Senate Majority Leader Harry Reid (D-Nev.) on Tuesday said the Senate soon will consider legislation that would allow the government to negotiate prices with pharmaceutical companies under the Medicare prescription drug benefit, the AP/San Francisco Chronicle reports (Freking, AP/San Francisco Chronicle, 4/11). The House in January passed a bill (HR 4) that would require the HHS secretary to negotiate prices directly with pharmaceutical companies under the Medicare prescription drug benefit and report to Congress in six months (Kaiser Daily Health Policy Report, 3/29). The Senate legislation would lift the ban barring the HHS secretary from negotiating drug prices. Under the bill, congressional agencies such as the Congressional Budget Office would be given access to information about rebates and discounts that drug plans are negotiating with drug manufacturers. The agencies would use the data to inform Congress on how the drug plans are performing with regard to decreasing costs. The bill also includes a provision that would require the HHS secretary to compile a list of research and studies that compare the effectiveness of drugs and medical devices, which could be used by insurers to create a list of drugs to be covered. Senate Finance Committee Chair Max Baucus (D-Mont.), who wrote the bill, said the committee will meet Thursday to discuss the legislation. Baucus said, "We're going to untie the secretary's hands to help seniors. When the market isn't providing fair prices for some drugs seniors need, there should be a way to strike better deals." CBO said the Senate bill would have a "negligible effect on federal spending," which is the same assessment it gave the House legislation (AP/San Francisco Chronicle, 4/11).

A letter from CBO to Sen. Ron Wyden (D-Ore.) addressing Medicare drug price negotiations is available online. A CBO cost analysis of Baucus' legislation also is available online.