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U.S. Senate Takes Up Medicare Prescription Drug Legislation

April 18, 2007

On April 18, the Senate fell 5 votes short of cutting off debate on legislation to amend the Medicare prescription drug program to allow the Secretary of Health and Human Services (HHS) to negotiate directly with drug manufacturers.  The legislation (S 3), would remove a provision in current law that bars the Secretary from negotiating to establish a uniform price and formulary structure for prescription drug coverage.

The 55-42 vote on invoking “cloture” fell 5 votes short of the required 60 votes that were needed to end preliminary debate and move toward passage of the bill.  The bill could be called up again later this year at the request of Senate Majority Leader Harry Reid (D-NV).

“Permissive” v. “Mandatory” Negotiating Authority

S 3 is a narrowly drafted bill that simply removes the so-called “non-interference” protection that prevents HHS from establishing price controls and a single national formulary in the Medicare Part D drug benefits.   As such, it would grant HHS “permissive” negotiating authority, i.e. the Secretary would have the option of negotiation.  By contrast, the House companion (HR 4) – that passed the House in January – contains “mandatory” authority, meaning that the Secretary would be required to negotiate price concessions.

NAMI has not taken a position in the S 3.  By contrast, NAMI did send the following letter to House leaders on HR 4.  Of primary concern with any proposal to remove the “non-interference” protection in Medicare is the impact it will have on broad access to medications to treat mental illness.  This includes current requirements for Medicare drug plans to cover “all or substantially all” of the medications in 6 protected therapeutic classes, including anticonvulsants, antidepressants and antipsychotics. 

During debate on S 3 before the Senate Finance Committee on April 12, the Committee rejected a proposed amendment by Senator Charles Grassley (R-IA) to bar HHS from establishing a single national preferred drug list (PDL) as many state Medicaid programs currently do.  This amendment was rejected 8-13.  A second amendment to allow Medicare drug plans to cover benzodiazepines was offered by Senator Grassley, but withdrawn without a vote.  Similar amendments are expected when S 3 is before the full Senate.  NAMI supports both Grassley Amendments as important preserving broad access to medications for enrollees with mental illness.

Presidential Veto Expected

The Bush Administration has indicated that the President intends to veto any legislative proposal to repeal the non-interference protection.  This position is based on the Administration’s preference for having private sector drug plans negotiate over pricing and formulary, as opposed to the federal government.  As result, the future of both bills is somewhat uncertain.

NAMI’s Agenda for Medicare Drug Benefit Reform

While considerable attention has been focused on the repeal of the “non-interference” provision and giving HHS negotiating authority, NAMI has been pursuing a number of separate proposals to improve drug coverage for Medicare beneficiaries living with mental illness.  Among these are:

  • Restoring coverage of benzodiazepines for treatment of acute mania and anxiety disorders,
  • Placing in the statute the authority for the Secretary to require broad coverage of anticonvulsants, antidepressants and antipsychotics,
  • Eliminating the asset test for the Low-Income Subsidy (LIS), the limit on assets to qualify for discounted coverage with no coverage gap (a.k.a. the “doughnut” hole),
  • Waiving required cost sharing for dual eligibles living in psychiatric residential facilities and board and care homes, and
  • Clarifying rules for pharmacy assistance programs to allow these programs to supplemental Part D coverage.