When the Medicare Prescription Drug, Improvement and Modernization Act was signed in 2003, it appeared to be a major breakthrough in a decades-long battle to give some relief to Medicare beneficiaries in paying for drugs. But it contained a major flaw for drug cost containment. It prohibited the federal government from negotiating Part D drug prices with drug companies, as federal agencies do in other programs, such as the VA. When the dust had settled around this new legislation, it became obvious why this cost containment prohibition was slipped into the Act. It was designed to provide an economic windfall for pharmaceutical companies. Any question about this was settled when former Congressman Billy Tauzin (R-LA), who guided the bill through the House, left office in January 2005. He immediately took a $2 million a year job as president of the Pharmaceutical Research and Manufacturers of America (PhRMA), the main industry lobbying group.
Now there is a bill pending in the House of Representatives to fix this flaw in Medicare Part D cost containment, H.R. 3, The Lower Drug Costs Now Act of 2019. Its purpose is to establish a fair price negotiation program, protect the Medicare program from excessive price increases, and establish an out-of-pocket maximum for Part D enrollees and other purposes. However, Congressman Jim Hagedorn has said he does not support this bill. He explained at a recent town hall in Austin that he felt the legislation would limit pharmaceutical companies from recovering their research and development costs. This ignores the fact that, based on data from a survey of PhRMA’s own member companies, one out of every three dollars spent on drug research comes from American taxpayers through federal funding for the National Institutes of Health (NIH) and other grants. The pharmaceutical companies are doing just fine.
While Congressman Hagedorn does support other bills which he says would create “price transparency to spur consumer shopping,” he does not favor a bill that would control drug prices before they are put out there on the market. He calls this “socialized medicine,” a term Republicans have used in the past to oppose Medicare.
Dan Feehan, Democratic candidate to represent District 1, supports the passage of H.R. 3 so that prescription drug companies do not charge prices that are many times higher than what they charge for the same drugs in other countries. The negotiation process in this bill also would impact the commercial market, not just Medicare beneficiaries. Dan believes that health care is a basic human right and it should be universally accessible and affordable. He would represent us well.