Democrats to negotiate Medicare's Drug Prices

After gaining control over Congress, House Democrats are now faced with the dilemma of negotiating the lowering of drug prices without adversely affecting the existing Medicare drug program.

One of Bush administration legacy, the Medicare drug program has enrolled 22.5 million senior citizens since its creation in 2003. The said program has created controversies recently because of a "doughnut hole", a gap in the Medicare drug prescription benefit.

According to recent polls, nearly 80% of enrolled senior citizens have no coverage in the gap between the amount of $2250 and $3600. This means that a staggering 3 to 4 million senior citizens will pay the full amount of the prescription drug this year.

By lifting the ban on drug price negotiation, the government can now negotiate drug prices and generate enough savings to cover costs caused by the “doughnut hole”. Republicans view this move by the Democrats as purely political.

The drug industry, meanwhile, consider this government intervention will considerably decrease drug-company profit as well as affect current medical researches. Some analysts also believes that any lowering of drug prices for Medicare consumption will only force drug companies to raise wholesale prices to accommodate the 15 percent discount.

Consumer advocates are contending that the drug-price negotiation will result to a Medicare discount that is the same as the drug discount availed by the Veterans Affairs Department. Right now, Medicare drug prices are higher than that of the VAD.

With the Democrats commitment to push for price negotiation, results may range from the repeal of the ban on drug price negotiation or creation of a new, Medicare drug program that allows government intervention on drug price negotiation.

About 90% of Americans favor the role that the government wants to play in determining drug prices for Medicare members.