November 16, 2006
Regula open to drug negotiation, wants seniors to have choice
By Paul M. Krawzak
Copley News Service
WASHINGTON Rep. Ralph Regula, a top lawmaker on health care
issues, won't rule out supporting Democratic efforts to allow the
federal government to negotiate drug prices as part of the
Medicare prescription benefit.
But he said Wednesday he wants to make sure that any changes in
the benefit would preserve seniors' ability to choose from a wide
array of drugs.
"We ought to ensure that people have a variety of choices," the
Bethlehem Township Republican said. "There's one concern that they
have and that is that they ... will have choices as to which drug
they want that will best serve them."
"Every human is different, and people have different reactions to
drugs," he said.
After their successful capture of the House and Senate last week,
Democrats, including presumed House Speaker Nancy Pelosi, D-Calif.,
have said they intend to pass legislation in the first 100 days of
the next Congress to allow the government to negotiate Medicare
Rep.-elect Zack Space, the Dover Democrat who won the race to
succeed convicted Rep. Bob Ney in the 18th District, favors giving
the government the power to negotiate prices in the Medicare
The 2003 Medicare law, which added prescription drugs to the list
of government-subsidized health care, prohibits the government
from negotiating with drug makers.
Instead, the program relies on competition between dozens of
providers of drug plans to hold down costs. The plans negotiate
drug prices with pharmaceutical companies and then offer their
menu of drugs, with varying premiums and co-payments, to consumers
in the Medicare program.
Democrats such as Rep. Sherrod Brown of Avon, who won the Ohio
Senate race, have argued that allowing the government to negotiate
drug prices for Medicare could save substantial sums of money that
would be available to provide a more generous benefit.
The federal government engages in direct negotiation of drug
prices with pharmaceutical companies in a much smaller, more
limited drug benefit administered by the Veterans Administration.
Regula has played a key role in funding health care initiatives
from his position as chairman of an appropriations subcommittee.
But he would have little input in any changes to the Medicare
plan, which is under the jurisdiction of the House Ways and Means
The 18-term lawmaker believes government negotiation of drug
prices in Medicare is "doable, maybe." But he noted that Democrats
have yet to explain exactly how it would work.
Several health care experts in Washington think tanks said they
are unsure how the plan would proceed. They also are skeptical
that government negotiation would lead to significant savings.
Len Nichols, director of health policy programs at the New America
Foundation, said pharmacy benefit managers who negotiate with
pharmaceutical companies on behalf of private Medicare plans
generally have more leverage than the government would.
He said this is because they are buying drugs for non-Medicare
insurance plans as well as the Medicare benefit.
"If you completely replace the existing private plans' negotiation
of prices with manufacturers (with) one single Medicare buyer,
then you lose the market share advantages which the PBMs bring
based upon their non-Medicare enrollees," he said.
Robert D. Reischauer, president of the Urban Institute, said the
Veterans Administration drug benefit is different from Medicare in
that it offers a more limited range of drugs, available only from
veterans facilities or by mail order, to a smaller population.
"Everybody has to keep in mind that the people who are negotiating
the prices now on behalf of elderly and disabled (in the Medicare
program) by and large are huge pharmacy benefit managers who have
a lot of commercial business as well as their Medicare business,"
"They have every reason to negotiate quite hard with the drug
companies to get good prices."