[Congressional Record Volume 147, Number 97 (Thursday, July 12, 2001)]
[Senate]
[Pages S7594-S7595]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself, Ms. Collins, Mr. Jeffords, and Mr. 
        Leahy):
  S. 1177. A bill to amend title XI of the Social Security Act to 
clarify that the Secretary of Health and Human Services has the 
authority to treat certain State payments made in an approved 
demonstration project as medical assistance under the Medicaid program 
for purposes of a rebate agreement under section 1927 of the Social 
Security Act, and for other purposes; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise today to introduce a bill along with 
Senator Collins, Jeffords and Leahy to provide the states of Maine and 
Vermont continued authority to expand access to discounted prescription 
drugs under Medicaid.
  Maine has instituted an innovative demonstration program called the 
``Healthy Maine Prescriptions'' program that is leading the way in 
providing affordable prescription drugs for qualifying Maine residents. 
This was made possible because Maine is one of two States, along with 
Vermont, to have received approval from the Secretary of the Department 
of Health and Human Services for demonstration projects to expand 
access to prescription drugs under Medicaid. Thousands of individuals 
with no other prescription drug insurance benefits are enrolled in 
those programs.
  The sad truth is, many low-income individuals cannot afford to 
purchase the drugs prescribed by their doctors. The result is that 
these individuals either split the doses to make them last longer--in 
violation of doctors' orders; they cut back on other necessities like 
food or clothing; or they simply decide not to fill the prescription at 
all--surely a prescription for medical disaster.
  Not only does the inability to pay for medications have an adverse 
and potentially dangerous effect on individuals, it is also a detriment 
to the health care system in general when you consider the number and 
expense of ailments that could have been prevented with the proper 
prescription drug.
  The reason why we are introducing this legislation is that, 
unfortunately, last month, a three-judge panel of the U.S. Court of 
Appeals for the District of Columbia ruled against the Vermont program, 
finding that Vermont ``lacked the authority to offer the same 
prescription rebates offered under federal Medicaid insurance'' because 
Congress ``imposed rebate requirements to reduce the cost of 
Medicaid.'' More recently, because of that ruling, a complaint has been 
brought by PHARMA against the Secretary of Health and Human Services to 
provide injunctive relief in the case of Maine's program.
  This bill sets forth findings that support the need and legitimacy of 
the Maine and Vermont programs and provides, in statute, specific 
authority for these prescription drug discounts for states whose 
waivers were approved before January 31, 2001.
  Specifically, the bill amends Section 1115 of the Social Security 
Act--the portion of the act granting the Secretary of Health and Human 
Services the authority to approve demonstration projections. It makes 
clear that any expenditures the state may make under the demonstration 
project will be treated as payments made under the state plan under 
Medicaid for covered outpatient drugs for purposes of a rebate 
agreement, regardless of whether these expenditures by the state are 
offset or reimbursed, in whole or in part, by rebates received under 
such an agreement.

[[Page S7595]]

