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Washington, DC -- U. S. Rep. Frank Pallone, Jr. (D-NJ), a senior member of the House Energy & Commerce Committee, made the following statement today at a press conference unveiling a Families USA report on the vast price difference between the negotiated drug prices of the Veteran's Administration and the prices through the private plans in Medicare Part D.
"Lowering prescription drug prices for all Americans has been a long-standing priority for Democrats. One area where we have a chance to accomplish that goal is within the Medicare program by allowing the Secretary of Health and Human Services (HHS) to negotiate directly with drug makers on behalf of beneficiaries. Accordingly, last week, House Democrats introduced H.R. 4, the Medicare Prescription Drug Negotiation Act of 2007, which strips the prohibition on negotiating prices and instead requires the HHS Secretary to conduct such negotiations with drug companies on behalf of Medicare beneficiaries.
"The collective purchasing power of 40 million seniors should be a powerful bargaining tool in lowering drug costs. Unfortunately, under the current system devised by the Republicans the bargaining power of seniors has been highly fractured by separating them into various private plans that can only win a certain level of price concessions.
"There is precedent that shows government negotiations work to lower drug prices. One need only look to the Veteran's Administration (VA) to see that the government can in fact achieve greater price concessions from drug makers than the private sector. That's why I offered an amendment in the Health Subcommittee during the 2003 debate that would require the government to negotiate for lower prices, but Republicans opposed it.
"The new Families USA report shows how both seniors and the American taxpayer are now being ripped off by a prescription drug plan that was crafted to help the pharmaceutical industry, not the seniors counting dollar bills to pay for their medicines.
"I was shocked to learn about some of the price differentials between the VA and some of the Medicare Part D private plans for the drugs most used by American seniors. Of the top 20 drugs, private plans are charging 58 percent more than the VA. That's a disgrace.
"It is a national embarrassment that we have the tools to lower drug prices for America's seniors and disabled and yet we do not utilize them.
"As this report goes on to note, another popular criticism used by the pharmaceutical lobby is that greater price concessions will result in lost revenues that the industry uses to advance its research and development. These are just scare tactics. The truth of the matter is that the Medicare prescription drug program has resulted in a windfall for the big drug companies - with many drug companies showing record profits all the while seniors are paying higher drug prices.
"On Friday, the House will consider HR 4. Clearly, this report shows us that price negotiations between drug makers and the government can and does work. The current program and private insurers may have been able to achieve some savings but we can do more to help make their prescription drugs more affordable." |
