Part D paper tiger.

Byline: The Register-Guard

Democrats on Friday kept their promise to pass legislation within the first 100 hours of the 110th Congress requiring the government to negotiate with drug companies over the price of medicines covered by Medicare's Part D prescription drug plan.

Though their hearts were in the right place, the Democrats' legislation is largely symbolic and stands almost no chance of surviving President Bush's threatened veto. Friday's mostly party-line 255-170 vote was well short of the two-thirds majority needed to override a veto. In the Senate, the Democrats' whisker-thin 51-49 majority isn't even enough to prevent a promised filibuster.

If by some miracle enough Republicans changed their minds and joined Democrats to override a veto, the surviving legislation as written would still lack the clout to enable meaningful price negotiations. The bill does revoke the "noninterference provision" written into the 2003 law at the behest of the pharmaceutical lobby. That provision was designed to boost drug company profits by expressly prohibiting the government from negotiating on behalf of Medicare's 43 million beneficiaries for drug discounts.

Other federal prescription drug programs, such as the ones offered by Medicaid and the Veterans Administration, obtain significant savings on drug prices for their clients. One of the reasons the VA program is so successful is because it can approve a formulary - a list of preferred drugs - based on the discounts it negotiates. Drug companies that are unwilling to dicker on price can be excluded from the formulary and lose preferred access to millions of potential customers.

The feel-good bill passed by the House appropriately restores the government's ability to negotiate Medicare drug prices, but it doesn't allow Medicare to give preferential treatment to manufacturers who offer substantial discounts. The incentive for companies to come up with their best deals simply isn't there absent a preferred formulary.

The knock against formularies is that they exclude some drugs, and pharmaceutical companies are quick to point out that Americans want the maximum amount of choice. Yes, choice is a good thing, but there's a price to be paid for unrestricted choice. Government formularies don't deny patients access to drugs, they just don't offer non-formulary drugs at the discounted prices.

Simply ordering Secretary of Health and Human Services Mike Leavitt to negotiate with drug companies won't produce the results Democrats seek. The volume discounts possible with Medicare's millions of beneficiaries are worth pursuing, but they pale in comparison to what would be possible in a Medicare-managed program.

Despite earlier Democratic pledges, experts see no way the volume discounts can come close to closing the infamous "doughnut hole" coverage gap in the Part D drug plan.

Under the coverage gap, Medicare recipients must pay 100 percent of their drug costs each year after the total has reached $2,400 until they've paid an additional $3,850 out of pocket.

The current Part D drug plan was designed by and for industry lobbyists who spent millions to get a sweetheart bill out of a Republican-controlled Congress. Symbolic gestures won't fix the flaws in the current Medicare drug plan.

What's needed is a more comprehensive review that would, ideally, create a Medicare-run prescription plan as an alternative. Simplicity, consistency and affordability should be the guiding principles behind a Medicare drug benefit, not private industry profits.