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SENATOR'S VIEW: Real Reform Means Real Negotiations for Medicare Part D

(Duluth News Tribune)

February 19, 2010

By: U.S. Sen. Amy Klobuchar, D-Minn.

This month the President holds his meetings with Democratic and Republican leaders on health care. While bipartisan movement on health care reform is a laudable goal, the summit also presents a unique opportunity to resurrect a reform proposal that the White House left on the cutting room floor during last year's health care debate.

It is time to stop handcuffing taxpayers and let the government negotiate for lower prescription drug prices under Medicare Part D.

When Medicare Part D passed in 2003, the bill actually made it illegal for the government to negotiate better drug prices for seniors. Why should private companies be able to negotiate these rates with drug companies and the taxpayers can’t? Why do Canadians pay $188 for a 90-day supply of Lipitor and Americans pay $256?

With rising health care costs busting the budgets of families and businesses alike, sensible health care reform remains a critical issue for all Minnesotans. But kowtowing to the drug companies to win their support while allowing them to reap huge profits off our seniors just doesn't make sense.

As predicted, drug prices under Medicare Part D continue to increase – with annual increases well above the inflation rate.

I recently asked the Government Accountability Office to investigate drug increases and they found that between 2000 and 2008, the prices of over 400 brand-name drugs increased by at least 100 percent, and in many cases, by as much as 500 percent. The study also found that the number of huge price shocks have increased steadily over the last decade.

As a result of these kinds of increases, many patients are forced to split pills, skip doses or not fill their prescriptions at all.

If we want meaningful competition to help lower costs for taxpayers, we must empower the government to directly negotiate lower drug prices for Medicare Part D. We already know it works.

Currently, the Medicaid program and the Department of Veterans’ Affairs directly negotiate drug prices with pharmaceutical companies and have achieved lower prices for patients as a result. On average, prescriptions cost 58% less for patients who receive their medication through the VA than for those covered by Medicare Part D.

One recent analysis shows that allowing the federal government to similarly negotiate the drug prices for beneficiaries in Part D would save $24 billion each year.

$24 billion a year? That's a lot of dollars to leave on the table.

Allowing this flawed system to continue, with taxpayers and seniors paying the bill, is not real health care reform.

Real health care reform means a bill that includes strong cost reforms, protections against insurance company abuses, comprehensive Medicare coverage and help for small businesses.

But real health care reform also requires real changes from business as usual. Allowing the government to negotiate the drug prices for Medicare Part D would start to bring some real changes – creating lower prices for American consumers and injecting new competition into the pharmaceutical marketplace.

The President’s bipartisan health care summit provides the opportunity to reconsider common-sense solutions that we know can work.

36 million seniors can be a pretty powerful political force. Let's let them be a powerful negotiating force and even the pricing playing field with the drug companies.