Taxpayers being ripped off by drug industry profits, according to Pelosi

An article written for The Hill’s Healthcare blog, by Mike Lillis, discusses the new Medicare strategy being called out by former House Majority Leader Nancy Pelosi. According to the article, Pelosi now has an idea to start saving taxpayers money.

The now, House Minority Leader Nancy Pelosi said last week that the profits being earned by the pharmaceutical industry under Medicare’s prescription drug benefit are “a rip-off of the taxpayer.”

Reportedly, the California Democrat renewed the call to empower Medicare to negotiate drug prices on behalf of seniors, which is forbidden under current law. But with Republicans controlling the House, that proposal has a slight chance of moving far this Congress.

“There’s savings to be had by negotiating those drug prices and addressing how Medicare reimbursement takes place for drug benefits,” Pelosi told reporters at the Capitol. “This is a rip-off of the taxpayer, to have the pharmaceutical companies make as much money as they do.”

Enacted by a GOP-controlled Congress in 2003, the Medicare prescription drug program – also known as Part D – expanded the popular seniors’ healthcare program to cover pharmaceuticals. Bowing to the drug lobby, the Republican sponsors explicitly barred the Medicare agency from leveraging its bulk-purchasing power to haggle with companies over prices for beneficiaries’ drugs.

Other federal programs, including the Department of Veterans Affairs (VA), are able to negotiate directly for lower prices, leading to billions of dollars in savings to taxpayers. And it just doesn’t seem fair to Pelosi that the Medicare agency doesn’t have the same bargaining rights.

The article states, “For instance, Medicare Part D plans spend 99.7 percent more than the VA for the generic form of the hypertension drug Norvasc, according to a 2009 report from the National Committee to Preserve Social Security and Medicare (NCPSSM), an advocacy group. For Lasix, the most frequently prescribed Part D drug, Medicare pays 64 percent more than the VA, the group reported.”

Allowing Medicare to negotiate drug prices would save taxpayers up to $24 billion each year, NCPSSM found.

In late 2009, the House Democrats passed Medicare negotiation language as part of their version of healthcare reform. The provision didn’t survive in the final bill.

Many people are sounding off on this renewed call to act by Pelosi, considering as long as she was in power, nothing was done about this situation either. It has obviously sparked a debate once again between Democrats and Republicans

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