Will the Government Negotiate Medicare Prescription Drug Prices?

The result of the midterm elections – a new Democratic majority – could have a wide-ranging effect on the healthcare industry. While some issues, such as the House stem cell debate, are based primarily on ethics, many issues are largely fiscal in nature. Congress reconvened last week, and Speaker of the House Nancy Pelosi said that several of these issues will be voted on within its first 100 hours.

One hot topic concerns Medicare prescription drug prices, which have been determined by private health care plans since the Medicare Modernization Act of 2003. On Friday, the Democratic majority will introduce a bill that would allow the secretary of the Department of Health and Human Services (HSS), Mike Leavitt, to negotiate prices directly with pharmaceutical companies. Private health insurers would still be able to offer lower prices on Medicare prescription drugs than those negotiated by the HSS, but this bill would give the government an option in price setting.

The HSS, however, seems to be balking at the idea of negotiating prices. In a recent press release, they project decreasing Medicare costs. In addition, Secretary Leavitt recently stated that, “consumer choice is working” and “government interference will not lead to lower drug prices.”

In its 2007 advocacy agenda, the American Medical Association also generally mentions improving Medicare, along with several other specific issues. The AMA did not address the negotiation of Medicare drug prices in its advocacy agenda, but it has applauded Congress for other legislation.

While opinions on the Democratic agenda vary, what ultimately happens on Capitol Hill could alter your daily practice. The price and availability of prescription drugs, number of patients you see, or your patient demographic are just a few things that could change due to new legislation. By being aware of current events, you can anticipate these changes and prepare yourself accordingly.