Medicare price battle looms

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By MARK ANDERSEN / Lincoln Journal Star

Dueling advertising wars have been unleashed, seniors are flooding the phones to Sen. Ben Nelson’s office and the stage is set for a possible showdown over the federal government’s ability to bargain directly with manufacturers over Medicare prescription drug prices.

“Americans pay more than people anywhere else in the world for prescription drugs,” said AARP state Director Connie Benjamin, kicking off efforts Tuesday to influence Nelson, D-Neb., who has opposed direct bargaining in the past.

At a news conference attended by a dozen AARP members, Benjamin thanked Sen. Chuck Hagel, R-Neb., for his past support.

The typical senior takes four prescriptions daily, Benjamin said. AARP argues that by leveraging its 43 million Medicare beneficiaries, the government could get better prices than those negotiated piecemeal by Medicare Part D’s insurance company intermediaries.

Kirsten Sloan, AARP national coordinator for health in Washington, said the Senate finance committee is expected to take up legislation removing the ban on direct negotiation next week, and it could reach the full Senate on April 16.

That schedule was disputed by Nelson spokesman David DiMartino, who said a proposal was “not even on the horizon.”

The House version of the bill, H.R. 4, the “Medicare Prescription Drug Price Negotiation Act of 2007,” was approved 255-170 in January. It called for ending the ban and requires the secretary of health to report on the best ways to negotiate better prices. All three Nebraska congressmen opposed the change.

Sloan said the Senate version would differ from the House bill.

DiMartino said that was part of the problem. He said AARP is attempting to force Nelson into a box by requesting support for a proposal that hasn’t been finalized. Nelson opposed direct negotiations in the past but will consider the proposal when it’s issued, DiMartino said.

Nelson opposed the change because “the prescription drug plan is in its infancy and it seems to be working,” DiMartino said. “It gets great reviews from seniors in Nebraska.” He said AARP was trying to fix a problem that doesn’t exist.

Benjamin said AARP originally supported passage of Medicare Part D, knowing that it contained flaws and that this was the fix.

“We’re calling on Senator Nelson to stand with a strong majority of Nebraskans,” she said, unveiling a poll showing 89 percent of the state’s adults support (and 68 percent strongly support) allowing Medicare to bargain for better drug prices. The poll of 500 adults was  done by Woelfel Research Associates between Jan. 26 and Feb. 8.

Telephone campaigns have been organized among Nebraska’s 265,000 AARP members, Benjamin said. Newspaper and radio ads also  will direct political pressure.

Opposing AARP is PhRMA, the Pharmaceutical Research and Manufacturers of America, which disputes the ability of direct federal bargaining to lower Medicare drug prices. Federal bargaining, AARP’s so-called solution to high drug prices, could harm the Medicare beneficiaries AARP is trying to protect, said PhRMA’s Ken Johnson.

“Such a policy change would kill the efficient system of competitive negotiation for drug prices now in place in which pharmacy benefit managers and private plans negotiate on behalf of as many as 200 million people (not just the 43 million now in Medicare), and it could result in Medicare limiting the number of drugs it covers and restricting patient access to potentially life-saving medicines,” he said in a news release.

Johnson added that current Medicare Part D methods had kept the nation’s spending on medications low. “The federal government’s Bureau of Labor Statistics show that prescription drug prices increased only 1.5 percent from January to December of 2006, well below the 3.3 percent increase for all medical care last year.”

AARP’s Sloan countered Johnson’s argument, saying even Part D’s private insurers admit direct federal bargaining could help some.

Part D protects six classes of drugs: immunosuppressants, anticancer, antipsychotics, antiretrovirals,  anticonvulsants and antidepressants. It prohibits companies from restricting these drugs or making substitutions, because physicians need the full spectrum of possibilities to treat patients.

By losing the ability to restrict or limit those drugs, Sloan said, insurers also lost their bargaining chip.

In conclusion, she said, “If there isn’t a potential for savings (from direct federal bargaining), why would the industry be so vehemently opposed to it?”

Reach Mark Andersen at 473-7238 or mandersen@journalstar.com.