Welch says taxpayers, consumers `ripped off’ by Medicare program

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(Host) Congressman Peter Welch says a new report shows that taxpayers and consumers are "getting ripped off" by the Medicare drug assistance program.

Welch says the program could offer lower prices and more extensive coverage if the problems are addressed.

VPR’s Bob Kinzel reports.

(Kinzel) Under Medicare Part D, many seniors are eligible to purchase drug assistance coverage that’s made available through private health insurance companies. In Vermont, just over 98,000 people are eligible for the program.

The report, issued by the House Oversight Committee, concludes that the program has several major flaws. First, the federal government is prohibited from negotiating prices with the drug companies.

Welch notes that the Veterans Administration is allowed to negotiate prices. And he says many drugs purchased through the V.A. are often much cheaper than those offered in the Medicare program.

Welch says there’s no doubt that a number of people have benefited from the Medicare drug program. But he says the plan should have been designed very differently.

He blames last year’s Republican Congress for supporting legislation that he says clearly benefits the drug companies.

(Welch) "It’s been documented now that it’s a rip off for the taxpayer and a rip off for the seniors and it just shows that the fix was in for the pharmaceutical companies. This program is costing the taxpayers $15 billion more than if we just kept this is in the Medicare program."

(Kinzel) The pharmaceutical industry says it needs higher prices in order to conduct valuable research into new life saving drugs. Welch doesn’t buy that argument.

(Welch) "What they don’t say is that they’re spending more on advertising than they are on actual research. I mean, this has been a bonanza for them. And you know they ought to play by the regular rules of capitalism that if you have a bulk purchaser, then you negotiate a bulk price discount."

(Kinzel) Jennifer Wallace Brodeur is the director of AARP – Vermont. She says the program has helped individuals who lacked drug coverage in the past. But she also strongly supports the plan to allow the federal government to negotiate prices.

(Wallace Brodeur) "There obviously are some things we need to go back at and secretarial negotiating authority is one of them. And it’s a top priority for the organization because it will help us control costs overall in the program.

(Kinzel) The U.S. House has passed legislation that gives the federal government the authority to negotiate prices with the drug companies. The measure is now being considered in the Senate.

For VPR News, I’m Bob Kinzel in Montpelier.



AP Photo/Toby Talbot

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