Healthcare Business News
Sen. Jay Rockefeller

Democrats see savings in Medicare drug bills

By Rich Daly
Posted: June 16, 2011 - 2:45 pm ET

Congressional Democrats said $112 billion in deficit reduction could come through Medicare drug bills that were introduced Thursday.

The companion measures introduced in the House and Senate would require drugmakers to pay “rebates” or the difference in the price of pharmaceuticals between Medicare and Medicaid—which can negotiate prices—for so-called dual-eligible beneficiaries. The cost to the federal government of drugs for those beneficiaries rose when they were moved from Medicaid into Medicare at the launch of the Part D program in 2006.

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“We need to do everything possible to responsibly reduce our deficit, but we can’t do it on the backs of some of our most vulnerable citizens,” Sen. Jay Rockefeller (D-W.Va.) said in a written statement. “Rather than dismantling Medicare and Medicaid, we can reduce the deficit by over $112 billion by eliminating a taxpayer-funded windfall for drug companies.”

The legislation is the latest indication of rising alarm among liberal Democrats that ongoing deficit-reduction talks between Vice President Joe Biden and congressional negotiators will result in broad cuts to the federal healthcare programs that make up 25% of the national government’s spending.

Congress rejected an effort to add such a rebate requirement to the 2010 federal healthcare law after drugmakers objected at the time that they had already agreed to an $80 billion cost-savings deal with the White House.

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