With efforts to avoid across-the-board cuts scheduled for March 1st at a standstill, Rep. Peter Welch is pushing a bill that could save nearly $160 billion while lowering prescription drug prices for seniors and strengthening the Medicare program.
Welch outlined his Medicare Prescription Drug Price Negotiation Act to seniors Friday at Bennington Project Independence. The bill would require the Secretary of Health and Human Services to negotiate prescription drug prices on behalf of Medicare Part D beneficiaries, a move that would significantly lower the cost of prescription drugs for seniors and save up to $156 billion over ten years.
"At a time when we're working to get the nation's fiscal house in order, putting the federal government's purchasing power to work to save money is simply common sense. Paying retail rates for wholesale purchases is a good deal for the pharmaceutical company but a bad deal for the taxpayer," Welch said. "It's long past time we put an end to this misguided policy."
Taxpayers fund more than three-quarters of the cost of the Medicare Part D drug benefit, accounting for $62 billion worth of drugs in 2010 alone. Yet the program, which serves 28 million seniors, has been barred from negotiating rates with the pharmaceutical industry since 2004.
Price negotiation has a history of saving money. The Department of Veterans Affairs (VA) has reduced costs significantly by negotiating rates. One Families USA report found that the top five Medicare Part D insurers charged prices 58 percent higher than the VA for 20 commonly prescribed drugs.
During the debate over health care reform in 2010, Welch successfully included a provision identical to the Medicare Prescription Drug Price Negotiation Act in the House version of health care reform. However, the provision was not included in the final law.