Medicare Prescripton Drug Price Negotiation Act of 2007

MEDICARE PRESCRIPTION DRUG PRICE NEGOTIATION ACT OF 2007

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Mr. ALLEN. Mr. Speaker, this day has been a long time coming for many of us.

Back in 1998, I was hearing from my constituents in Maine about the high price of prescription drugs, and I introduced a bill to tie drug prices for Medicare beneficiaries to the negotiated prices that the VA gets. The Congress didn't act, but in Maine we enacted Maine Rx. We negotiated lower prices, and we got them for so many people in Maine who were really desperate for lower-priced prescription drugs.

The Congress, under Republican leadership in the House and Senate, delayed and delayed. Eventually, it got to be too hot to handle and we passed Medicare part D.

Today, the defenders of Medicare part D are saying, Well, it is doing well because it doesn't cost as much as we thought it would cost. In truth, the real winners are on Wall Street.

Last November, in reviewing pharmaceutical profits, the New York Times said: ``For big drug companies, the new Medicare prescription drug benefit is proving to be a financial windfall, larger than even the most optimistic Wall Street analysts had predicted.' Well, if it is a financial windfall for PhRMA, it is a lousy deal for the American taxpayer. Market forces, some say, will yield the lowest prices, but the VA gets lower prices, Medicaid gets lower prices, other countries get lower prices than the Medicare D plans.

It is very clear that negotiation will drive down prices, particularly if the Secretary negotiates especially strongly on those highest priced drugs, those drugs that are most out of line.

Secondly, the advocates are arguing that PhRMA and its allies are saying that negotiated prices will reduce revenue so much they will have to cut R&D. We have heard that for over 20 years; it has never happened.

This bill, finally, will be a good deal for taxpayers and a good deal for our seniors.

``For big drug companies, the new Medicare prescription drug benefit is proving to be a financial windfall larger than even the most optimistic Wall Street analysts had predicted. . . . Wall Street analysts say they have little doubt that the benefit program. . . has helped several big drug makers report record profits.'(NYT, 11/6/06)

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