October 23,2007

Grassley, Specter Introduce Transparency in Medical Device Pricing Act

WASHINGTON – Sen. Chuck Grassley, ranking member of the Committee on Finance, and Sen. Arlen Specter, ranking member of the Judiciary Committee, today introduced legislation to inject some much-needed transparency into the prices medical device suppliers charge hospitals participating in federal health care programs. The bill is meant to ensure that hospitals can provide care efficiently and economically and prevent the taxpayers from being overcharged for implantable medical devices paid for through Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

“Without any available information on fair prices for medical devices, hospitals are involved in one-sided negotiations with device manufacturers,” Grassley said. “As a result, hospitals are at the mercy of medical device makers who have the upper hand. Some hospitals are now paying a lot more than others for the same medical device. That means health care dollars aren’t being spent wisely. Taxpayers need confidence that they’re getting the most bang for their buck. More transparency will allow market forces to work for the taxpayers’ and patients’ benefit.”

Specter said, “This bill will improve the overall quality and efficiency of our health care system. The legislation sends a message to medical device suppliers that if they want to do business with the federal government, they have to show us their prices. By making this important information readily available, in collaboration with similar initiatives in the private sector, we can help control government spending on healthcare.”

The Transparency in Medical Device Pricing Act of 2007 would require medical device manufacturers, as a condition of receiving direct or indirect payments under Medicare, Medicaid and CHIP, to submit to the Secretary of Health and Human Services on a quarterly basis data on average and median sales prices for all implantable medical devices used in inpatient and outpatient procedures. Manufacturers would be subject to civil monetary penalties from $10,000 to $100,000 for failure to report or misrepresentations of price data. The Secretary would also be required to make the data available to the public on the website of the Centers for Medicare & Medicaid Services and update the website on a quarterly basis.