Medicare Prescription Drug Rebate Debate

he Medicare Part D Prescription drug program is forbidden by law from getting the best prices for prescription drugs. Unlike the Veterans Administration and Medicaid, Medicare is at the mercy of drug company pricing, forbidden from seeking lower prices for its enrollees.

Allowing Medicare to get fair drug prices would save billions of taxpayer dollars a year, without hurting beneficiary access to medication.

The Medicare Drug Savings Act of 2013,[1]  introduced by Senator Jay Rockefeller and 18 others, is a common sense, cost-effective way to save the Medicare program more than $141 billion. It would allow Medicare to obtain lower drug prices on behalf of low-income Medicare beneficiaries without cutting benefits.[2]

The savings produced by the Medicare Drug Savings Act can and should be used to pay for the cost of reforming the Sustainable Growth Rate, also known as the “Doc Fix”. The Sustainable Growth Rate is an unfair Medicare physician payment scheme which must be addressed by Congress every year. Enacting a permanent fix and ensuring that Medicare physicians are paid fairly will not be cheap. However, the savings from the Drug Savings Act would be enough to correct this flawed formula once and for all.

The pharmaceutical industry and those with whom they have influence are fighting the proposed legislation, claiming it will limit innovation and force drug manufacturers to increase prices. This simply isn’t true.[3]  The truth is that allowing Medicare to get fair drug prices will cut into the pharmaceutical industry’s astronomical profit margin.[4]

At a time when legislators and special interests are trying to dismantle Medicare, or “reform” it on the backs of those who rely on it the most, this is a plan for savings that works.

For more information, see the links below:


[1] http://thomas.loc.gov/cgi-bin/bdquery/z?d113:SN00740
[2] See floor statement of Sen. Rockefeller at: http://www.medicareadvocacy.org/wp-content/uploads/2013/11/FLOOR-STATEMENT-Medicare-Drug-Savings-Act-of-2013.pdf
[3] See “The Medicare Drug Savings Act of 2013 Will Not Result in Cost-Shifting,” Health Care for America Now, july 2013 at: http://www.medicareadvocacy.org/wp-content/uploads/2013/11/How-to-respond-to-cost-shift-arguments-re-rebate-bill-2013-0712i.pdf
[4] See “Big Pharma Pockets $711 Billion in Profits by Price-Gouging taxpayers and Seniors,” Health Care for America Now, April 2013 at: http://healthcareforamericanow.org/2013/04/08/pharma-711-billion-profits-price-gouging-seniors/