Wyden, Snowe propose changes to new Medicare law


Saturday, February 07, 2004 | No comments posted.

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WASHINGTON (AP) - Just months after providing a key vote in a legislative overhaul of Medicare, Oregon Sen. Ron Wyden, D-Ore., is proposing changes to the new system.

The new law provides drug benefits through Medicare starting in 2006, and contains other provisions, including the introduction of private-sector competition into the Medicare system.

Opponents criticized the law for not allowing the government to negotiate for lower prices.

After Wyden voted for the legislation, he came under fire from some consumer advocates and senior citizens.

On Thursday, Wyden announced he is sponsoring a bill with Sen. Olympia Snowe, R-Maine, to reduce drug prices by allowing the Health and Human Services secretary to negotiate with pharmaceutical companies, in hopes of getting cheaper drugs for senior citizens.

The legislation also tries to make it easier for foreign wholesalers to sell drugs to U.S. residents.

Some consumer advocates welcomed the legislation, but said it will be tough this year to make any changes to the Medicare overhaul, a centerpiece of President Bush's re-election strategy. Democratic candidates have blasted the new law, and Bush has defended it.

"This legislation, if enacted, would very helpfully improve the new Medicare law," said Ron Pollack, executive director of Families USA, a health care consumer advocacy group.

"But it is hard to imagine this will become law this year."

The senators are just beginning to shore up support for the bill. But they said they hope the promise of lower prices will find bipartisan support. "Obviously, we're going to do some work on both sides of the aisle," said Snowe, who also voted for the Medicare changes.

The bill would allocate $500 million from 2007 through 2013 toward incentive payments to drug plans that negotiate low drug prices.

Some critics, though, say individuals are best equipped to bargain for low-priced drugs.

"The market can do these things better than a few bureaucrats who make strict laws," said Devon Herrick, senior fellow at the National Center for Policy Analysis, a free-market think-tank.

In a Jan. 23 letter to Senate Majority Leader Bill Frist, Congressional Budget Office Director Douglas Holtz-Eakin said that government negotiation would have a "negligible" effects on federal spending.

Holtz-Eakin wrote that price discounts and the Health and Human Services secretary, "would not be able to negotiate prices that further reduce federal spending to a significant degree."
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