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CU Supports Bill That Would Lower Prescription Drug Prices by Medicare Beneficiaries

July 12, 2004
The Honorable Marion Berry
The Honorable Janice Schakowsky
The Honorable Thomas Allen
United States House of Representatives
Washington DC 20515
Dear Representatives Berry, Schakowsky, and Allen:
Consumers Union strongly supports H.R. 3767, the “Medicare Prescription Drug Savings and Choice Act of 2004,” and appreciates your leadership in sponsoring this important bill that would fix some of the most egregious flaws in the Medicare legislation enacted into law last year.
Significantly, H.R. 3767 would:

  • Allow the federal government to negotiate substantial drug price discounts on behalf of Medicare beneficiaries;
  • Provide a reliable, nationally uniform government option through the trusted Medicare program (rather than private companies only);
  • Provide beneficiaries with more comprehensive coverage, funded by savings that will result from the negotiated drug price discounts.
We believe that this approach will be warmly welcomed by the nation’s seniors and disabled. Early experience with market-based discount drug cards (the precursor of private drug plans to be available in 2006) has been extremely disappointing: beneficiaries have been reluctant to enroll because of inaccurate and confusing information and fear of being victimized by fraudulent providers. The savings for consumers have been modest at best, especially when compared with discounts the government negotiates for the Veterans Affairs system and prices of drugs that many consumers import from Canada. These drug card discounts are rendered even more inadequate since drug prices are increasing at a pace many times faster than general inflation.
We are confident that H.R. 3767 would provide deep price discounts because the federal government has successfully negotiated drug discounts in the past – for Cipro during the anthrax crisis and the extremely effective ongoing VA pharmacy program, where negotiated prices (and its evidence-based formulary) provide prices for quality prescription drug coverage far below those available through Medicare discount drug cards.
We deeply appreciate your leadership on this legislation and look forward to working with you to assure that H.R. 3767 is enacted into law. We believe this measure will provide all Medicare beneficiaries with an effective prescription drug coverage option that will ensure a reliable, comprehensive benefit and the deep price discounts needed to make prescription drugs truly affordable.
Gail E. Shearer
Director, Health Policy Analysis
Washington Office