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Bill Introduced to Begin Rollback of High Medicare Drug Prices
(Photo: Images Money / Flickr)

Bill Introduced to Begin Rollback of High Medicare Drug Prices

(Photo: Images Money / Flickr)

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.)

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.