Bill introduced to begin rollback of high Medicare drug prices

Just a short news item, since I just saw this (and in fact, it just occurred). Henry Waxman and Jay Rockefeller have introduced companion bills in the House and Senate that begin the process of rolling back Medicare drug prices by removing some restrictions to government negotiation. I don’t have bill numbers yet, but I’ll be following these, so more information will follow.

The bill is called the “Medicare Drug Savings Act of 2013″ and it works like this, according to the press release from Senator Rockefeller’s office (my emphasis):

The bill would save $141.2 billion, helping to responsibly reduce the deficit, and avoid reckless proposals to cut Medicare benefits.

The Medicare Drug Savings Act would eliminate a special deal for brand-name drug manufacturers that allows them to charge Medicare higher prices for prescription drugs for some seniors and people with disabilities. The bill would require drug companies to provide rebates to the federal government on drugs used by dual eligibles – people eligible for both Medicare and Medicaid, who are predominantly low-income seniors and people with disabilities – just as was done for dual eligibles on Medicaid before Medicare Part D was created in 2006.

With the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices, including Medicaid and private insurers. This bill simply restores negotiated prices for low-income Medicare beneficiaries.

This bill would correct excessive payments to drug companies, while also saving taxpayers and the federal government from footing the unnecessary cost. Over the past ten years, the 11 largest drug companies alone took in $711.4 billion in profits, including a 62 percent increase from 2003 to 2012.

In other words, thanks to Medicare Part D, Medicare recipients pay more for drugs than Medicaid recipients, even if a recipient is eligible for both. This bill removes that Medicare Part D gift to drug manufacturers (because of Medicares higher drug prices) and returns Medicare drug prices — for a select set of seniors, those who are eligible for both programs — to the negotiated prices of the Medicaid program.

John Aravosis has written extensively about the exorbitant prices Americans pay for prescription drugs compared to Europeans, whose governments negotiate those prices. Advair, a popular asthma drug, costs five times as much in America as it does in France, even though it’s the exact same drug made by the exact same drug company. Big Pharma simply charges Americans five times more than they charge the French. (And they keep upping the prices in America while not touching the prices in Europe.)

Couple via Shutterstock

Couple via Shutterstock

This is not the full rollback to Medicare drug price negotiation we want, but it’s a good start. Note the savings to the Medicare program — $141.2 billion. Not pocket change in this pretend-era of OMG Deficit.

President Obama, you who deeply care about the debt, take note. Here’s your opportunity, sir, to get on the right side of Occam. Up for it? 

Text of the bill is here (pdf). More information via Politico here.

Who are the sponsors?

The sponsors are to be commended, so I’m going to list them. In the House, these men are sponsoring the bill. All are ranking members (most senior in their respective committees) according to news reports:

Henry A. Waxman (CA-33)
Sander M. Levin (MI-09)
George Miller (CA-11)
Jim McDermott (WA-07)
Robert E. Andrews (NJ-01)

In the Senate, these are the sponsors:

Jay Rockefeller (D-WV)
Bill Nelson (D-FL)
Amy Klobuchar (D-MN)
Tammy Baldwin (D-WI)
Richard Blumenthal (D-CT)
Barbara Boxer (D-CA)
Sherrod Brown (D-OH)
Dick Durbin (D-IL)
Al Franken (D-MN)
Angus King (I-ME)
Patrick Leahy (D-VT)
Jeff Merkley (D-OR)
Jack Reed (D-RI)
Bernie Sanders (I-VT)
Brian Schatz (D-HI)
Jeanne Shaheen (D-NH)
Debbie Stabenow (D-MI)
Tom Udall (D-NM)
Sheldon Whitehouse (D-RI)

Notice that after the first three names, the list is alphabetical. This is from the Rockefeller website, which likely means that the first three are the primary sponsors led by Rockefeller, and the rest are later co-sponsors.

That’s 19 senators, including Obama surrogate Dick Durbin. So far so good. Let’s see how much traction this gets.

GP

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Gaius Publius is a professional writer living on the West Coast of the United States. Click here for more. Follow him on Twitter @Gaius_Publius and Facebook.

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  • http://adgitadiaries.com/ karmanot

    In California, yes.

  • hauksdottir

    If you have an agreement with Shutterstock, you have access to very large numbers of stock photos. Admittedly, they look like stock (multi-purpose) photos, but they don’t cost an arm and a leg EACH.

    News photos are copyrighted. A “Fair Use” claim could be used in court if an image was used and the source objected to it. Note, however, that such a claim is a legal DEFENSE, in Court, which means outrageous legal fees and far too much time. John is a lawyer, but I suspect that he is wise enough not to act as his own attorney… and knows exactly what this sort of defense would cost, even if the Fair Use claim was upheld. A Pyrrhic victory.

    Individual news photos can certainly be purchased. How much do you want to pay per month to subscribe to this blog so that you can have pertinent and precise images?

  • http://poodyheads.wordpress.com/ Papa Bear

    Medicaid rules have always been set by the state — has that changed?

  • http://adgitadiaries.com/ karmanot

    Congress could care less and the Demos are leaders in the neglect: slashes SS, Medicare cuts, chained CPI and more coming.

  • http://adgitadiaries.com/ karmanot

    Why does this annoy you so much?

