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Survey Says: Let Medicare Chase Cheaper Drug Prices

February 21, 2007

The U.S. Senate will soon vote on a plan that would allow Medicare to use its buying power to barter for lower drug prices, and a new survey commissioned by AARP finds more than 85 percent of Americans in favor of the plan. Currently, Medicare is legally barred from negotiating prescription prices, but Ohio AARP spokesman Bill Sundermeyer says that has led to increased costs for taxpayers.

"The original thought was, if you open it up to the marketplace, drug companies would be forced into a position of lowering their prices. Unfortunately that has not been the case and has been just the opposite."

Unlike Medicare, the Veteran's Administration (VA) can legally negotiate drug prices, and, as a result, Sundermeyer says the VA is saving money, while the Medicare drug program is not.

"The drug prices for all of the vendors who were involved in the program were higher than the prices that were secured by the VA."

Opponents say a plan to open Medicare drug prices to market forces would short-change drug companies, leading to cuts in research and development of new medications. Sundermeyer argues negotiating prices would be an incentive for more R&D, as companies would be forced to compete for Medicare dollars. A similar bill passed the U.S. House last month.

The survey of 1,000 randomly selected adults, conducted by Woelfel Research Associates, is available at

Rob Ferrett/Chris Thomas, Public News Service - OH