Kaine signs on to Medicare medication bill

Last year in Virginia’s U.S. Senate race, candidate Tim Kaine frequently advocated letting Medicare negotiate drug prices as a way to lower the program’s cost.

Now Sen. Kaine is signing on to legislation that would do that.

Kaine’s office announced this week he’ll join the list of cosponsors of the Medicare Prescription Drug Price Negotiation Act, which was introduced back in January by Sen. Amy Klobuchar, D–Minnesota.

The bill would end the prohibition on drug price negotiations for Medicare, a ban put in place several years ago when the Medicare Part D prescription plan was approved.

 “Every corner pharmacy negotiates for prescription drug prices so it makes no sense that the federal government isn’t allowed to do the same,” Kaine said in a news release. “At a time when we continue to look at every line item of the budget for savings, this common-sense measure should be adopted to make Medicare more efficient and low-cost without compromising care for Virginia seniors.”

Individual drug plans can negotiate drug prices, but the Medicare program itself cannot. The idea at the time was that the private insurers would negotiate lower drug prices as part of their effort to compete with other insurance plans.

Advocates of shifting that negotiation power to the government say that because the overall Medicare program is so much larger, it would have greater negotiating power.

A 2005 analysis of the pros and cons of government drug price negotiation, done for the Congressional Research Service, said that those opposed to government price negotiations said it might not save much money while potentially driving down the cost of drugs to the point that it could harm drug manufacturers’ ability to conduct research and development.

The analysis said one positive of government price negotiation could be a more uniform cost for drugs bought by Medicare recipients.

As things stand now, Medicare recipients can choose different private drug plans through the Plan D program.

The plans’ costs and coverage offerings vary, but a look at the cost of one drug—a generic form of the blood-thinner Coumadin—shows that depending on the plan they choose, some seniors might pay double the annual drug cost of a person who chose a different plan.

Kaine and other proponents of removing the ban on Medicare’s negotiating ability point out that Medicaid and the Veterans Administration both negotiate drug prices, and save money, although the VA, at least, covers fewer drugs than Medicare does. The National Committee to Preserve Social Security and Medicare, which supports letting Medicare negotiate drug prices, says the VA pays about 48 percent less for the top 10 drugs than Medicare does, and extrapolates from that that Medicare could save up to $24 billion a year if it could negotiate drug prices.

Klobuchar’s bill has been sent to a Senate committee but received no further action as yet.

###