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Choice Vs. Savings: Two Views On Senate Medicare Bill

Tuesday, 17 Apr 2007 | 4:06 PM ET

Should the government be allowed to negotiate Medicare drug prices? Two health-policy experts joined "Power Lunch" to debate whether Federal influence will damage the free market -- or if the current ban on government negotiations hurts the consumer more.

Drug Price Negotiation
Analysis of the benefits and pitfalls of allowing Medicare to negotiate prices with pharmaceutical companies, with Maria Freese, National Committee to Preserve Social Security director of government relations and policy; Robert Moffitt, Heritage Foundation Center for Health Policy director and CNBC's Sue Herera

Last week, the U.S. Senate Finance Committee approved a bill that would allow the government to negotiate Medicare prescription drug prices; in January, the House passed a similar bill -- one that President Bush has vowed to veto. Robert Moffitt, director of The Heritage Foundation's Center for Health Policy, told CNBC's Sue Herera that the government will never truly negotiate drug prices -- but merely fix them.

Moffitt predicted that Federal power will be used to block drugmakers who don't meet the fixed prices, limiting consumers' freedom of choice. And he claimed that the Congressional Budget Office has warned "repeatedly" that the bills couldn't actually control costs without enacting regulations.

But Maria Freese, director of government relations and policy at the National Committee to Preserve Social Security and Medicare, took issue with Moffitt's claims. She said that the bills specifically prohibit creation of a limited formulary, and lifting the ban against government activity would result not only in more affordable medications, but would save U.S. taxpayers some $200 billion in 10 years.

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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

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Kenny Polcari