Medicare Compliance & Reimbursement

Democrats want cheaper drugs, Republicans want cheaper Medicare.

Two Senators who voted for the Medicare bill, one Republican and one Democrat, have joined those who are pushing to remove the legislation's "noninterference" clause. That provision prohibits the government from using its purchasing clout to obtain lower drug prices from pharmaceutical companies.

In their Medicare Enhancements for Needed Drugs Act, unveiled Feb. 5, Sens. Olympia Snowe (R-ME) and Ron Wyden (D-OR) also propose to withhold tax deductions for advertising expenses from drugmakers that restrict deliveries to foreign wholesalers and pharmacists to prevent them from reselling the medications to Americans. Additionally, the MEND Act would provide higher payments to private plans that negotiate lower drug prices for seniors.

Snowe and Wyden also want the General Accounting Office to begin monitoring drug prices. This part of their proposal is aimed at fears that pharmaceutical companies will raise prices before the Medicare drug benefit starts in 2006 to give them a higher base from which to negotiate discounts.

At a Feb. 6 reporters' breakfast, Senate Majority Leader Bill Frist (R-TN) pointed to the Congressional Budget Office's conclusion that removing the noninterference clause would not save money because the private plans the Medicare bill relies on will be able to negotiate better discounts than the government could get. Frist also reminded reporters that noninterference language has appeared in Democratic Medicare bills, such as legislation introduced by Senate Minority Leader Tom Daschle (D-SD) in 2000.