UPDATE 2-US Senate rejects drug imports under health bill
* Two proposals fail to attract enough Senate votes
* Consumer groups express dismay at lawmakers
* Senators aim to close gap in Medicare drug coverage (Adds consumer groups, Medicare, paragraphs 6-9, 11-17)
By Susan Heavey
WASHINGTON, Dec 15 (Reuters) - The U.S. Senate on Tuesday rejected two proposals to allow Americans to buy cheaper prescription medicines from other nations, preserving a deal between the White House and the pharmaceutical industry.
A bipartisan group of more than two dozen senators had sought to allow drug imports from Canada and other countries -- where drugs often sell at a much lower cost than in the United States. But they saw their proposal, which needed 60 votes to pass in the 100-member Senate, fall short by a vote of 51-48.
"We shouldn't be paying the highest prices in the world," Democrat Byron Dorgan said before the vote on his proposal.
Other senators backed a separate measure to allow imports that have been certified as safe by U.S. health officials. Also needing 60 votes, the proposal lost, 56-43.
The measures were offered as part of broad Democratic legislation to overhaul the $2.5 trillion U.S. healthcare system by expanding access to health insurance, tightening insurance industry regulations and controlling certain costs.
"It's really regrettable that the special interests again prevail," Republican Senator John McCain said.
McCain, the 2008 Republican presidential nominee, and President Barack Obama both supported drug imports during last year's presidential campaign. But the Obama administration recently issued a letter from the Food and Drug Administration citing safety concerns.
The importation of drugs from other countries has been proposed for years as a way to lower prescription drug costs.
But allowing cheaper drugs could hurt revenues for the roughly $315 billion pharmaceutical industry, which boasts one of the strongest lobby groups in Washington and is a major backer of Obama's broader drive for healthcare reform.
In an $80 billion, 10-year deal reached earlier this year with the White House and some Democratic senators, the industry agreed to help fund the proposed healthcare reforms through higher taxes and certain price agreements.
Consumer advocacy groups including AARP, the lobby group for older Americans, blasted the Senate's rejection. "Senators had a choice between meaningful savings for their constituents and higher profits for the drug industry. We'll be letting our members know where they stood," AARP's Nancy LeaMond said.
Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson said the drug makers' lobby group continued to back broad reform efforts.
Another proposal could threaten the industry deal with the White House: Senate plans to reduce the gap in drug coverage under the Medicare drug program for the elderly and disabled.
Top Senate Democrats on Monday vowed to close the so-called "doughnut hole" in the prescription drug benefit that occurs after a patient's costs reach $2,700. They must then pay nearly $3,500 on their own before the benefit kicks in again.
Still, it is unclear how Democrats would pay for the additional coverage, how much it would cost or whether the move would elicit further payouts from drug makers.
"We made an $80 billion ironclad commitment to help make healthcare reform a reality back in June, and we have never, at any time, retrenched from that position," PhRMA's Johnson told Reuters, vowing to "keep an open mind as the Senate moves toward a final vote."
The House of Representatives already moved to close the gap gradually by 2019 in its healthcare bill, passed Nov 7. The Senate bill must be merged with the House's before a final bill can be voted on again by Congress and signed into law.
(Reporting by Susan Heavey; Editing by Will Dunham)
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