http://www.nytimes.com/2007/04/18/washington/18cnd-medicare.html?hp NYtimes.com April 18, 2007 Bill to Let Medicare Negotiate Drug Prices Is Blocked By ROBERT PEAR WASHINGTON, April 18 A pillar of the Democratic political program tumbled today when Republicans in the Senate blocked a proposal to allow Medicare to negotiate lower drug prices for millions of older Americans, a practice now forbidden by law. Democrats could not muster the 60 votes needed to take up the legislation in the face of staunch opposition from Republicans, who said that private insurers and their agents, known as pharmacy benefit managers, were already negotiating large discounts for Medicare beneficiaries. Fifty-five senators, including 6 Republicans, supported a Democratic motion to limit debate and proceed to consideration of the bill, while 42 senators voted against it. Such motions require a three-fifths majority under Senate rules. Without a limit on debate, opponents can prevent legislation from ever coming to a vote. The Senate had only a brief debate on the merits of the legislation, which is a high priority for the new Democratic majority in Congress. Republicans framed the issue as a choice between government-run health care and a benefit managed by the private sector. The drug benefit is delivered and administered by private insurers, under contract to Medicare. Senator John Cornyn, Republican of Texas, denounced the bill as a step down the road to a single-payer, government-run health care system. Democrats said they were merely trying to untie the hands of the secretary of health and human services, so he could negotiate on behalf of 43 million Medicare beneficiaries. The Department of Veterans Affairs is able to negotiate for lower-priced drugs, said the Senate majority leader, Harry Reid, Democrat of Nevada. H.M.O.s can negotiate. Wal-Mart can negotiate. Why in the world shouldnt Medicare be able to do that? The 2003 Medicare law prohibits Medicare from negotiating drug prices, setting prices or establishing a uniform list of covered drugs, known as a formulary. Mr. Reid said the Democrats fell short today because of the power of the insurance industry and the pharmaceutical industry and their close ties to Republicans in Congress. But the vote also reflected ineffectual advocacy by Democrats, who were slow in responding to criticism from knowledgeable, well-prepared Republican senators like Charles E. Grassley of Iowa. Private competition works, said Mr. Grassley, a principal author of the 2003 Medicare law. The government has very little experience and a dismal track record figuring out what to pay for drugs. Big companies that offer the Medicare drug benefit, like Caremark and Medco Health Solutions, have more market power than Medicare because they negotiate for tens of millions of people in private health plans, as well as for Medicare recipients, Mr. Grassley said. The House passed a bill requiring the Secretary of Health and Human Services to negotiate drug prices by a vote of 255 to 170 on Jan. 12, just eight days after the new Congress convened. The Senate bill would permit but not require such negotiations. President Bush had threatened to veto either or both versions of the legislation. Neither the House bill nor the Senate bill gives much guidance to Medicare officials on how to negotiate. In creating the drug benefit in 2003, Congress made a radical departure from traditional Medicare, which offers uniform benefits defined by law. Medicare recipients in every state now have a choice of prescription drugs plans with different benefits, premiums, co-payments and deductibles. The 2003 law prohibited the government from interfering in negotiations between drug manufacturers and private companies that provide the Medicare drug benefit. The House and Senate bills would repeal this ban. Employers and health plans typically get discounts on particular drugs in return for encouraging patients to use those medicines, rather than competing products. The Congressional Budget office said that the Senate bill, like the House measure, would have a negligible effect on federal spending. Without the authority to establish a formulary or other tools to reduce drug prices, we believe that the secretary would not obtain significant discounts from drug manufacturers across a broad range of drugs, the budget office said. The Republican senators who joined Democrats in voting to take up the drug price negotiation bill were Norm Coleman of Minnesota, Susan Collins of Maine, Chuck Hagel of Nebraska, Gordon H. Smith of Oregon, Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania. Some Republicans were prepared to filibuster the Senate bill, but that proved unnecessary. The Senate Republican whip, Trent Lott of Mississippi, said Republicans had blocked consideration of the bill because they did not want to dicker with Democrats over amendments on unrelated issues, with no happy end in sight. But Senator Ron Wyden, Democrat of Oregon, predicted that the Senate would vote again on the issue, perhaps on an amendment to a spending bill or other legislation. The fight will go on, Mr. Wyden said. _________________________________________ So what do you all think ? Can someone explain the rationale behind this? I cant think of one other than lobbyist pressure of course.