House passes bill mandating drug negotations, but guess what...

But the Congressional Budget Office said the bill would have only ”a negligible effect on federal spending.” Under the bill, it said, the government could not encourage Medicare beneficiaries to use particular drugs and therefore ”would lack the leverage to obtain significant discounts in negotiations with drug manufacturers.”

http://www.nytimes.com/2007/01/12/washington/12cnd-drug.html?hp&ex=1168664400&en=01b8d14b7d68ce84&ei=5094&partner=homepage

the legislation does not give the government the ability to drop a particular drug if the company won't come down on the price. We can negotiate all we want, but if the XYZ Pharmaceutical Corp. doesn't want to cut their price, there's nothing we can do about it. If this information is correct, this is a very flawed piece of legislation.

and generics only new drugs have a corner on the market. Most have competitors.

At least that is my understanding, it is the way the bill was written in 2003.

every other bulk purchaser bargains the prices down significantly and of course medicare will too with its 40 million + patients.

Ridiculous.

Why would a beneficiary need to be "encouraged" to take necessary medication? (Something wrong there. . )

Most have Preferred Drug Lists--these drugs obviously cost more than generics, and hold down costs--theirs and yours.

saying that the gov't doesn't have leverage to bring prices down?

http://robertreich.blogspot.com:80/2007/01/bad-medicine.html

"Bad Medicine

House Democrats are pushing a bill to require Medicare to negotiate drug prices. So far, so good. But in what appears to be a bow to the political clout of Big Pharma, the bill does not authorize Medicare to drop from its approved list drugs on which manufacturers fail to offer good deals. This is like Wal-Mart telling its suppliers "we’re going to use our bargaining clout to get from you the lowest prices for our customers – but regardless of what price you offer we’ll still carry your product in our stores." What kind of incentive is that?

The Department of Veterans Affairs gets a 25 percent discount on drug prices for veterans because if a drug company won’t give a big discount, Veterans Affairs won’t include the drug in its plan. Medicare recipients will only get these kinds of savings if Medicare can do the same – walk away from a drug manufacturer that won’t deal.

The current Democratic bill is calculated to make everyone happy. It allows Democrats to tell seniors and the all-important AARP that they’re forcing Medicare to negotiate with drug companies. And it also allows Democrats to turn around and tell Big Pharma not to worry because the negotiations won’t have any real teeth in them. Their drugs will still be approved, regardless of price.

But the bill won’t make anyone happy. It won’t deliver seniors real drug discounts. And Big Pharma will still fight it. Drug manufacturers see any move toward negotiations, even one as innocuous as this, as a slippery slope toward government price controls. And they’re intent on using their considerable clout on Capitol Hill to stop any such bill. Even if the bill makes it to the Senate, new Senate Finance Chair Max Baucus is unenthusiastic about Medicare negotiating drug prices, and has twice opposed similar measures. In the unlikely event the bill makes it to the President’s desk, he’ll almost certainly veto it. And the Democrats don’t have the votes to override the veto."

This is the price we pay for allowing our own party to become just as obliged to big pharma as the other party.

The way to do this without denying seniors drugs of their choosing would be for Medicare to set up its own drug plan to compete with those of private insurers. Medicare would subsidize any plan, so seniors wanting drugs not on the approved list would still have access to them. But seniors wanting the lowest drug prices would join Medicare’s own plan. It would have the cheapest drugs because the plan’s size would give it the most bargaining power and because it would only include drugs that manufacturers offered at a deep discount.