Leading Conservative Groups Oppose Price Fixing Medicare Part D

Earlier this week, 26 prominent conservative organizations, including Americans for Prosperity, the American Conservative Union, and the Center for Freedom and Prosperity, sent a joint letter to Congress urging the body to stop the Obama Administration’s plan to socialize and raid the Medicare prescription drug benefit program.

While believing that the program is far from perfect, the coalition applauded Medicare Part D for bringing some semblance of market prices back to the drug industry. The free market competition brought about by the drug benefit program has allowed seniors to purchase drugs at up to a 30 percent discount from their original sticker prices. In fact, Medicare Part D’s sky-high efficiency has actually cut the cost of the program to half of its original budget estimate.

In spite of the fact that Medicare Part D has worked so well with minimal government intervention, the White House is asking Congress to price-fix the drug company’s already cheap goods. In his most recent budget proposal, President Obama requested that Congress repeal the Medicare Part D non-interference provision, a provision which prevents the U.S. Department of Health and Human Services (HHS) from interfering in Medicare Part D price negotiations. The coalition believes that, by striking this provision, President Obama’s plan will kick free market prices to the curbside, artificially increasing the demand for drugs and causing shortages. As Brent Gardner, American for Vice President of Government Affairs, put it:

Medicare Part D is a rare anomaly among government programs in that costs run below initial projections. Allowing government to meddle with this program and engage in price fixing would have devastating consequences on both seniors and taxpayers. This concept was already tried and failed with Medicaid — we shouldn’t repeat the same mistake.

President Obama’s budget proposal would also mandate that pharmaceutical companies return up to 40 percent of their sales back to Medicare in order to fund other areas of the budget. The coalition argues that this will force drug makers to sell their goods to insurance companies at a loss, driving them to raise prices on consumers.

“This tax will have a significant impact on the market,” the coalition stated. “Drug companies will respond by embedding the cost of the tax in the price of their drugs, driving up the total cost of insurance. Increasing the price of insurance — due to direct government involvement — is a de facto tax increase on America’s seniors. We urge you to oppose any attempts to effectively tax the Medicare Part D program for more reckless spending.”

These conservative groups strongly urge members of Congress to oppose the Obama Administration’s revisions to Medicare Part D, because from their point of view, it isn’t entitlement reform — it’s merely a hidden tax on America’s seniors.

Read the full text of the coalition letter here: http://ow.ly/sDsx301sIik