Waxman on the drug-price warpath

Watch out, pharma, Waxman is coming. As chair of the House Energy and Commerce Committee and thus one of the House's point people on healthcare, Rep. Henry A. Waxman is vowing to take a bite out of Medicare drug prices. It's not a huge surprise--he's been threatening for awhile--but now he's on record with the New York Times with his pharma-fighting aims.

Namely, he's eyeing the big shift of Medicaid patients to Medicare Part D, back when that pharma-coverage program first began. As you know, when Congress created Part D, it moved some 6.4 million low-income folks off the Medicaid rolls and into Medicare, for the purpose of drug coverage at least.

Because Medicaid has built-in drug-price controls--and Medicare isn't allowed to negotiate drug prices--the government saw its drug costs for those patients immediately rise. To the tune of 30 percent on average, Waxman says. Over the first two years of Part D, the drug industry thus got a $3.7 billion "windfall," Waxman says. "We want it back," Mr. Waxman told the NYT. "We want to make sure the windfall for the drug companies does not continue, and we want to recover the money that has been a windfall."

Of course that recovery would run afoul of pharma's $80 billion cost-cutting reform deal [1] with the Senate, which specifically prohibits rebates for those dual-eligible patients. Waxman says he's not part of that deal. Billy Tauzin, PhRMA chief, said Waxman's efforts would scuttle the agreement anyway: "You not only break the deal, but you break the bank for us."

- read the NYT story [2]

Related Articles:
Brace yourselves for likely Medicaid cuts [3]
Next up in reform debate: Medicare rebates [4]
PhRMA Statement on Medicare Part D Coverage Gap [5]