Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.) are set to introduce legislation that would require the HHS secretary to initiate price negotiations with drug companies under certain circumstances and to develop a plan to eliminate a coverage gap in the Medicare Part D drug benefit. The law that created the drug benefit currently prevents the federal government from negotiating over drug prices. Instead, private insurers that offer the benefit or pharmacy benefits managers negotiate for price discounts. Like the Snowe-Wyden proposal, a bill introduced in the House last week by Reps. John Dingell (D-Mich.) and Charles Rangel (D-N.Y.) would remove the legal barrier to negotiations. However, there are differences between the two. The Snowe-Wyden bill would require the secretary to negotiate with drug companies in cases where the drug is single source, the drug was created with substantial taxpayer funding, or a private insurer requests help. Savings from negotiations would be used to reduce the federal deficit or improve the Part D benefit.
Senators to introduce Part D bill
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