Medicare Drug-Price Negotiation Faces Uncertain Future

The House of Representatives approved a bill last month allowing the federal government to negotiate with pharmaceutical companies over the price of drugs offered in the Medicare Part D prescription drug program.

The bill, which was approved by a vote of 255-170, is expected to have a much harder time in the Senate. At press time, APA Director of Government Relations Nicholas Meyers told Psychiatric News, “It does not seem likely that the House bill will pass the Senate without revisions.”

He noted that Senate Finance Committee Chair Max Baucus (D-Mont.) has“ expressed concerns about the legislation as it is now written and has called for some compromises.”

The bill, the Medicare Prescription Drug Price Negotiation Act of 2007 (HR 4), states that the secretary of Health and Human Services (HHS) “shall negotiate with pharmaceutical manufacturers the prices (including discounts, rebates, and other price concessions) that may be charged to prescription drug plan sponsors and Medicare Advantage organizations for covered Part D drugs for Part D–eligible individuals who are enrolled under a prescription drug plan or under [a Medicare Advantage] plan.”

The inability of the government, representing millions of Medicare patients, to negotiate for lower prices has been a source of contention since passage of the Medicare prescription drug program in 2003. Opponents of the legislation claimed then that by prohibiting the government from negotiating over price, it paved the way for a bonanza for the pharmaceutical industry.

APA has not taken a position on the bill, though in the run-up to its passage, it continued to advocate for access to psychiatric medications, whatever the outcome of the House vote. In a January 12 letter to House Speaker Nancy Pelosi (D-Calif.) and other House leaders, APA Medical Director James H. Scully Jr., M.D., urged House members to ensure that the legislation“ does not carry the unintended consequence of limiting beneficiary access to important medications.”

Meyers told Psychiatric News that the drug-pricing discussions are part of a larger debate about access to care.

“Access to the full range of medications psychiatrists use to treat their patients is also critical, which is why we have worked hard with the National Alliance on Mental Illness, Mental Health America, and others to ensure that the Part D implementation did not result in potentially catastrophic interruptions in, or abrupt switching of, psychotropic medications,” he said.

He added that Scully's letter was intended to remind House leaders that the government has thus far protected psychiatric drugs in the Medicare prescription drug program and that enactment of drug-negotiation legislation does not change the need for continued protection.

“We also recognize that the best medications in the world aren't going to work if patients can't afford them, which is why we joined with other medical specialties and patient groups in actively supporting the Partnership for Prescription Assistance,” Meyers said. “The PPA doesn't solve the drug-pricing debate, but it does bring immediate help to patients who have trouble paying for their medicine.”

The Partnership for Prescription Assistance offers a single point of access to more than 475 public and private patient-assistance programs, including more than 150 programs offered by pharmaceutical companies. It is supported by member companies in Pharmaceutical Research and Manufacturers of America (PHRMA) and medical and health care advocacy organizations, including APA.

Predictably, the Bush administration and the pharmaceutical industry did not respond favorably to news of the bill's passage.

HHS Secretary Mike Leavitt noted in a statement that the Congressional Budget Office had determined that the legislation would not result in lower drug prices.

“I am disappointed that a majority of House members discounted the overwhelming success of the Medicare Part D program over the last year and voted to pass HR 4,” Leavitt said. “Despite statements from the nonpartisan Congressional Budget Office and the independent Centers for Medicare and Medicaid Services' actuaries that this legislation would not result in savings, this legislation was hastily adopted without hearings in the House. We hope that the Senate will reflect on the evidence and resist the temptation to undermine a program that is working well for millions of people with Medicare.”

The Pharmaceutical Care Management Association, in a statement released after the House action, said passage of the bill “would take the Medicare drug benefit in the wrong direction and potentially shift additional costs to private and public payers, including Medicaid and the Veterans Administration.”

The text of HR 4 can be accessed at<http://thomas.loc.gov/cgi-bin/Thomas> by searching on the bill number. Information about the Partnership for Prescription Assistance is posted at<www.pparx.org/Intro.php>.▪