Letter Supporting Prescription Drug Cost Reduction Act

October 18, 2011

The Honorable Herb Kohl
Chairman
Special Committee on Aging
United States Senate
Washington , DC 20510

Dear Senator Kohl:

On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am contacting you to express our strong support for S. 1699, the Prescription Drug Cost Reduction Act , which you introduced to reduce the cost of prescription drugs paid for under Medicare Part B. Like you, we are concerned about the rising cost of prescription drugs in our country and the impact this has on Medicare's beneficiaries and spending growth.

It is our understanding that your legislation makes changes regarding Part B payments for prescription drugs, drugs that are administered by injection and are given in physicians' offices or are used in infusion pumps or nebulizers. Specifically, S. 1699 would require drug manufacturers to provide Medicare Part B with the same rebates Medicaid receives, and it would allow Medicare to negotiate drug prices in Medicare Part B when it is the majority purchaser. We note the analysis the Department of Health and Human Services Office of Inspector General conducted at your request, in which Inspector General Daniel Levinson reports that in 2010 Medicare and it's beneficiaries could have saved between $1.9 billion and $2.4 billion (or between 21 and 26 percent) if manufacturers of Part B drugs had been required to pay rebates similar to those for Medicaid for the 20 high-dollar Part B drugs.

The additional provisions in your legislation would go a long way toward ensuring that Medicare is receiving the best price for prescription drugs and that Medicare beneficiaries are receiving the most appropriate medications.

We look forward to continuing to work with you to reduce unnecessary spending on prescription drugs, and thank you for your efforts to improve the Medicare program.

Sincerely,

Max Richtman
President & CEO