A leading GOP senator is worried President Obama will issue an executive order to give Medicare the power to negotiate lower drug prices.
“Such an executive order would be in violation of the law,” said Senate Finance Committee Chairman Orrin Hatch, R-Utah, during a hearing on the budget for Health and Human Services.
When Medicare Part D, the benefit program’s prescription drug portion, was approved in 2003 it included a provision specifically banning drug negotiations.
Hatch said that Congress considered Medicare negotiations and “chose against it.”
However, as drug prices have risen over the past two years, Democrats have turned to Medicare negotiations with drug makers as a potential reform to help address the problem.
Hatch, a big supporter of the pharmaceutical industry, noted that the nonpartisan Congressional Budget Office has previously said it doesn’t see Medicare negotiation “as a big saver.”
In 2007, the CBO said that it didn’t see a lot of savings from Medicare negotiation because pharmacy benefit managers, which manage drug plans for insurers, already negotiate for lower prices.
“Has HHS worked with the White House on an executive order that would allow the government to negotiate prices?” he asked HHS Secretary Sylvia Mathews Burwell.
Burwell didn’t say whether her agency is working with the White House on such an order.
She said the administration is focused on preserving innovation of new pharmaceuticals. She referred to a summit held last year that included stakeholders from the industry.
“We are looking for the opportunities that we can do in terms of drug prices because it is becoming an increasing percentage of our overall drug costs,” she said.
