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Bingaman Wants Medication Discounts

WASHINGTON — As Congress seeks ways to slash America’s staggering federal deficit, Sen. Jeff Bingaman has suggested that America’s pharmaceutical companies could be part of the solution.

Bingaman, a New Mexico Democrat, is co-sponsoring a bill with Sen. Jay Rockefeller, D-W.Va., that would require prescription drug manufacturers to offer discounts to low-income patients receiving their medications through Medicare. According to the Congressional Budget Office, the bill could save Medicare $112 billion over the next 10 years — money that Bingaman said could be dedicated to reducing the deficit.

Under current law, drug manufacturers are required to provide the federal government with discounts for medications offered to Medicaid beneficiaries. The same prescription medications offered through Medicare Part D, however, don’t trigger the same discounts. Under the Rockefeller-Bingaman bill, which so far has no Republican co-sponsors, drug companies would be forced to pay the same rebate provided under Medicaid to the Medicare program. Bingaman said this would ensure that the federal government received the best price possible for the drugs.

The White House declined to comment on Bingaman’s bill.


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Before Congress passed the Medicare Part D prescription drug benefit in 2003, all drugs purchased for “dual eligibles” for Medicaid and Medicare received this rebate. The Rockefeller-Bingaman amendment would reinstate this policy and expand it to include Medicare recipients who receive “extra help.”

Congressional negotiators are working to reach a deal in which the nation’s debt limit can be raised in exchange for spending cuts. Republicans are pressing for the spending cuts in exchange for raising the debt limit, but Bingaman said his proposal would free up a large amount of money for general deficit reduction.

“The proposal is to use the savings to apply to the deficit,” Bingaman told the Journal. “I think it’s a very credible proposal.”

Karl Uhlendorf, deputy vice president of the Pharmaceutical Research and Manufacturing Association of America, disagreed. He said a return to the pre-2003 policy would be bad for seniors.

“PhRMA opposes implementing Medicaid’s failed price controls in Part D,” Uhlendorf said. “Such policies would fundamentally alter the competitive nature of the program and undermine its success.

“Today, over 29 million enrollees have joined the program, and more than 90 percent of Medicare beneficiaries have comprehensive drug coverage,” he added.

But Bingaman said drug companies can afford to help reduce taxpayer obligation.

“The pharmaceutical industry doesn’t like the idea of having to limit their profits on these drugs to any group, and this would require that they do so,” Bingaman said. “Frankly, I’ve always supported the federal government being able to negotiate through Medicare for prescription drugs for everybody in Medicare. … That would gain us substantial savings even more than it would as part of this change.”

In 2009, President Barack Obama negotiated a deal with drug companies in which they dedicated $80 billion to lower the price of medicines sold to seniors and the government.