Allow Medicare to negotiate for cheaper drug prices

Drug promise affected by deal with White House

Updated: Thursday, October 15th, 2009 | By Angie Drobnic Holan

Ever since Congress approved the Medicare drug plan proposed by President George W. Bush, Democrats have groused that it was a huge giveaway for the pharmaceutical industry because it did not allow Medicare to negotiate drug prices. As a candidate, Barack Obama vowed to change the program to allow Medicare negotiate lower prices.  But now, Obama's promise is being slowed by a political deal involving his plan for health care reform.

The prescription drug industry was one of the first big players in the health industry to go along with President Obama's plans for health care reform. Drugmakers agreed to forgo $80 billion over 10 years as part of reform efforts to reduce costs.

As the negotiations in Congress over health care have progressed, though, it appears the White House will not push Obama's campaign promise to allow Medicare to negotiate lower drug prices, nor another measure to allow consumers to buy imported prescription drugs.

Billy Tauzin, a former congressman and now president of Pharmaceutical Research and Manufacturers of America, or PhRMA, has told several reporters that his group has an agreement that the White House will back away from plans to allow Medicare to negotiate with drugmakers for lower drug prices. Reports from the Los Angeles Times, the New York Times, and the Huffington Post have outlined the contours of the deal.

The White House has confirmed the $80 billion threshold for the deal and didn't dispute the idea that it was dropping support for negotiated drug prices.

Some members of Congress have said they do not feel bound by any deal the White House made, so this may not be the end of the story. Still, the Senate Finance Committee recently approved health legislation, and nothing in there allowed Medicare to negotiate lower drug prices. Given that committee action and the news reports on the matter, we rate this promise Stalled.

Sources:

Los Angeles Times, White House deal with drug firms draws flak, Aug. 14, 2009

Los Angeles Times, Obama gives powerful drug lobby a seat at health care table, Aug. 4, 2009

New York Times, White House Affirms Deal on Drug Cost, Aug. 5, 2009

Huffington Post, White House Confirms: Deal With Big Pharma Bars Price Negotiations, Aug. 7, 2009

Newsweek, Let’s Make a Deal: Obama, Big Pharma, and you. (Minus you.), Oct. 13, 2009