Legislation would allow states to negotiate lower prices

Congresswoman Chellie Pingree joined Congressman Chris Van Hollen (D-MD) today to introduce a bill that would allow states to negotiate with drug companies for more prescription drugs for low and middle income Americans.

The Voluntary State Discount Prescription Drug Plan Act of 2009 would make it possible for states that negotiate for discounts under their Medicaid programs to extend those savings to anyone making up to 300% of the federal poverty level.  Under the Van Hollen-Pingree bill, discounts in the range of 40 to 45 percent off retail prices would be available to consumers.  The program is completely voluntary for states, and pharmaceutical companies would only have to negotiate lower prices if they wanted to sell their drugs through a state’s Medicaid program.

“This is a common-sense approach to the problem of expensive prescription drugs,” Pingree said. “If a state can negotiate for a lower price it makes sense to make that price available to the people who are struggling to afford their prescriptions.  It doesn’t cost the federal government anything and states would only have to cover a small administrative expense.”

States currently negotiate for lower prices for the drugs they buy for Medicaid recipients. Under current law, states have had to get a special waiver to extend those prices to individuals not receiving Medicaid.  Under the Bush Administration that waiver was frequently denied.

Pingree has long been an outspoken health care advocate and has a history of taking on drug companies to fight for lower prescription prices.  As Majority Leader in the Maine Senate, she authored legislation to create Maine Rx, which used the purchasing power of the state to lower prescription drug prices.  The pharmaceutical industry fought the legislation all the way to the US Supreme Court, where the law was upheld.

“This is another example of how Maine is a leader in health care reform,” Pingree said.   “I know the drug companies will oppose us on this, but I’m used to it and this is a fight I’m eager to take on to reduce health care costs, especially for prescription drugs.”

Congressman Van Hollen is a member of the House Leadership and said Pingree is a natural partner in this effort.

“Congresswoman Pingree has a track record of fighting to increase access to health care,” Van Hollen said.  “She brings experience and a practical approach to this effort.”

Pingree is also working to change the way Medicare buys prescription drugs.  The Medicare prescription drug benefit that was created during the Bush Administration specifically prohibits the federal government from negotiating for lower prices, and Pingree has co-sponsored a bill to overturn that prohibition.

“I’m a small business owner,” Pingree said.  “And I wouldn’t dream of making a major purchase without negotiating.  The fact that Medicare isn’t allowed to negotiate a better deal for the American taxpayers is crazy and is nothing but a giveaway to the pharmaceutical companies.  It’s time that changes.”
 
The bill that Pingree is cosponsoring relating to Medicare drug pricing is H.R. 684, the Medicare Prescription Drug Savings and Choice Act of 2009. The bill would establish one or more Medicare-operated drug plans that would compete with private prescription drug plans.  In addition, the bill would require the Secretary of Health and Human Services to negotiate the purchase price of covered Part D drugs with pharmaceutical manufacturers, which would give consumers access to cheaper, more affordable medicines.