Nov. 6, 2004, 7:08PM
U.S. urged to help lower drug prices
AMA lobbies the government to negotiate with manufacturers
By ROBERT PEAR
New York Times
WASHINGTON - The American Medical Association says the government should negotiate directly with drug manufacturers to secure lower prices on prescription medicines for the nation's elderly.
Under the new Medicare law, signed by President Bush last December, 41 million elderly and disabled people will have access to drug benefits in 2006. Medicare will rely on private health plans to deliver benefits.The law says the government "may not interfere" in negotiations with drug companies.
Authors of the law included that provision out of fear that government involvement could overwhelm the free market, leading to federal regulation of drug prices — "price-fixing" by federal bureaucrats, in the words of Sen. Charles Grassley, R-Iowa.
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Hours after Bush signed the Medicare law last year, Rep. Nancy Pelosi of California and Sen. Tom Daschle of South Dakota, both Democrats, introduced bills to give federal officials the "authority to negotiate prices with manufacturers" of drugs covered by Medicare.
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