  • http://adgitadiaries.com/ karmanot

    That’s exactly what happened to me with AARP. The first year it was about $18.00 a month and the second year it went up to about $70.00 so I had to cancel, when I found out Medicaid would cover the difference. Now, because of Obama Care, no one in our state on Medicare is allowed medicaid. So we are left with a decision to not take medications prescribed or eat. This disaster, plus the Sequester and chained CPI will cause severe hardships for many of us and it has Obama all over it.

  • http://adgitadiaries.com/ karmanot

    America has finally become a rotting course for carrion feeding.

  • http://adgitadiaries.com/ karmanot

    I was just told by my pharmacist that as of Feb. anyone on Medicare will no longer be able to qualify for Medical(Medicare). It used to be that Medical would cover the extra costs of medicines that Medicare wouldn’t. In my case that will cause several hundred dollars a month extra that I don’t have. I now understand what ‘death Panels’ means and it has Obama Care all over it.

  • Mighty

    Unless we BEG republicans to pass legislation and even then only legislation they approve of its going nowhere. Minority rule. Isn’t that what democracy is all about?

  • Hue-Man

    I know it’s difficult for American polticians to grasp foreign concepts but here’s one that nearly every other Western nation is using – governments negotiate drug prices with suppliers! “…while the recent announcement by Canadian provinces that they will work together to limit the prices of six top-selling generics drugs to just 18% of brand-name drug prices in Canada would save governments around
    C$100 million, the prices agreed by the provinces are still about 10 times higher than those achieved by single-payer systems in countries such as New Zealand.”

    “They report that almost all of the countries are now routinely negotiating rebates from drug companies as a condition of coverage under their health care systems, and that manufacturers are promoting these
    rebates because the associated confidentiality clause ensures that deals struck in one country do not set a precedent in others.
    “The pricing of medicines is now a game of negotiation, similar to buying a car at a dealership,” comments study co-author Steve Morgan, of the Centre for Health Service and Policy Research at the University of
    British Columbia (UCB). [sic should be UBC]” http://www.pharmatimes.com/Article/13-04-10/Canada_losing_out_on_secret_drug_price_deals.aspx

  • http://www.rebeccamorn.com/mind BeccaM

    Great idea.

    Snowball’s chance, etc. This would reduce BigPharma’s profits, and we can’t have that.

    Besides, as we’ve just learned, Harry Reid ensured once again that only 40 GOP or quisling Dem Senators are needed to block everything.

  • http://www.rebeccamorn.com/mind BeccaM

    The other scam angle is if you have a deductible or out-of-pocket limit, your private purchase of the med you need won’t count against it. So it’ll take you that much longer to reach those numbers.

  • nicho

    There’s another scam that’s going unreported.

    There is a drug I take — not all the time, but only when I need it. And when I need it, I really need it.

    I was informed recently that my Medicare Part D provider was raising the co-pay from $8 to $43.

    The kicker is that the retail price of the drug — without insurance — is only $23. So, basically, the insurance company is forcing me to pay for the whole retail cost of the drug, since there’s no way I’m going to pay them a $20 premium just to use their insurance. They kindly suggested some over-the-counter drugs that they claim work just as well. I can tell you from personal experience they do not work at all.

    Bastards.

  • Naja pallida

    If you haven’t figured out which side they are on by now, you’re just not paying attention. :)

    Astoundingly huge bank bailouts. A huge gift to the insurance industry sold to us as a health care bill. Billions in subsidies for the most profitable corporations in the world. No serious punishment for horrific corporate crimes. No punishment for illegal wars, illegal wiretapping, torture, war profiteering, or destroying the economy. Continued illegal detention of innocent people. Repeated punishment of whistle-blowers, for daring speak the truth. People’s personal retirement savings obliterated, while they also want to cut Social Security benefits. Millions of home foreclosures, many of which were known to be illegal. Impeachment was off the table. Austerity is the only option. While we have no jobs bill. No infrastructure bill. No economic stimulus to speak of. Herbert Hoover would be ashamed of this economic recovery.

    Our Congress is only interested in one thing: Making sure the revolving door of corporate collusion remains open.

  • Ford Prefect

    Since bills are often submitted as symbolic gestures to help with fund raising, even though they have no chance of passage, I’ll believe the Dems are serious about this if I see the entire party apparat, including the White House, launching a full-court press on this one. Remember, the Obama administration flatly opposed this very idea in 2009 as a gift to Big Pharma and made oodles of money in the process. So if this dominates the news cycle for a week or two and generates a passionate response from the public, I’ll gladly eat my words.

    Senators are well-versed in doing things that will upset a big donor, so they’ll get more money from them in exchange for killing the thing. I also doubt this has a chance in the House. There’s also the filibuster Reid & Co. left in place to stop such efforts in the first place. Figure they need 61 co-sponsors to gain the appearance of inevitability.

    The Senate just voted down watered down background checks, which were favored by roughly 90% of the population. So public opinion clearly isn’t a factor here.

  • emjayay

    Why does this blog continually feature meaningless pointless Shutterstock photos? Are they chosen by AmericaBlog or is it some kind of internet ad franchise or what?

  • ronbo

    It’s hard work trying to present an image of concern when your objective is to maintain support of the wealthy. It’s the best government that money can buy.

  • condew

    The fate of this law will help us figure out whose side Obama and the Democrats are on. I suspect the main reason they did not fix the filibuster is so they can offer good ideas like this, and then silently kill them without leaving any fingerprints.

    They are saying that despite “chained CPI” they’re on our side.

    This bill has a snowball’s chance in hell, but it will make good rhetoric in 2014.

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