Today the House of Representatives is set to pass a bill (H.R. 4) that would allow the federal government to negotiate Medicare Part D drug prices with pharmaceutical companies. Under the original Medicare law, the federal government was not allowed to bring its considerable bargaining power to the table in order to push down the cost of prescription drugs. Many critics felt that special interest--in the form of drug companies--used their influence to keep drug prices artificially high. The general thinking is that by allowing the federal government to negotiate drug prices it will lower costs, and polls indicate that seniors enrolled in the program support the measure.
But a Congressional Budget Office (CBO) report finds that allowing the HHS secretary to negotiate prices won't have a significant effect on the price of Medicare Part D drugs. "CBO estimates that H.R. 4 would have a negligible effect on federal spending because we anticipate that the Secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by PDPs under current law." Part of the problem is that while the bill allows for negotiation, it doesn't allow the government to establish a formulary. Critics contend that the only way to get drug discounts is is to steer patients toward certain preferred drugs.
Democratic win could be bad news for pharma industry. Report
Critics question Democrats' Part D plans. Report