May 8th, 2008

When Congress passed the MMA in 2003, they made the single biggest change to Medicare in its history. From the inception of the MMA law several debates ensued, however few were as heated as those surrounding the “non-interference provision”. As its name implies, the non-interference provision was included in the MMA law to prohibit the Secretary of Health & Human Services (HHS) from interfering in the negotiation of drug prices between participating health plans and the drug companies and pharmacies. This provision was specifically included to reduce costs for Medicare beneficiaries and the federal government, and provide plans with incentive for participating in the program and working to obtain the best drug prices possible for their members.

Proponents of this provision felt the lack of government interference would foster greater competition among participating plans, which would result in lower costs, greater numbers of drugs covered by each plan’s formulary, and a greater range of coverage options, as well as reduced costs for the government.

Opponents of this provision felt including government in the negotiations would lead to lower prices for the end consumer.

HR 4 background:
Medicare Prescription Drug Price Negotiation Act of 2007 – Amends title XVIII (Medicare) of the Social Security Act to require the Secretary of Health and Human Services to negotiate with pharmaceutical manufacturers the prices that may be charged to prescription drug plan sponsors and Medicare Advantage organizations for covered part D drugs for part D eligible individuals enrolled under a prescription drug plan or under a Medicare Advantage prescription drug (MA-PD) plan.

Introduced in the House, January 5, 2007
Considered in the House, January 12, 2007
Passed in the House, January 12, 2007