The Need to Negotiate Now

The Need to Negotiate Now

In recent weeks, there has been a lot of attention paid to the cost of recovery following Hurricane Katrina. Some have called for major budget cuts to cover the cost, cuts in everything from farm programs to homeland security. But there is one obvious solution to cutting government spending that is being overlooked — one that would save money for the government and taxpayers alike without cutting the programs needed to help hurricane victims or hurting the economy — negotiating for lower cost prescription drugs.

The experience of the Department of Veterans Affairs has proven that negotiating for lower cost prescriptions can reduce health care expenditures and save taxpayers money at the same time. And the experience of every other industrialized nation on Earth has shown that when you negotiate, you lower prices for all consumers.

Right now, Speaker of the House Dennis Hastert is working to pass a bill that would force mandatory cuts of $50 billion, cuts that could potentially slash Medicaid, law enforcement, student loans and other vital needs. I helped write balanced budgets for twenty-two years in the Maine legislature, and I know that budget cuts are difficult decisions to make. These cuts would be very painful for working families in Maine and in the Gulf Coast. But in this case, negotiating for prescription drug prices is a solution that is a win-win: it would help save these important programs, while helping seniors save money and balancing out the cost of hurricane recovery.

When the Medicare drug plan was being assembled, the pharmaceutical lobby convinced its authors to write a rule into the law that forbids ever negotiating for lower cost prescriptions in Medicare. That was a blatant, multibillion dollar giveaway to big drug companies who charge American consumers far more than anyone else in the world. But it is not too late to reverse course. Negotiation works for the Veterans Administration, and it would work in the Medicare program too.

I recently joined a bipartisan group of eighty seven of my collogues in sending a letter to Speaker Hastert and acting Majority Leader Roy Blunt asking them to allow negotiation in the Medicare program. I am also a co-sponsor of the Medicare Prescription Drug Savings and Choice Act. This important legislation would put the sentiment expressed in our letter into action, and give the Secretary of Health and Human Services the ability to negotiate for lower cost medicines in Medicare.

A similar approach that would work is the "America Rx" legislation that I re-introduced earlier this year. America Rx follows the model established by our state's creative MaineRx law, and brings it to the national level. It would allow the federal government to negotiate affordable prescriptions for all Americans without coverage, not just those in Medicare. It uses the same principles of free market power and volume discounts to lower costs that private insurers have already successfully used for years. America Rx would deliver low prices to all Americans who lack insurance. It would not cost taxpayers a dime—it is based solely on working with drug companies to achieve the fairer prices that they already charge to their customers in other countries.

It is important to balance the budget, and I agree that the cost of the recovery efforts in the gulf coast should be offset. However, Katrina and Rita are not the only reason our Nation finds itself in a fiscal straitjacket. The problem lies in years of wasteful spending, misguided priorities, and giveaways to big corporations, like the $8 billion in tax breaks for oil companies in the recent energy bill and the rule against negotiating in the flawed Medicare prescription drug plan (in fact, Medicare law values big business over America's seniors so much that it gives $46 billion in budget-busting subsidies to HMOs yet fails to allow negotiation for lower prices for seniors).

It is time for the federal government to get its fiscal ship in order, and it is also time for our seniors to be able to afford their life saving prescriptions. Thankfully we can do both of these things by simply granting the Secretary of Health and Human Services the ability to negotiate lower cost prescription drugs for Medicare. This is a solution that should be a top priority: it saves seniors money by making their medicines more affordable and it saves the federal government billions in spending.

If Congressional leaders are opposed to this kind of win-win solution, you have to wonder where their priorities truly lie.

http://michaud.house.gov/article.asp?id=213