[Congressional Record Volume 145, Number 79 (Monday, June 7, 1999)]
[House]
[Page H3714]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       PRICE CONTROLS DO NOT WORK

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Florida (Mr. Stearns) is 
recognized during morning hour debates for 5 minutes.
  Mr. STEARNS. Mr. Speaker, I rise today to talk about prescription 
drugs. There has been a lot of talk lately about how expensive they are 
and how many people who need them cannot afford them. I understand 
these concerns, but like my colleagues, while I want to make sure that 
our constituents have greater access to prescription drugs, I am 
concerned about the debate that is evolving about prescription drugs 
here in the House.
  Fixing drug prices could very well mean reducing discounts to the 
veterans and other Federal purchasers. In fact, a GAO study concluded 
that expanding access to the reduced prices could lead in fact to 
higher prices. This is what price controls do. The larger the market, 
the greater the economic incentive to raise prices to limit the impact 
of giving lower prices to more purchasers. That makes sense.
  Ultimately that move, Mr. Speaker, could put veterans' access to 
health care at risk. While this type of legislation, these legislative 
initiatives that are coming here, could put the veterans' health care 
at risk, there is no guarantee that it will significantly reduce the 
cost of medicine for Medicare beneficiaries.
  Therefore, I believe we need to figure out how to expand insurance 
coverage for drugs, not attempt to give the government the ability to 
fix prices. Price controls never work. All they do is reduce supply or 
eliminate discounts that are available to some. We have all seen this 
idea before. Their great idea, the people advocating price controls for 
prescription drugs, is it will expand the government discount for 
everyone, give everybody a chance for lower prices, and everyone will 
have access for cheap drugs. That is the basic appeal. But, my 
colleagues, that is socialism. Let us not forget who is getting the 
benefit of these discounts, and of course, we could put others at risk 
who are now getting them.
  Last year there was a misguided attempt to expand the Federal supply 
discounts to State and local governments also. The Department of 
Veterans Affairs estimated that by expanding these discounts so broadly 
that makers of drugs would be forced to respond by reducing or 
eliminating the discounts they give to the Veterans Administration. The 
VA estimated this proposal would cost them as much as $250 million, or 
it would equal the cost of providing care to 50,000 veterans. And just 
so that we all understand, Mr. Speaker, if the drug companies are no 
longer able to give large discounts to the veterans, it means those 
very discounts will not be available to Medicare beneficiaries.
  I believe we should be doing everything we can to help Medicare 
beneficiaries improve access to the drugs they need, but not through 
price controls. One of the easiest things that could be done right away 
is for the administration to move forward on regulation to expand 
Medicare Plus Choice plans. Because of the way the current Medicare 
managed care plans are paid, many areas, including portions of my 
district, do not have managed care plans available to them.
  By simply enacting the Medicare Plus Choice program as part of the 
Balanced Budget Act of 1997 that we passed, Congress sought to expand 
Medicare beneficiaries' access to prescription drugs by allowing them 
to join HMOs that offer these benefits. Congress' goal in the Balanced 
Budget Act was to extend to Medicare beneficiaries the same range of 
choices that exist for all working Americans. Choosing between 
competing health care plans provides greater promise than price 
controls, giving them greater access. It is better than telling the 
pharmaceutical companies that they have to meet a price.
  Mr. Speaker, the administration should no longer delay in expanding 
access to these plans. There was a bipartisan commission that developed 
a proposal that is really worth more discussion. It said that we should 
figure out how Medicare beneficiaries can take advantage of the change 
in health care delivery benefiting every privately insured person, 
including Members of Congress. That is the Federal Employee Health 
Benefit Program. We have discount pharmaceutical drugs. Why not adopt a 
program like the Federal Employee Health Benefit Program, something 
that we all have, Mr. Speaker, and the President and the Senators?
  So why are we talking about this? We should stop talking about 
socialized medicine and the age-old false hope of price controls that 
have never worked.
  Medicare beneficiaries need more from their Members of Congress than 
false promises of cheap drugs through price controls. We need to help 
them gain access to affordable prescriptions through insurance coverage 
and the truly effective price competition of an active marketplace. We 
also need to make sure that whatever reform we pass does not hurt those 
to whom we owe a great debt: veterans. Veterans should not be put at 
risk to give someone in this body a political win.
  Mr. Speaker, I am certain we can find an answer that will help our 
Nation's senior citizens while at the same time protecting our 
veterans.

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