Policy

Republicans Not So Sure About Trump's Call for Drug “Bidding”

Rep. Charlie Dent , R-Pa., leaves the House Republican Conference meeting in the Capitol on Wednesday morning, Sept. 7, 2016. (Bill Clark/CQ Roll Call)

Congressional Republicans are downplaying or dismissing President-elect Donald Trump’s call Wednesday for the government to start “bidding” for prescription drugs.

Addressing the high price of prescription drugs is a popular bipartisan issue, but Republicans tend to favor an approach that would stimulate competition that could help bring prices down. Under the Medicare drug program, price negotiation does occur between drug companies and the insurers who administer the coverage, but the federal government is forbidden from leveraging the bargaining power of Medicare as a whole.

Changing that dynamic has largely been a non-starter among Republicans, who think the government would have a hard time negotiating better prices than the private insurers in the Medicare Part D drug program.

“Competition has worked, plus that negotiation. Say what you will about insurance companies, they are not gentle, tender negotiators,” said Rep. Charlie Dent, R-Pa. “I think Medicare Part D is working pretty well.”

As the House Appropriations subcommittee chairman who oversees spending at the Department of Veterans Affairs, Dent said that moving beyond the current policy risks turning it into the VA’s system. The VA does contract with drug companies in an effort to get the best prices, but it results in fewer options for drugs that are available, forcing many VA beneficiaries to seek their drug coverage through Part D, anyway.

Plus, the VA doesn’t always get the best price, said Rep. Phil Roe, R-Tenn., the new chairman of the House Veterans Affairs Committee . “A lot of times, drug prices they negotiate are not as good as [when] you can just go down to your local pharmacy and buy them,” he said. Roe said he is “absolutely for breaking the cartel,” but thinks that increasing competition is the way to go.

Experts from the Pew Charitable Trusts, writing in Health Affairs earlier this year, cite research showing that the potential savings for Part D negotiation could range from negligible to $541 billion over 10 years. But for the more extreme savings to be achieved, Part D would need to adopt a formulary of its own, like the VA, or the government would have to negotiate prices to the levels achieved in other countries with price controls.

During Wednesday’s late night votes on amendments to the budget resolution, Senate Republicans even voted against Trump’s pledge. Sen. Ron Wyden, D-Ore., offered an amendment that would have required the budget reconciliation legislation designed to repeal the 2010 health care law to also “bring down the prices of drugs as promised by the President-Elect.”

The amendment even quoted Trump’s own words from the same day, when he said the United States has to “create new bidding procedures for the drug industry, because they’re getting away with murder.” 

Senate Republicans rejected the amendment in a party-line vote, 47-51.

However, some Republicans did support another amendment related to drug pricing, which would have allowed for the importation of cheaper prescription drugs from Canada.  Twelve Republicans, including moderates like Susan Collins of Maine and conservatives like Ted Cruz of Texas voted for the amendment. But there were enough Democrats voting against the amendment for it to fail. Patty Murray of Washington, who has concerns about the Food and Drug Administration’s ability to monitor the safety of drugs imported from Canada, was joined by 12 other Democrats voting no to defeat the amendment 46-52.

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