Medicare Prescription Drug Price Negotiation Act of 2007

Tuesday, January 9, 2007 - 7:00pm


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, strongly urges you to oppose H.R. 4, the Medicare Prescription Drug Price Negotiation Act of 2007. The Act removes the non-interference provision, a vital component of the Medicare Modernization Act (MMA).

The MMA created the Medicare Prescription Drug Benefit, known as "Part D," which took effect in 2006. Under this program, Medicare beneficiaries choose among competing private plans selecting the one that meets their needs rather than being limited to a one-size-fits-all government plan. Over 22.5 million people, who previously had no prescription drug coverage, now have a range of options available to them. Another 9 million seniors have their entire drug costs covered with fewer restrictions than under Medicaid or the state programs on which they previously relied. The very popular Part D program allows pharmacy benefit managers, who provide drug coverage for 190 million Americans, to negotiate drug prices while offering competing versions and multiple plan offerings to seniors. This protects Medicare beneficiaries from government imposed price controls.

The non-interference provision of Part D prohibits the government from negotiating directly with drug manufacturers, pharmacies, and prescription drug plan sponsors. Repeal of this provision would not only allow, but require the Secretary of Health and Human Services to negotiate with manufacturers, giving the Secretary de facto control to set prices for prescription drugs. Such an outcome would inevitably increase the burden on employers and the private sector already buckling under current health care costs.

Private plans fully understand how to negotiate with drug manufacturers and pharmacies to achieve savings for most Americans, including millions of employees covered by the Federal Employee Health Benefit Program. In its first year, the Part D program has seen competitive bids that are 10 percent lower in 2007 than 2006 – a significant savings to beneficiaries. Beneficiaries should be entitled to choose among competing market driven, private prescription drug plans and to select the plan that best meets 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. Accordingly, the Chamber will consider using votes on, or in relation to, H.R. 4 in our annual How They Voted scorecard.

R. Bruce Josten