Many Democrats believe the government should to negotiate prices for Medicare beneficiaries because it will save American seniors millions of dollars annually for their prescriptions. This is simply not true.
Medicare, the largest purchaser of prescription drugs in the country, would not negotiate prices, it would set prices. With nearly 43 million seniors, Medicare beneficiaries consume over 40% of all prescription drugs. If Medicare sets prices, the drug companies have only two options: 1) absorb the cost by reducing investments in research and creation of new life-saving drugs, or 2) pass along costs to the other 250 million Americans. And the only way to limit the price of drugs Medicare purchases is to limit the number of drugs used by beneficiaries. In other words: to save money, seniors have less choice and prices rise for average Americans.
The non-partisan Congressional Budget Office has stated that allowing the government to negotiate prices would "have a negligible effect on federal spending." So why then would Democrats limit choices for seniors?
Competition among health insurance companies is driving down the cost of this program. Just this week, the Administration reduced its estimate for the 10-year cost of this program by $113 billion, a reduction of over 10%.
Competition is already working to bring lower prices to our seniors. I hope you will see through this transparent attempt. Instead of scoring political points, we need to work on a bipartisan basis to bolster the already successful Medicare Part D program.