Waxman seeks to save money on Medicare drugs

The New York Times: "Representative Henry A. Waxman is on a crusade to save Medicare billions of dollars — in a way that he says would end up helping the elderly." And he plans to gain some of that savings from the pharmaceutical industry."Drug makers contend they have already worked out a 10-year, $80 billion cost-savings deal with the White House and crucial Senate gatekeepers on the trillion-dollar health care overhaul. The industry says that trying to add Mr. Waxman's provision could scuttle that agreement."

The Times reports that when Medicare's drug coverage, known as Medicare Part D, was added in 2006, about 6.4 million low-income elderly or disabled people were shifted into it "from the government's Medicaid program for the poor. Such people, entitled to Medicare and Medicaid, are known as dual eligibles in health policy-speak. ... Before that shift, because Medicaid administrators have the legal authority to negotiate prices with drug makers, those 6.4 million dual eligibles had their drugs paid for by the government at deeply discounted prices." Under the Part D program, by law, Medicare is not allowed to negotiate drug prices. "When the dual eligibles were added to Medicare's drug rolls, the government suddenly started paying higher prices for their drugs — 30 percent higher, on average, according to an analysis by Mr. Waxman's committee" (Wilson, 8/25).

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