V I E W P O I N T

Drug Rebates for Medicare-Medicaid Dual Eligibles

The National Committee has endorsed S. 1206 and H.R. 2190, the Medicare Drug Savings Act , introduced by Senator Rockefeller and Representative Waxman. This legislation would require drug manufacturers to pay rebates for the drugs used by people who are dually eligible for Medicare and Medicaid - as they were required to do before passage of the Medicare Modernization Act - and for people receiving the Medicare Part D Low-Income Subsidy.

This legislation saves money for Medicare.  The Congressional Budget Office (CBO) estimates savings of $112 billion over 10 years; the Energy and Commerce Committee Democrats, in their letter to the Super Committee, estimate $135 billion in savings over 10 years.  (Many believe that these savings should go toward fixing physician provider payments which are due to be cut each year because of the SGR formula).

Stopping the drug rebate legislation is a top priority of the Pharmaceutical Research and Manufacturers of America (PhRMA), which argues that drug manufacturers will have to increase the cost of drugs used by seniors in Part D. The American Action Network is taking up their fight and accusing Democrats of cutting Medicare - the same type of argument that was leveled against the Medicare savings in the Affordable Care Act.

American Action Network

According to reports, "The American Action Network - a conservative group backed by Republicans with close ties to Wall Street - 'is launching a large-scale mail and newspaper ad campaign' to shore up Republicans by attacking Democrats for allegedly balancing the budget 'on the backs of seniors' and introducing 'radical' 'Medicaid-style rebates to the Medicare Part D program.'" "The mail campaign will reach 22 congressional districts in 14 states, all of them represented in Congress by Republicans," Politico reports. Below is a sample:

NATIONAL COMMITTEE POSITION

•  We support the Rockefeller/Waxman legislation because it would achieve considerable savings in Medicare spending - estimates are $135 billion over 10 years - without shifting costs to beneficiaries.

•  Drug manufacturers were paying rebates for drugs used by Medicare-Medicaid dual eligibles before passage of the 2003 Medicare Modernization Act.

•  Drug companies should not be threatening to raise prices in Part D due to the rebate proposal. They have benefited greatly from the enactment of a private Medicare drug program that is adding to the deficit; this program was not paid for when passed by Republicans in 2003.

•  Medicare should get the best price for the drugs it purchases for beneficiaries who are also eligible for Medicaid.

•  Actually, we believe Medicare should get the best price for all drugs used by all beneficiaries - which is why we support a Medicare-operated drug plan that allows the government to negotiate with drug manufactures.