[Congressional Record Volume 146, Number 32 (Tuesday, March 21, 2000)]
[House]
[Page H1127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  MEDICARE PRESCRIPTION DRUG COVERAGE

  The SPEAKER pro tempore (Mrs. Morella). 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. Madam Speaker, should the Medicare program offer 
prescription drug coverage? What good is insurance if it covers the 
diagnosis, but not the cure. Of course, Medicare should cover 
prescription drugs.
  Why can we not target coverage to just the lowest income seniors? I 
can think of several reasons why that is a bad idea. First, Medicare 
endures in this country because every American contributes to it and 
every American at the age of 65 will benefit from it. A third of all 
seniors, over 10 million seniors, lack drug coverage; millions more are 
barely insured; employers are dropping their retiree coverage and 
private health insurers are cutting back their prescription drug 
benefits.
  This is not an isolated or a status problem that can be solved in a 
piecemeal fashion. It is broad based and it is getting worse. Whether 
or not Medicare should cover prescription drugs should not even be a 
real question. If one believes this Nation benefits from helping 
seniors live in good health and above poverty, then Medicare should 
cover prescription drugs. But it is expensive to cover prescription 
drugs.
  Can our government afford it? We are the wealthiest Nation in the 
world. Our retirees are collectively responsible for our current 
prosperity. Their security and their well-being resonate across 
families, communities, and the Nation. We can afford to, and it is in 
our interests, to provide seniors health coverage that makes sense, and 
that means providing prescription drug coverage. But we cannot afford 
to waste tax dollars that otherwise would be used to bolster Medicare's 
long term solvency. We need to pay fair prices for prescription drugs.
  So are the current prices fair? For the sake of argument let us 
define ``fair'' in this case as necessary to continue a brisk pace of 
research and development. Maybe prices are fair, maybe drug companies 
have no choice but to charge such high prices. But I doubt it. Knowing 
how much drug companies are investing in marketing, knowing what their 
profit margins are, knowing what their CEOs and top executives are 
paid, knowing that any reduction in prices can be largely offset by 
increases in sales volume, I doubt prescription drug prices need to be 
that high.
  But even if drug makers could justify their revenue requirements, how 
could they justify placing such a disproportionate burden on Americans? 
How can they justify charging Americans two and three and four times 
what they charge individuals in other industrialized nations. How and 
why are prescription drugs more expensive here? Because other countries 
will not tolerate these outrageous prices and because we in this 
Congress have tolerated them.
  We do not negotiate prices; we do not demand that drug manufacturers 
reduce their prices to reflect the federally funded portion of research 
and development. We do not make use of the collective purchasing power 
of 38 million seniors to demand fairly-priced drugs. Instead, we nod 
our heads knowingly when drug manufacturers warn us that any action we 
take could stifle research and development. Drug prices can come down 
in the U.S. without stifling that research and development.
  Take the case of medical devices. The Medicare program is the largest 
purchaser of medical devices in the U.S. Medicare pays discounted 
prices for medical devices and yet new devices are developed every day. 
The government funds 40 percent of the R&D in the United States. 
Sources other than drug companies fund another 10 percent of drug 
research and development. Drug companies receive huge tax breaks, drug 
makers pay an effective rate 10 percentage points lower than the 
average for all major industries. Drug profits are 5 percent higher 
than any other industry.
  In 1998, the CEO of Bristol-Meyers-Squibb was paid $146 million in 
salary and benefits. Obviously, a fast way to make money is to charge 
inflated prices for prescription drugs. It works beautifully for the 
drug companies, but it does not make it right.
  So what do we do about high drug prices? The drug industry says the 
best way is to make prescription drugs affordable for seniors by 
enrolling all 38 million in private health insurance plans. That 
clearly has not worked as we have seen the price of health insurance go 
up and up and up.
  We have other options. I have introduced legislation that would give 
drug manufacturers a choice. They could either disclose their true 
costs and work with us to bring the prices down, or they could license 
their patents to generic drug companies and let the free market, using 
good old-fashioned competition, bring prices to a more reasonable 
level.
  The gentleman from Maine (Mr. Allen) has introduced legislation that 
would permit seniors to purchase drugs at discounted prices. The 
gentleman from Vermont (Mr. Sanders) and the gentleman from Arizona 
(Mr. Berry) have introduced legislation that would permit us to import 
drugs when they are priced less expensively in other countries.
  So I ask again, should Medicare provide prescription drug coverage 
for seniors? The answer is yes. Will it be expensive? The answer is 
yes. Is there some way we can make it less expensive? The answer is a 
resounding yes.
  Now, will this Congress add a drug benefit to Medicare this year? I 
do not know the answer to that. We may not get a chance to vote, or the 
majority of the Republican leadership may go with yet another stopgap 
measure rather than taking a logical step in updating the Medicare 
benefits package.

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