Medicare reform bill proposed by US Senate c'tee; non-interference clause ousted

The US Senate Finance Committee, chaired by Max Baucus (Democrat, Montana) has proposed the repeal of the non-interference clause which proscribes the Department of Health and Human Services or the Centers for Medicare and Medicaid Services (CMS) from directly negotiating prices with drugmakers for the Medicare Part D prescription drug benefit (Marketletters passim). The wording of the Senate proposals is significantly more moderate than the legislation carried earlier this year in the House of Representatives (Marketletter January 22). On that occasion, the House required the DHHS to "negotiate discounts," or fix reference prices according to critics, with the drug industry.

Senator Baucus, in a statement, said: "we're going to untie the [HHS] Secretary's hands to help seniors. When the market isn't providing fair prices for some drugs seniors need, there should be a way to strike better deals." He added that, "along with the much-needed power to negotiate, the Secretary will get better information to see where and when it's needed."

Ranking member of the Senate Finance Committee, Charles Grassley (Republican, Iowa), dismissed the Democrat proposals as a sound bite, not sound policy. "Nobody wins," he concluded.