Capital Hill Watch
Medicare Prescription Drug Price Negotiation Act of 2007 (H.R. 4)
The U.S. House of Representatives is expected to vote on Friday, January 12, 2007, on the Medicare Prescription Drug Price Negotiation Act of 2007 (H.R. 4) [To view the Full Text of the legislation visit: Full Text of Legislation ].
For seniors participating in Medicare, the measure would give the government the authority to negotiate with pharmaceutical companies over the cost of prescription drugs A “non–interference” provision that was contained in the Medicare Modernization Act of 2003 to prohibit the government from involving itself in drug price controls would be removed from the bill.
The United States' massive entitlement spending problem was exacerbated further by the creation of the new Medicare Part D prescription drug benefit. However, Congress by selecting a mechanism that best balances the competing considerations of drug costs and drug access and allowing the prescription drug benefit to be delivered by private plans, a market –based solution, resulted in an average monthly premium for the first year of the program to be nearly 40 percent less than originally projected.
Unlikely to incur additional savings is allowing government “negotiation” demonstrating research from the government's Centers for Medicare and Medicaid Services. Furthermore, in negotiations with the government, pharmaceutical companies may keep prices high to give room for bargaining. If the manufacturer refuses a government-set price, the only real tool the government has that private plans do not is the ability to deny all seniors access to specific drugs. In effect, denying patients access to drugs makes this a price control scheme. Therefore, depending on Congress' willingness to deny seniors access to some or many prescription drugs would determine the effectiveness of this approach. Indisputably counterproductive are price controls which are the fixing of prices below the equilibrium price obtained in the market. Government price control strategies result in cost shifting that would result in the future of fewer innovative drugs developed, higher drug prices for consumers, and fewer drugs available to seniors in the non–controlled private markets. Also, the substitution of less effective drugs could result in higher overall program costs and for seniors who would have to obtain denied drugs themselves impose new costs. Simply, seniors' access to crucial drugs may be risked by eliminating private negotiations with pharmaceutical firms.
What Can You Do?
Urge your representative to NOT SUPPORT Medicare Prescription Drug Price Negotiation Act of 2007 (H.R. 4)
Capitol Hill Switchboard Numbers: 202-225-3121 or 202-224-3121 (Those numbers will direct you to the Capitol Hill operator. Ask for your representative's office.)
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The Honorable (full name)
United States House of Representatives
Washington, DC 20515
Dear Representative (last name):
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