WASHINGTON, Jan. 28 — House Democrats have introduced a bill to establish a government-controlled prescription drug plan to compete with private plans that provide Medicare prescription drug coverage.
A key element in the bill would permit the HHS secretary to directly negotiate drug prices with pharmaceutical companies. The proposed Medicare-run drug plan is modeled after a similar plan in the VA.
The VA has reaped massive savings by negotiating drug prices for veterans, said Jan Schakowsky (D-Ill.), a co-sponsor of the bill.
She said the VA has negotiated drug prices that were 20% to 30% lower than the price of drugs available through the 50 or so private plans that provide Medicare Part D coverage.
The government-run plan or plans would compete with current Medicare Part D providers by offering Medicare beneficiaries a potentially cheaper option, said Rep. Marion Berry (D-Ark) another co-sponsor of the bill.
And by offering this alternative, the government could realize substantial savings, said Berry, who estimated that the savings could add up to as much as $20 billion a year for the next 10 years if half of the current Medicare Part D beneficiaries switched to a government-run prescription plan.
Although there is no Senate companion measure yet, Sen. Dick Durbin (D-Ill.), who supports the House bill, said the Obama administration favors allowing Medicare to negotiate drug prices.
Durbin said he would consider offering the bill as an amendment to a larger healthcare reform bill that is expected later this year.
Democrats tried and failed to add an identical provision into the original Part D legislation, and tried again in the last congress, but both attempts gained little traction given the opposition of the Bush administration.
Schakowsky said a government-run plan would also be a simpler option than the private plans now available.
Medicare Part D offers too many plans, all of which make frequent changes to formularies so the result is confusion for Medicare beneficiaries.
But Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said most Medicare Part D users were satisfied with the coverage and were not confused by the numerous plans.
Rather than a government plan, “seniors want a choice of programs,” said Zirkelbach.