[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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