White House Undercuts Its Own Rationale For Opposing Medicare Price Negotiations

Last month, the House voted to require the government to negotiate lower prescription drug prices for Medicare beneficiaries, overturning a 2003 law that left drug-price negotiations “to the private insurers that offer government-subsidized drug plans for seniors in each state.”

In a written statement, the White House threatened to veto the bill:

Government interference impedes competition, limits access to life-saving drugs, reduces convenience for beneficiaries, and ultimately increases costs to taxpayers, beneficiaries, and all American citizens alike.

The argument that the White House advanced for refusing to allow the negotiation of Medicare drug prices has been undercut by the White House itself. On page 59 of the Department of Health and Human Services’ “Budget in Brief,” under section “FY 2008 Proposed Legislation” and subsection “Medicaid Pharmacy Reforms,” President Bush’s budget requests the following:


“Allow Optional Managed Formulary: Allows States to use private sector management techniques to leverage greater discounts through negotiations with drug manufacturers.”

Commenting on the administration’s inconsistent approach, Rep. Pete Stark (D-CA), chairman of the House Ways and Means Subcommittee, said, “What’s good enough for states should be good enough for the federal government — and for the millions of seniors and people with disabilities currently being overcharged for necessary drugs. … I applaud the President’s change of heart and look forward to joining him in the Rose Garden for the signing of the Medicare Prescription Drug Price Negotiation Act.”