Bush vows veto for negotiation on drug prices

Democrats said they would use the savings to reduce coverage gaps.
WASHINGTON (AP) -- President Bush promised on Thursday to veto Democratic-drafted legislation requiring the government to negotiate with drug companies for lower prices under Medicare.
The House is to debate and vote Friday on the bill, which is one of a handful of priority items for Democrats who gained control of Congress in last fall's elections.
"Government interference impedes competition, limits access to lifesaving drugs, reduces convenience for beneficiaries and ultimately increases costs to taxpayers, beneficiaries and all American citizens alike," the administration said in a written statement.
Another veto threat
Bush had already threatened to veto another of the top six bills Democrats are pushing across the House floor in the first two weeks of the new Congress. That's the measure, approved Thursday, to expand the extent to which federal funds could be used for embryonic stem cell research.
Several Democrats campaigned last fall as critics of the one-year-old program that offers prescription drug coverage under Medicare, saying it tilted too heavily toward profits for the pharmaceutical and insurance industries.
Currently, private drug plans negotiate how much they'll pay for the medicine their customers take. But the legislation under consideration Friday would require the secretary of the Department of Health and Human Services to do so.
"It is clear Medicare can do better and we are insisting that they do so," said Rep. John Dingell, R-Mich., the bill's author.
Democrats have said they would use the savings produced by the negotiations to reduce a coverage gap that is common in many plans.
Republicans argue that individual insurance companies already negotiate lower prices on behalf of their customers, and that the Democratic approach was tantamount to calling for federal price controls.
They note that the program is coming in under budget and seniors are expressing support for the benefit.
Also, the nonpartisan Congressional Budget Office said the legislation was unlikely to result in lower prices.
Actuaries for the Centers for Medicare and Medicaid Services came to the same conclusion Thursday. Dingell, a leading supporter of the legislation, dismissed the CBO's letter.
"This isn't the first time the Congress and CBO differed on the amount of savings a particular bill would achieve," he said. "Common sense tells you that negotiating with the purchasing power of 43 million Medicare beneficiaries behind you would result in lower drug prices."
The legislation, expected on the House floor on today, also would ban any attempt to limit the array of drugs available to Medicare beneficiaries by creating formularies. That stands in contrast to the Veterans Administration, which has lower prices for its beneficiaries but uses formularies that limit patient choice.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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