INDUSTRY SKEPTICAL OF PELOSI'S MEDICARE COMPROMISE
Presumptive Speaker of the House Rep. Nancy Pelosi's (D-Calif.) plan to address concerns about her proposal to give the government authority to negotiate Medicare Part D drug prices was met with a mix of criticism and skepticism by industry observers.
The congresswoman may give Medicare beneficiaries the option to decline to participate in government-negotiated drug plans, a top Democratic congressional aide said. The move is meant to address industry concerns that a government-run plan would offer consumers fewer choices.
But industry observers were not convinced. The Medicare drug plan "ain't broke and it doesn't need to be fixed," James Greenwood, the Biotechnology Industry Organization's (BIO) president and CEO, said.
Regardless of whether seniors have a choice, they would still be likely to gravitate toward the cheaper government plan, undercutting private plans, he added. Also, decreased profits would mean less funding for biotechnology, resulting in less innovation. "There has to be some level of realism," Greenwood said, calling the plan a "shortsighted approach."
Greenwood, a former Republican congressman, doubted whether the measure would even become law. While both houses of Congress are likely to approve that legislation, Bush would be "loath to sign such a bill." The prescription drug plan is part of Bush's legacy and he is not likely to allow legislation to pass that would undermine that program," he said.
There is also the question of whether government negotiation would really save seniors money, Jayson Slotnik, BIO's director of Medicare reimbursement and economic policy, said. The government is historically not a good price negotiator, and the Congressional Budget Office recently reported that direct negotiation was unlikely to save any money over private plans, he added.