Editorial: A lack of cooperation

Thursday, Nov. 16, 2006 | 7:05 a.m.

Less than a week after President Bush called for better bipartisan cooperation on Capitol Hill, his Health and Human Services Department secretary said he will oppose the Democrats' call for renegotiation of Medicare drug prices.

According to recent Associated Press stories, Mike Leavitt said he would not consider the idea of the government negotiating with the pharmaceutical companies to get better prices for the drugs used by Medicare recipients. He'd rather continue allowing drug companies and private insurers to set the prices.

Democrats, who will control Congress starting in January, have pledged to take a new approach to the Medicare Part D prescription drug benefit, which was championed by Bush and passed by a Republican-controlled Congress. Under that current plan - for which enrollment was reopened Wednesday and continues though Dec. 31 - about 22.5 million Medicare recipients buy drugs through private insurance plans that the federal government subsidizes. The private insurance companies individually negotiate with the pharmaceutical companies for the costs of the drugs. The law prohibits the government, which would have greater leverage and be able to obtain better price reductions, from such negotiations.

The current system has created a huge taxpayer-supported windfall for large drug companies because private insurers end up paying more for the drugs than the government would. Democrats have long noted that pharmaceutical companies are making money at taxpayers' expense. They hope to introduce legislation that would allow the government to negotiate directly with the drug companies.

The existing plan has become the cash-cow for drug companies that critics said it would be - some companies already are seeing 10 percent profit increases, The New York Times reports. It is time to re-examine this so-called drug "benefit" and make it truly beneficial - to taxpayers and Medicare recipients, rather than the pharmaceutical industry.