Haggling over drug prices for seniors

TEXT OF STORY

SCOTT JAGOW: Back in January, the House passed a bill that would force the government to negotiate drug prices with drug companies. Last night, a Senate committee passed a weaker version of the bill. More now from Pat Loeb.

PAT LOEB: The prescription drug benefit is just over a year old. Right now, it costs the federal government about $50 billion a year. That’s expected to double as more people join the plan.

Democrats say letting Medicare negotiate prices would hold costs down. The Center for Economic Policy Research says the government could save $28 billion a year that way.

However, the congressional budget office says private insurers are already negotiating the best prices. They say any additional savings would be negligible.

Harvard Professor Richard Frank says the savings would be somewhere in the middle. He says negotiating will become more important as unique, new drugs come on the market.

RICHARD FRANK: where you don’t have the opportunity to really have competition then its important to have some institution there sort of protecting the federal budget and protecting taxpayers.

The House bill requires the government to negotiate. The Senate bill merely removes the ban on negotiating.

Republicans have promised to fight any change.

I’m Pat Loeb for Marketplace.