  It also makes clear that these projects are entirely consistent with 
the objectives of the Medicaid program. Finally, it states that the 
regular cost-sharing requirements under Medicaid do not have to apply 
in the instance of these programs.
  One of the objectives of the Medicaid program is ``to enable each 
State, as far as practicable under the conditions in such State, to 
provide medical assistance on behalf of families with dependent 
children and of aged, blind, or disabled individuals, whose income and 
resources are insufficient to meet the costs of necessary medical 
services.'' As part of carrying out this objective, every state has 
elected the option of providing prescription drugs as a benefit under 
the Medicaid program, thereby providing an important means of 
increasing the access of low-income individuals to drugs prescribed by 
their doctors.
  Furthermore, Section 1115 of the Social Security Act provides the 
Secretary of Health and Human Services with broad authority to approve 
demonstration projects that are likely to assist in promoting the 
objectives of the Medicaid program, and waive compliance with any of 
the state plan requirements of the Medicaid program. The fact of the 
matter is, Medicaid demonstration projects help promote the objectives 
of the Medicaid program, including obtaining information about options 
for increasing access to prescription drugs for low-income individuals.
  If indeed the States are truly laboratories of democracy--and I 
believe they are--these demonstration projects deserve the chance to 
work, to be examined, and to assist those that they are designed to 
assist. And there is no question of the need--in Maine, 50,000 people 
signed up within the first three weeks of the program.
  Under the ``Healthy Maine Prescriptions Program,'' Maine provides 
prescription drug discounts of up to 25 percent for all adults with 
incomes of up to 300 percent of the Federal Poverty Level. A second 
benefit offering discounts of 80 percent of the cost of prescription 
drugs is available for disabled citizens, and low-income adults over 
the age of 62 who have an income of up to 185 percent of the Federal 
Poverty Level.
  During this time when virtually everyone agrees that something must 
be done to increase access to affordable prescription drugs, we ought 
to be encouraging innovative programs like those in Maine and Vermont. 
Terminating Medicaid demonstration projects prior to their planned 
expiration dates may result in significant waste of public funds and 
may be detrimental to those who have come to rely on such projects.
  We ought to be doing all we can to provide relief to low-income 
Americans, and at the same time give ourselves the opportunity to 
evaluate what works and what doesn't. Maine and Vermont are to be 
commended for their efforts, not punished--they are entirely in keeping 
with the spirit and intent of Medicaid and I hope my colleagues will 
recognize the value of these demonstration projects.
  Ms. COLLINS. Mr. President, I am pleased to join with my colleague 
from Maine, Senator Snowe, and my colleagues from Vermont, Senators 
Jeffords and Leahy, in introducing legislation to ensure that States 
like Maine and Vermont, which have taken the initiative in developing 
innovative programs to make prescription drugs more affordable for 
their citizens, can proceed with these efforts.
  The last 20 years have witnessed dramatic pharmaceutical 
breakthroughs that have helped reduce deaths and disability from heart 
disease, cancer, diabetes, and many other diseases. As a consequence, 
millions of people around the world are leading longer, healthier, and 
more productive lives. These new medical miracles, however, often come 
with hefty price tags, and many people--particularly lower Americans 
without prescription drug coverage--are simply priced our of the 
market.
  As so often happens, the States have been the laboratories for reform 
in this area and have come up with some creative ways to address this 
problem. In January of this year, the Department of Health and Human 
Services granted Maine a waiver under the Medicaid program through 
which States can offer drug discounts of up to 25 percent for 
individuals with incomes up to three times the Federal poverty level. 
Our new Healthy Maine Prescriptions Program includes both this new 
discount prescription drug benefit and a separate benefit, financed 
entirely with State funds, that offers discounts of up to 80 percent 
for low-income elderly and the disabled. Maine began providing benefits 
under the Healthy Maine Prescription Program on June 1st of this year, 
and by June 26th the Department of Human Services had enrolled 50,460 
individuals into the program. Ultimately, it is estimated that 225,000 
Mainers qualify for the program.
  Unfortunately, however, this important new program has run into a 
stumbling block. Last month, in a case brought by the Pharmaceutical 
Research and Manufacturers of America (PhRMA), a three-judge appeals 
panel ruled that a similar program developed by Vermont ``lacked the 
authority to offer the same prescription rebates offered under federal 
Medicaid insurance'' because Congress ``imposed rebate requirements to 
reduce the cost of Medicaid.'' The pharmaceutical trade group has 
subsequently sued the Department of Health and Human Services to block 
the Maine waiver, and the State of Maine has become a party to that 
case.
  The Maine program is different enough from Vermont's to provide a 
different result in court. However, we believe that innovative programs 
like these, which meet such a clear human need, should be able to 
proceed without having to fight endless legal battles. That is why we 
are introducing legislation today to give the Department of Health and 
Human Services clear authority to grant States these kinds of waivers, 
which will allow them to pursue innovative uses of Medicaid, such as 
the Health Maine Prescription program. Secretary of Health and Human 
Services Tommy Thompson made creative use of these kinds of Medicaid 
waivers when he was Governor of Wisconsin. We believe that he should be 
able to continue to do so in his new role as Secretary without the 
chilling effect brought by lawsuits like PhRMA's.
  The legislation we are introducing today will allow States like Maine 
to proceed with the innovative programs they have developed to meet the 
prescription drug needs of their citizens, and I urge all of my 
colleagues to join us in cosponsoring the legislation.

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