Democratic House, defying veto threat, passes bill on government bargaining for Medicare drug prices

Friday, January 12th 2007, 5:30 pm

By: News On 6

WASHINGTON (AP) _ Defying a presidential veto threat, the House approved legislation Friday directing the government to negotiate with drug companies in an effort to lower prices for Medicare recipients.

Democrats, winding up an opening-week legislative rush after taking control of Congress, said the measure would help the nation's seniors. The Bush administration called it an unwise government intrusion in a system that is already working well.

The 255-170 vote was short of the two-thirds margin that would be needed to override a presidential veto. The legislation still must pass the Senate, where it could undergo significant changes or be defeated.

The Senate, meanwhile, regained momentum on ethics legislation after running aground Thursday on an effort to shine more light on special-projects earmarks. Senators voted 87-0 Friday for a measure that would deny pensions to members of Congress convicted of serious crimes.

The House drug legislation directs the secretary of Health and Human Services to bargain directly with drug companies, altering a fundamental provision of the 2003 law that created the Medicare drug benefit for seniors.

That Republican-inspired law specifically left government out of the pricing decisions and placed the negotiations over cost in the hands of drug companies and the private insurers that sponsor the Medicare plans.

``Let us not solely entrust the negotiations of drug prices to the very companies who profit from the sales of these drugs,'' said Rep. Jo Ann Emerson of Missouri, one of 24 Republicans to vote for the new legislation.

Not a single Democrat voted against the bill and all 170 no votes were cast by Republicans.

The legislation underscored one of the more profound differences between the political parties _ the Republicans' faith in the ability of the markets to best serve consumers and the Democrats' belief that government can sometimes do better.

``It allows the secretary to do what he was hired to do, to put the interest of the American people first,'' House Democratic Leader Steny Hoyer of Maryland said.

``If passed,'' countered Ron Lewis, R-Ky., ``this bill would allow the federal government to get into the medicine cabinets of millions of Medicare beneficiaries across the country.''

Under the drug program, seniors can choose among competing coverage plans offered by insurance companies. On Wednesday, the administration announced that 23.5 million had enrolled in stand-alone plans as of Jan. 1.

Surveys show that while seniors express satisfaction with the program, a majority also want the government to have the power to negotiate drug prices.

The AARP, the seniors' lobbying group that worked with Republicans in 2003 to pass the initial law, praised the vote Friday. AARP CEO William Novelli called cheaper drugs ``one of the building blocks needed to ensure that Americans have the health and financial security they deserve.''

Merck & Co., the giant pharmaceutical company, said in a statement: ``Congress should be cautious of making changes to this successful program that would direct the government to interfere with price negotiations and could lead to price setting and restrictions on access to medicines.''

The legislation, however, specifically requires that Medicare offer a broad array of drugs to seniors. The nonpartisan Congressional Budget Office says that very provision may render the legislation ineffective because it eliminates one of the government's main bargaining chips.

Advocates pointed to the success of the Veterans Administration drug plan, in which the government negotiates directly with drug manufacturers. The VA places limits on the types of drugs it covers and requires that the medicines be obtained through the mail or at VA hospitals and clinics.

Following Friday's vote, Health and Human Services Secretary Michael Leavitt urged the Senate to ``resist the temptation to undermine a program that is working well for millions of people with Medicare.''

Prospects for the bill in the Senate are unclear. Sen. Max Baucus of Montana, the Democratic chairman of the Finance Committee, had been cool to any negotiations bill, but this week he said he would consider legislation that would give government a limited ability.

``It should be targeted and selective and try not to throw the baby out with the bathwater,'' he said Friday.

The Senate, which typically takes longer to debate legislation than the House, is not expected to take up the bill for some time. ``We don't have a huge rush,'' Baucus said.

Giving the government the power to negotiate drug prices was a popular Democratic rallying cry during last year's congressional election campaign.

The legislation was one of six initiatives that Democrats promised to pass in the early days of the new Congress. Earlier this week, the House passed broad ethics rules, an increase in the minimum wage and expanded government financing of embryonic stem cell research.

On Wednesday and Thursday, the House will take up the remaining two pieces _ cutting interest rates on student loans and ending subsidies for oil companies.

The Senate's action Friday on lawmakers' pensions would expand current law, which denies pensions to those convicted of crimes such as treason or espionage. The legislation would not affect former lawmakers such as Randy Cunningham, R-Calif., and Bob Ney, R-Ohio, both of whom pleaded guilty in separate influence peddling scandals.

The pensions measure is part of a broader ethics bill. As part of that bill, Majority Leader Harry Reid, D-Nev., agreed to accept, with minor changes, a Republican-backed amendment that significantly expands the number of special projects, or earmarks, that must be made public under new disclosure rules.

On Thursday Reid suffered an embarrassing defeat when Sen. Jim DeMint, R-S.C., prevailed in a procedural vote on using a broader view of earmarks adopted earlier by the House. Reid said the Senate would vote on the earmarks issue next Tuesday.