April 17, 2007 / 4:39 PM / 12 years ago

White House threatens veto of drug price bill

WASHINGTON (Reuters) - The White House threatened on Tuesday to veto a Senate bill proposing to allow the U.S. government to negotiate prices for prescription drugs under the Medicare program.

The Senate was expected to cast a test vote on Wednesday, when Democrats try to end debate and go forward with consideration of the bill. Republican Charles Grassley of Iowa, who opposes the bill, has vowed to filibuster or talk the bill to death.

In a statement, the White House said the Congressional Budget Office estimated that the Senate bill “would have a negligible effect on federal spending and provide no substantial savings to the government or Medicare beneficiaries.”

President George W. Bush previously vowed to veto the House of Representatives version of the bill. It has tougher language that would require — not just allow — direct negotiation of prices by the government with drug companies.

Medicare is a national health insurance program that covers more than 40 million elderly and disabled Americans. It was expanded at the beginning of 2006 to add a prescription drug benefit provided by dozens of private companies.

The legislation expanding Medicare was approved when Republicans controlled Congress and prohibited the government from negotiating drug prices with manufacturers, such as Pfizer Inc., Merck & Co. Inc. or Eli Lilly and Co..

“It’s a lot of money out of the pockets of taxpayers and into the pockets of big drugmakers,” Democrat John Kerry of Massachusetts said during floor debate. “All we’re doing is lifting a special-interest prohibition.”

Senate Minority Leader Mitch McConnell, a Kentucky Republican who opposes the bill, declined to say if he had the 41 votes needed on Wednesday to keep the legislation bottled up. Both sides have said the vote will be close.

“Most of us (Republicans) feel this new law is working extraordinarily well. Its got overwhelming coverage, overwhelming popularity and it’s coming in under budget,” McConnell told reporters. “In short, its been a tremendous success.”

Democrats, who won back control of Capitol Hill in the last election, say government negotiations would save money both for the federal budget and for older Americans by helping get the lowest drug prices possible. They note that the Department of Veterans Affairs is allowed to negotiate and gets cheaper prices for some drugs than Medicare programs.

But many Republicans, drug makers and other opponents say such a move would limit patient choices and do little to trim prices. Medicare officials also say drug coverage is working fine now and is costing less than expected.

Additional reporting by Richard Cowan

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