DURBIN SAYS SENIORS SHORTCHANGED BECAUSE MEDICARE PROHIBITED FROM NEGOTIATING FOR LOWER DRUG PRICES
[CHICAGO, IL] – U.S. Senator Dick Durbin (D-IL) today urged the President to reverse his position and join Democrats in supporting a proposal to give Medicare the right to negotiate on behalf of its beneficiaries. In an event earlier today in Virginia, President Bush said that the current drug plan helps seniors afford prescription drugs. But Durbin said that an AARP study showed that drug prices in 2005 rose at twice the rate of inflation and that savings realized today by seniors enrolled in Medicare Part D could significantly diminish.
“Giving Medicare the right to negotiate on behalf of seniors is old-fashioned free market economics: if one buys in bulk, the price will come down,” Durbin said. “Until the President reverses his position and Congress gives Medicare the authority to bargain on behalf of seniors, the current drug plan will continue to be a financial boon to insurance companies and a bad deal for seniors.”
A study released in February, 2006 by the Institute for America’s Future concluded that the combined savings from having Medicare negotiate prices directly with the pharmaceutical industry and from having Medicare directly offer a prescription drug benefit rather than rely on private insurers would be more than $600 billion over the next seven years.
Durbin introduced the Medicare Prescription Drugs Savings Act to reverse a provision in the Medicare prescription drug bill which prohibits the Secretary of Health and Human Services from negotiating with drug companies for lower prices. The bill instructs the Secretary of HHS to offer a nationwide Medicare-delivered prescription drug benefit and to negotiate group purchasing agreements on behalf of beneficiaries who choose to receive their drugs through the Medicare-administered benefit.
Durbin noted that there are 130 different private plans in Illinois and said that seniors in his state and across the country are being shortchanged because Medicare was prohibited in the 2003 law from using its buying power to negotiate for lower drug prices.
“The Veterans Administration has a process for negotiating drug prices that is proven and effective and leverages the buying power of millions of veterans. Medicare, with 25 times the number of people in its system, must be given the ability to do the same on behalf of its seniors and persons with disabilities,” Durbin said.
Durbin is also the author of the Medicare Drug Honest Pricing Act, legislation to require plans to stick by their original quotes unless the price decreases, so seniors, many of whom are on a fixed income, will not be hit with unexpected additional charges. He is also a co-sponsor of the Medicare Informed Choice Act, a bill to extend the May 15th enrollment deadline, giving seniors and people with disabilities the time they need to navigate the confusing enrollment process and allow them to change plans once during this first chaotic year.
