Friday, November 24, 2006

The New Congress and Prescription Drugs

The New York Times reports today that prescription drug manufacturers are circling the wagons in response to this month's Congressional elections. The Wall Street Journal offers a freely accessible story on the obstacles that incoming House Speaker Nancy Pelosi faces to achieve her announced goal of restructuring Part D so that the goverment rather than the Part D plans negotiate drug prices. The article explains that the principal obstacles are the closely divided Senate and the President's veto pen. For that reason the Democrats are evaluating several alternative:

Alternatively, Democrats could create a government-run plan that negotiates
with drug makers, and competes with private insurers' drug plans, an approach
favored by Sen. Richard Durbin of Illinois and Rep. Pete Stark, a California
Democrat who will head the Ways and Means health subcommittee.

Another approach Democrats could try would be requiring drug makers to give Medicare beneficiaries their lowest price, as companies must for Medicaid, the
state-federal health-insurance program for the poor and disabled. Or, Democrats
could push Medicare to copy the Department of Veterans Affairs, which maintains
a formulary, or list of approved drugs that are part of its veterans health
program; lower prices, among other factors, can help drug makers get on the VA's

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