WASHINGTON - Designed to lower the prices seniors pay for drugs, the Medicare Enhancement for Needed Drugs Act of 2005 (the MEND Act) was introduced this week at the Capitol.
Authored under a bipartisan banner by Sen. Olympia Snowe (R-Maine) and Sen. Ron Wyden (D-Ore.), the resolution follows a similar bill introduced last year. That version was not taken up by the Health, Education, Labor and Pensions Committee, which has jurisdiction over health issues.
The revised legislation provides for strengthening drug coverage offered to seniors under the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
"The cost of prescription drugs places an increasingly heavy burden on the citizens of this country," Snowe said. "If prices are allowed to increase unchecked, the very drug benefit the Congress passed to provide seniors with relief could become threatened."
She noted that prescription drug prices have climbed at a rate two to three times that of inflation. Wyden, standing at her side, added that pharmaceutical prices have spiked even higher in the past few weeks.
"The MEND Act will give seniors across the country, in rural and urban areas, in both private plans and Medicare-operated fallback plans, the clout they need in the marketplace to get a fair deal on the medicines they need," Wyden said. "For the sake of Oregon seniors and millions more nationwide, it's clearly time to inject bargaining power and other common sense solutions into the Medicare drug benefit."
Notable among its provisions is language to allow the secretary of Health and Human Services to negotiate prices with manufacturers of Part D drugs, those covered under the drug benefit tied to the Medicare Modernization Act. It grants HHS the authority to bargain for better prices, as private insurers and businesses currently do for lower-cost bulk purchases. Other government agencies, the Department of Defense and the Department of Veterans Affairs, also negotiate drug prices.
If passed, it would repeal a non-interference provision written into the Medicare Modernization Act, which does not allow for contract negotiating. Wyden likened Medicare's current buying practices to that of purchasing toilet paper one roll at a time, which he called "bizarre." Snowe said the bill "creates tools for sound fiscal management."
The MEND Act also would require the head of HHS, the newly appointed Mike Leavitt, to negotiate for fall-back plans - Medicare-operated plans designed to give more choice to seniors who live in areas with limited private options - and also in any case in which a private insurance plan asks for help in negotiating lower drug prices.
In addition to its purchasing provision for the HHS secretary, the act would require the Centers for Medicare and Medicaid Services to determine the negotiated savings received from each plan by the average Medicare beneficiary. Snowe said that condition would allow seniors to compare prices and aid in determining the plan that provides the best savings.
The bill also would compel the Government Accountability Office to track changes in drug prices from 2000 to 2003, and then continuously review the retail cost of prescription drugs used most by seniors through next year. Lastly, the legislation directs the secretary of HHS to work with the National Association of Insurance Commissioners to conduct a review of changes in Medigap policies in the new drug benefit to evaluate its impact on Medicare beneficiaries.
"We take a common sense approach by tracking drug prices and granting the secretary of Health and Human Services the authority to negotiate for lower-cost medications," Snowe said. "We cannot wait until 2006 when the Medicare prescription drug benefit comes into affect. We must address it now."
The MEND Act also is co-sponsored by Sen. Russell Feingold (D-Wis.), Sen. Dianne Feinstein (D-Calif.) and Sen. John McCain (R-Ariz.). It is expected to be referred to the Senate Committee on Finance, of which Snowe and Wyden are members.