* 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 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)