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Budget office sees no savings in drug price negotiation

Published January 11, 2007


WASHINGTON - Requiring the federal government to negotiate Medicare drug prices won't save money, as Democrats contend, the Congressional Budget Office said Wednesday.

"The secretary would be unable to negotiate prices across the broad range of covered Part D drugs that are more favorable than those obtained by (the plans) under current law," Donald B. Marron, the CBO's acting director, told Rep. John Dingell, D-Mich., in a letter.

Dingell is author of a bill the House takes up Friday requiring the secretary of the Health and Human Services Department to negotiate drug prices on behalf of Medicare beneficiaries. The measure is a priority of new House Speaker Nancy Pelosi.

Current law prohibits the government from negotiating drug prices in Medicare Part D. Insurers now have that role. The insurers get a federal subsidy for administering a plan, and beneficiaries also pay for the benefit.

House Democrats say the government can use its leverage to strike a better deal than the insurers get. Dingell was not dissuaded by the letter.




[Last modified January 11, 2007, 01:35:19]

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