Bill to let Medicare negotiate lower drug prices stalls in Senate

A bill allowing Medicare to negotiate directly with prescription drug makers to get lower prices for senior citizens stalled in the Senate on Wednesday, but the setback is unlikely to be the last word on the issue.

Allowing such negotiations won majority support, but the 55-42 vote was well short of the 60 needed to end debate and act on the legislation.

Opponents, mostly Republicans, had warned that the bill would be the first step on a slippery slope toward government price controls. Supporters, mainly Democrats, said it would help ensure that senior citizens in Medicare’s prescription program had affordable access to costly medications with no generic alternatives.

Although the vote was a welcome legislative victory for President Bush, Democrats walked off with a campaign issue that polls show has overwhelming public support. Earlier this year, the House passed a bill requiring Medicare to engage in such negotiations.

The Senate bill would have authorized -- but not required -- Medicare to bargain with drug makers on behalf of 24 million people in its prescription program. Current law, written by a previous Republican-led Congress and supported by industry, forbids that. The bargaining should be done by private insurance plans that deliver the Medicare drug benefit, Republicans say.

But Sen. Ron Wyden (D-Ore.), said the law as it stood now was “an example of special interest overreaching.”

Few experts believe that the Senate vote will quell demands for government intervention to bring down drug prices. Polls show that drug costs remain a top concern for consumers, and some legislators are maneuvering to pass laws this year that would allow the importation of cheaper foreign medicines.

Medicare’s prescription program has proved popular, and it is costing less than initially estimated.

But experts say its long-term financial outlook is troubled because it has no dedicated funding within the federal budget to sustain it.

“There are cost pressures all over the place on the federal government and on Medicare in particular,” Harvard economist Richard Frank said.

“If the pharmaceutical industry ups its success rate so as to produce more new and unique drugs, this is only going to become a bigger and bigger issue.”

Some Democrats who supported Republicans in the creation of the Medicare drug benefit had tried to find a middle ground by making direct bargaining optional instead of mandatory.

Sponsors envisioned that Medicare would use its authority sparingly, intervening to seek lower prices only on premium drugs produced by a single manufacturer.

In another concession, the House and Senate bills would have forbidden Medicare to create a national list of preferred drugs, such as that used by the Department of Veterans Affairs. That compromise may have ultimately worked against the Democratic legislation, because congressional budget estimators said it would save only a negligible amount of money.

“One of the main arguments against it is that, as designed, it won’t save any money,” said former Medicare administrator Mark McClellan, who opposed the legislation.

“To use Medicare’s negotiating clout, you need a formulary. Without biting the bullet on the government deciding which drugs are going to get covered, you get no additional savings.”

AARP, the senior citizens’ lobby, said it would try to get the Senate to reconsider. “Given the overwhelming support for giving Medicare the power to negotiate, the will of the people will eventually be heard,” David Sloane, a top AARP lobbyist, said in a statement.

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ricardo.alonso-zaldivar@latimes.com