Welcome to Consumer Reports Advocacy

For 85 years CR has worked for laws and policies that put consumers first. Learn more about CR’s work with policymakers, companies, and consumers to help build a fair and just marketplace at TrustCR.org

Medicare Price Negotiation Should Get Senate, White House Approval

Friday, Jan. 12, 2007

Medicare Price Negotiation Should Get Senate, White House Approval so Seniors Get Chance for Lower Drug Costs

Consumers Union applauds House vote to give Medicare right to get better prices

(Washington, DC.) – Consumers Union is urging the Senate to pass legislation approved by the House today that will allow Medicare to negotiate lower drug prices, and hopes the Administration won’t veto any measure that seeks to give taxpayers, seniors and persons with disabilities a break on spiraling drug costs.
“The House bill begins the process of bringing drug companies to the negotiating table and getting seniors and taxpayers real savings,” said Bill Vaughan, senior policy analyst for Consumers Union, publisher of Consumer Reports.
“If the Veterans Administration can negotiate savings that are half the price of what Medicare’s private drug plans offer, we’re pretty sure Medicare can get a better deal, too,” Vaughan said.
HR 4 would require the Secretary of Health and Human Services to negotiate lower prices for the Part D prescription drug program. The bill removes the prohibition on price negotiation that was heavily lobbied for by the pharmaceutical industry.
“The Senate and White House understand that Medicare faces tremendous financial pressures and that we should seize every opportunity to obtain savings,” Vaughan said. “The last Secretary of HHS negotiated huge savings on Cipro and Flu Mist, and we’re sure that the current Secretary can achieve savings if this measure is enacted.”
A Consumers Union analysis, conducted in August in Broward County, Fla., found that seniors could get a better price in 80 percent of instances by shopping around for their prescriptions retail than they could get by paying the “full-cost” price under their Part D plan.
Click here to download the full report.
The analysis also found that the VA prices were 54 percent lower than “full-cost” prices under Part D plans. The average per drug VA price for the six drugs surveyed was $22.06 per drug; the average “full-cost” price under the Medicare Part D plans in Broward County was $48.38. Full-cost price refers to that paid by beneficiaries who fall into the “doughnut hole” coverage gap.
Consumers Union is also urging Congress to offer a Medicare-administered drug insurance plan – in addition to the private plans – that would offer consistent premiums, drug coverage and prices, and to close the doughnut hole coverage gap.
Bill Vaughan, Susan Herold
(202) 462-6262