Letter Opposing Removal of the Non-Interference Provision of the Medicare Modernization Act

Monday, April 16, 2007 - 8:00pm

April 17, 2007


The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, urges you to oppose S.3, the "Medicare Fair Prescription Drug Price Act of 2007," which removes the non-interference provision of the Medicare Modernization Act (MMA). Removing this critical language could dismantle a vastly popular market-driven program that maximizes access to the best medicines through competition among private plans.

The MMA created the Medicare Prescription Drug Benefit, also known as "Part D," which took effect in 2006. Under the program, Medicare beneficiaries choose among competing private plans, selecting one that meets their needs, rather than being limited to a one-size-fits-all government plan. Nearly 24 million people who previously had no prescription drug coverage now have a range of options available. This includes 17.2 million beneficiaries enrolled in private prescription drug plans and another 6.7 million beneficiaries enrolled in Medicare Advantage prescription drug plans. More than 9 million seniors have their entire drug costs covered, with fewer restrictions than under Medicaid or the state programs on which they relied previously.

The non-interference provision prohibits the government from negotiating directly with manufacturers, pharmacies and prescription drug plan sponsors. Repeal of this provision would allow the Secretary of Health and Human Services to negotiate, giving him potential de facto control to set prices for prescription drugs. Such an outcome could inevitably increase the burden on employers and the private sector already buckling under the current health care costs.

Private plan providers understand how to negotiate with manufacturers and pharmacies to achieve savings and do so for most Americans, including millions of employees covered by the Federal Employee Health Benefit Program. In the first year of its implementation, the Part D program has seen prescription drug plans' competitive bids about 15% lower, on average, in 2007 than 2006— a significant savings to beneficiaries. Part D ensures that seniors and the disabled have choices and access to options when selecting the plan that best meet their medical needs.

Ensuring robust competition in the overwhelmingly popular Medicare Part D program is among the Chamber's highest priorities for meeting the health care needs of retirees, employees and businesses across the country. For that reason, the Chamber opposes S. 3 and any amendments that may weaken the Part D program. Accordingly, the Chamber may consider votes on, or in relation to, S. 3—including votes on cloture or amendments—in our annual How They Voted scorecard.


R. Bruce Josten