President Bush said he would veto a measure that would allow the Department of Health and Human Services to negotiate Medicare Part D drug prices with pharmaceutical companies, according to a policy statement from the White House Office of Management and Budget.

Last week the Senate Finance Committee approved the “Medicare Fair Prescription Drug Price Act of 2007.” The full Senate this week is expected to vote on the measure, which Democrats believe will lower the overall cost of drugs.

The Senate bill would eliminate the noninterference clause from the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This would give the HHS secretary the ability to negotiate Part D drug prices. Such a bill could affect what states pay for the drug costs of dual-eligible nursing home residents. States currently pay the federal government what they would have paid in drug costs for Medicaid beneficiaries under the former system.

The policy statement is available at