January 8, 2007

JUST KEEPING THE SEATS WARM:

Congress Won't Whack Drug Makers (Peter Topolewski, 1/05/07, FindProfit)

Congress is taking aim at lowering drug costs under three main initiatives. The first of these is to scrap the 2003 law that bans the government from directly negotiating Medicare drug prices with drug makers. With proponents of this change projecting that it would save $60 billion over the next 10 years, it looks like a straightforward move.

That's being presumptuous, however. Although it appears such a measure will have a good chance of success in the House of Representatives, that's a bit deceiving. Political analysts, meanwhile, already note that passage in the Senate could be a much tougher nut to crack.

A prime obstacle standing in the way of Congress on this front is the surprisingly strong success of the Part D program. Politicians are going to have a tough time finding the will, and political upside, to mess with a program that has worked better than expected for all sides.

As mentioned in a recent overview of the health insurance sector, the bark in this case is likely to be worse than the bite. Democrats can make a case for fiscal responsibility, which doesn't translate into success at the polls. They can also take up the fight for the sustainability of the health care system, but attacking drug costs is only one part of this. Drug companies have to be a partner in a solution, a point they'll be happy to make via their trade groups.

Lastly, health insurers have done a decent job operating Part D to the satisfaction of those who use it. Democrats could argue for lowering medical costs for seniors, but changing the plan drastically could throw the whole thing awry, forcing health insurers to alter plans in ways ultimately unfavorable to seniors who are mostly satisfied at this point.


Mr. Topolewski illustrates two basic ideas to keep in mind over the next two years: (1) this is a do-nothing Congress; (2) Republican sniping at their own Medicare reform was moronic--they should run on it in '08.

Posted by Orrin Judd at January 8, 2007 1:35 PM
Comments

I wonder how much drug prices could drop if manufacturers were made immune from lawsuits over any drug that got FDA approval?

Posted by: PapayaSF at January 8, 2007 3:40 PM
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