[Congressional Record Volume 145, Number 94 (Tuesday, June 29, 1999)]
[House]
[Pages H4998-H4999]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 PRESCRIPTION DRUG COVERAGE FOR SENIORS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Ohio (Mr. Brown) is recognized 
during morning hour debates for 5 minutes.
  Mr. BROWN of Ohio. Mr. Speaker, today the President proposed a 
Medicare reform package that preserves what is fundamental about 
Medicare. It treats all seniors equally.
  Unlike the privatization/voucher proposal that has resurfaced, the 
President's plan does not jeopardize the core Medicare program so many 
seniors depend on and it does not create different classes of coverage 
for seniors at different income levels. It does not abdicate our 
responsibility to seniors by turning the Medicare program over to 
private managed care plans, the same plans that dropped 400,000 seniors 
last year and are poised to do the same this year.
  What the President's plan does do is provide prescription drug 
coverage for Medicare beneficiaries. Medicare covers hospitalization, 
it covers doctors' visits, and, of course, it should cover prescription 
drugs. That is why we need to modernize Medicare. Prescription drugs 
are no longer supplemental to basic health care. They are integral to 
it. The President's proposal updates Medicare coverage to reflect 
modern medicine. The President's proposal is designed to make 
prescription drugs more affordable for seniors by covering half the 
cost of prescription drugs up to a $2,000 cap.
  The value of this benefit depends on one key variable, the sticker 
price of prescription drugs. Obviously higher prescription drug costs 
will exhaust the benefit much more quickly than lower prescription drug 
costs. That is where the drug companies, Mr. Speaker, come in. Drug 
companies are overpricing their products. This remains true regardless 
of how much these companies spend on research and development. By the 
way, we do not know how much drug companies spend on R&D because they 
have refused to disclose this information to the public or to this 
Congress.

                              {time}  1300

  How do we know that drug companies overprice their products? Just 
look at their profits. Remember, these dollars are the dollars left 
over after research and development. Last year drug company profits 
outpaced those of every other industry by over 5 percentage points. 
Drug company profits last year were $22 billion. Last year the CEO of 
Bristol-Myers Squibb made a $1.2 million salary, a $1.9 million bonus 
and $30.4 million in stock options. Drug companies cannot continue to 
monopoly price their products and expect the American people to 
accommodate them.
  Prescription drug coverage for seniors is critically important, but 
it is not intended to address, nor does it address, the market failure 
in prescription drug pricing that is driving up health care costs and 
hindering access to needed medications here and around the world. Drug 
companies can voluntarily price their products to promote access, which 
they are not doing, or they can disclose their costs and try to justify 
their windfall prices, which they are not doing, or they can continue 
to exploit their monopoly advantage, which they are doing, until 
Congress is forced to regulate their prices like a utility.

[[Page H4999]]

  If drug companies continue to price irresponsibly to make the huge 
profits they are making to pay the huge marketing costs and executive 
salaries they pay, the third option; that is, government regulation of 
huge overblown prescription drug prices, the third option may be the 
only one left.

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