices it pays for prescription medicines, but Medicare, under its prescription drug plan, is barred from negotiating prices. Where’s the logic?

By Morton Mintz

Questions for House and Senate candidates:

Q. Is negotiating prices consistent or inconsistent with fundamental free-enterprise principles?

Q. In Congress, would you seek to prohibit the Veterans Administration from continuing to negotiate drug prices?

Q. What rationale or philosophy of government would authorize the VA but not Medicare to negotiate drug prices?

Q. Was it for the benefit of Medicare beneficiaries and the taxpayers or for the benefit of pharmaceutical manufacturers, health insurers, and lobbyists that Congress, in enacting Medicare Part D, prohibited the government from negotiating drug prices?

Q. Will you seek to preserve or to repeal the prohibition on the government negotiating drug prices for Medicare beneficiaries?

Q. Would you favor or oppose legislation to allow pharmacies to buy drugs for Medicare beneficiaries at the best price paid by the government?

The VA saves the taxpayers vast sums by negotiating the prices it pays for prescription medicines. In 1999, a representative year, the VA paid, on average, half as much for drugs as did Medicare beneficiaries. For example, it bought Prilosec for $59.10 and Zoloft for $115.70; for the same prescription, an average Medicare recipient paid $114.56 and $220.45, respectively.

After surveying 10 popular drugs offered to Medicare recipients through 10 well-known insurance plans, the Democratic staff of the House Government Reform Committee reported in November that they paid average prices 80 percent higher than VA-negotiated prices.

The Medicaid program also negotiates the drug prices it pays.

Medicaid and Prescription coverage under Medicare D
Posted by Arnold Lear -
10/11/2006, 09:46 PM

Morton Mintz identified one area in detail but perhaps could also emphasize the huge benefits the accrued to the pharmaceutical companies and insurers since the non-negotiable aspect applies to Medicaid beneficiaries. Under MMA of 2003 Medicaid beneficiaries HAD to be enrolled in a Medicare D plan to cover allowable drugs. Hence the states had to pay much for for their Medicaid beneficiaries prescriptions since, under required Medicare D plan replacement, NO negotiation is permitted so the states pay excessive drug costs as Mr. Miintz detailed for the VA comparison. The financial pages touted the large financial gains acheived by the pharmaceutical industry that resulted from the larger non-negotiable laws.

The sub-title for the MMA of 2003 ought to include, in addition to
prescription benefits for Medicare beneficiaries, notification that the Medicare D insurers and pharmaceutical manufacturers are also beneficiaries!

What will 2007 offer? CMS will soonrelease the new (and very much modified) Medicare D plans for 2007. Although CMS indicates that most Medicare beneficiaries have been satisfied and DO NOT HAVE to change plans the emphasis should be "check your plans for changes in 2007 that may increase monthly premiums, eliminate donut hole brand name drug coverage, change formulary so some drugs may no longer be covered, eliminate certain coverage in the initial deductible period ($265 in 2007).

The list of caveats is unduly long!! The law was not aimed at helping the frail elderly in income ranges just above 250-300% of poverty. Mark McClellan is politically correct in defending the 2003 law but many recipients might not express similar enthusiasm.

Arnold A. Lear, M.D.
-Medicare beneficiary and counselor to seniors on this issue.

Arnold A. Lear, M. D.

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