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Report: Medicare Negotiation Rights Worth Millions to Iowa

April 18, 2007

If Congress were to allow Medicare to negotiate with drug companies for better prices, it would be worth $30 billion a year nationwide, according to a report by the Institute for America's Future. The pharmaceutical industry opposes the idea, but more grassroots and senior advocates are asking Congress to revisit the issue. Charlie Wishman with the Iowa Citizens Action Network says the annual savings to Iowans could be $266 million.

"That's because the program as a whole is going to be cheaper, and therefore as taxpayers, our share of this is going to be much less."

Drug companies oppose the idea. Their argument is that free-market competition is better. But Wishman argues that some government agencies actually get better deals by negotiating prices.

"If you look at the Veterans Administration, they are able to negotiate for better prices; however, it was written into the Medicare Part D law that it is illegal for Medicare to negotiate for better drug prices."

Wishman believes lower medication prices would benefit all Iowans, and especially seniors whose fixed incomes make them especially vulnerable.

The report can be found online at

Dick Layman/Eric Mack, Public News Service - IA