US Senate rejects Rx tax amendment

The US Senate has voted 51 to 48 to reject an amendment to the tax billwhich would have delayed reducing the marginal top rate of tax from 39.6% to 36% unless Congress enacted a Medicare prescription drug benefit for seniors next year.

The amendment would have originally made tax breaks contingent on the benefit's passage, but its sponsor, John D Rockefeller, agreed to drop this after Senate Finance Committee chairman Charles Grassley pointed out that such a requirement violated the law. Sen Grassley told the debate that the budget reconciliation bill already contains record levels of funding for prescription drugs, reports Reuters, but Sen Rockefeller said his amendment "represents a stark choice between what people said they were committed to for seniors and giving a break to the wealthy sector of the public."

Meantime, Congress has been told that it must not have "unreasonable expectations" for pharmacy benefit managers involved in any forthcoming Medicare prescription drug benefit. Michael O'Grady of the Project HOPE Center for Health Affairs noted PBMs' success, particularly in encouraging the use of cheaper drugs, but added that they would face a new type of risk if, as part of the Medicare benefit, they were required to compete and also share some risk for drug costs.