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Cantwell: Let Government Negotiate Lower Drug Prices for Seniors

Press Release

Location: Washington, DC

Current Medicare prescription drug program rules prohibit federal government from participating in drug price negotiations, require little transparency

U.S. Senator Maria Cantwell (D-WA) voted Thursday night for legislation that would, for the first time, allow the government to negotiate lower drug prices for Medicare beneficiaries. The legislation was approved by the Senate Finance Committee, of which Cantwell is a member. Negotiating powers will help seniors enrolled in the Medicare prescription drug program save money. As the full Senate prepares to take up the legislation next week, Cantwell has vowed to continue fighting for strong transparency requirements to help shed light on savings opportunities, and will continue to push to make sure Medicare gets better prices for seniors.

"If this prescription drug program is going to fulfill its promise of delivering affordable prices to seniors on tight budgets, the federal government must have the power to negotiate drug prices and there has to be greater transparency around the private contractors managing the drug benefit," said Cantwell. "Without negotiating powers, seniors will be paying more than they should for the drugs they need. Without transparency, there's no way to tell whether savings are passed on to seniors or dropped straight into the pockets of middlemen. This bill is a good start. Now we need to get to work on the Senate floor, reinforce this legislation, and save our seniors money on life-saving drugs."

The Medicare Modernization Act, signed into law on December 3, 2003, triggered a new prescription drug plan for Medicare beneficiaries, known as Medicare Part D. The law includes a "non-interference clause" that prohibits the federal government from participating in drug price negotiations, instead leaving pricing decisions solely up to drug manufacturers, pharmacies, and drug plan managers. The legislation passed by the Finance Committee Thursday night would strike this non-interference clause and give the federal government some of the same negotiating abilities currently used by HMOs and large companies to lower drug prices for their beneficiaries.

To improve Part D pricing transparency, the legislation would require reports to Congress on the drug price concessions and the drug rebates that prescription drug plans receive.

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