"The drug companies are going absolutely crazy trying to stop this from happening"

Kaiser Daily Health Policy Report

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Kaiser Daily Health Policy Report
Monday, March 26, 2007

Medicare

AARP Launches Ad Campaign Urging Lawmakers To Allow Medicare Prescription Drug Price Negotiations

AARP is launching a newspaper and radio advertisement campaign in 10 states and Washington, D.C., urging the Senate to approve legislation (S 250) that would allow the federal government to negotiate Medicare prescription drug prices with pharmaceutical companies, USA Today reports. A provision in the 2003 Medicare law specifically bars the government from negotiating prices under the drug benefit. The House in January approved a bill (HR 4) similar to the Senate proposal. AARP has selected certain states for the ads "in an effort to influence senators whose votes could make a difference" -- in most cases undecided Republicans -- USA Today reports. Sen. Ron Wyden (D-Ore.), an author of the bill, said he has the support of about 58 of the 60 senators needed to allow a vote on the proposal. A two-thirds majority ultimately would be needed to override an expected presidential veto if the bill were approved. The ads will "clash on the airwaves" with the Pharmaceutical Research and Manufacturers of America's advertising campaign in opposition to the proposal. AARP Director of Advocacy Management Fred Griesbach said that "the drug companies are going absolutely crazy trying to stop this from happening." PhRMA Senior Vice President Ken Johnson said the Medicare drug benefit can be improved, but not by allowing government price negotiations. The Congressional Budget Office has said that government price negotiations would have little effect on drug prices in the absence of drug formularies, which are not included in either the Senate or House bill (Wolf, USA Today, 3/26).

Enrollment Penalties
In other Medicare news, Reps. Jason Altmire (D-Pa.) and Steve Kagen (D-Wis.) have proposed a bill (HR 1310) that would nullify the late-enrollment penalty for the Medicare drug benefit (Sherman, Pittsburgh Post-Gazette, 3/25). Under the current rules, beneficiaries who were eligible to enroll in the drug benefit last year but did not do so before May 15, 2006, had to pay a penalty of a 1% premium increase for each month of delayed enrollment. Because the next enrollment period began Nov. 15, 2006, affected beneficiaries had to pay a minimum late-enrollment penalty of 7% (Kaiser Daily Health Policy Report, 5/15/06). Going forward, people who are turning 65 must enroll during the period starting three months before their birthday and ending four months after their birthday. Altmire said he has spoken to many individuals who "missed the deadline and are in the penalty phase." Altmire said House Democratic leaders have promised to hold a vote on the bill (Pittsburgh Post-Gazette, 3/25).