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Ryan: Government Meddling in Seniors' Medicine Cabinets Would Hurt More than Help

Location: Washington, DC

Ryan: Government Meddling in Seniors' Medicine Cabinets Would Hurt More than Help

The House of Representatives today passed the Medicare Prescription Drug Price Negotiation Act of 2007 (H.R.4), a bill requiring the Secretary of the Department of Health and Human Services to negotiate the price of drugs covered under the Medicare Part D program. First District Congressman Paul Ryan voted against this bill, citing nonpartisan reports and evidence that shows government price negotiation would either have no impact on drug prices and on savings for taxpayers or - worse yet - would reduce seniors' access to prescription drugs and increase costs for veterans.

As it exists today, Medicare Part D provides seniors with coverage for high-quality prescription drugs at discounted prices, the ability to choose a plan that offers the medications they want, and savings of more than $1,100 per year. Among the indications that the program is working to lower costs, while providing seniors the options they need for quality coverage are the following:


The cost of premiums has dropped 40 percent below expected projections;

Prescription drug plans for 2007 are covering roughly 4,300 drugs;

The costs of administering the program in 2006 were roughly $13 billion less than projected;

The costs of administering this program over the next 10 years have been reduced by nearly $200 billion.

At the same time, beneficiary satisfaction is extremely high. According to a Kaiser Family Foundation study, more than 80 percent of seniors are satisfied with Medicare Part D.

"Competition has driven down the cost of these plans even further than we anticipated. And while the cost of plans continues to go down, satisfaction continues to go up," Ryan said. "Seniors should be able to choose their doctors, pick their pharmacies, and have access to the drugs their doctors prescribe. This legislation would compromise that. The legislation proposed today would force seniors into a one-size-fits-all drug plan, taking medical decisions away from physicians and putting them into the hands of bureaucrats."

Furthermore, there is no evidence that allowing the government to negotiate drug prices will result in additional savings to the taxpayer. In fact, the Acting Director of the nonpartisan Congressional Budget Office (CBO) stated in a letter this week that, "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 [prescription drug plans] under current law."

Veterans may also face consequences as a result of government attempts to negotiate Medicare prescription drug prices. The American Legion, a veterans' organization with nearly 3 million members, is opposed to this legislation, noting that: "Every time the Federal government has enacted pharmaceutical price control legislation, the Department of Veterans Affairs (VA) experienced significant increases in its pharmaceutical costs as an unintended consequence." In fact, due to already significant existing government controls within the VA health system, about two-thirds of the most commonly used brand name drugs seniors use are not covered by the VA. As a result, more than one million veterans, roughly 40 percent of all Medicare-eligible VA beneficiaries, have decided to enroll in Medicare Part D.

"The legislation that was pushed through the House today is short-sighted and potentially harmful to seniors," Ryan said. "It is bumper-sticker politics at its worst - pushing through a policy that sounds good in a sound bite, but ignores the problems that come with government interference in this program that's beginning to work to lower costs while providing seniors access to the prescription drugs that best treat their conditions. I hope Congress will consider legislation in the future that corrects this mistake."

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