[Congressional Record Volume 148, Number 98 (Thursday, July 18, 2002)]
[Senate]
[Pages S7019-S7028]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001--Continued
Amendment No. 4309
(Purpose: To amend title XXIII of the Social Security Act to provide
coverage of outpatient prescription drugs under the medicare program)
Mr. GRAHAM. Madam President, I send to the desk an amendment, which
reflects the contents of S. 2625, the Medicare Outpatient Prescription
Drug Act of 2002.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Florida [Mr. GRAHAM], for himself, Mr.
Miller, Mr. Kennedy, and Mr. Corzine, proposes an amendment
numbered 4309.
Mr. GRAHAM. Madam President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Amendment No. 4310
(Purpose: To amend title XVIII of the Social Security Act to provide
for a medicare voluntary prescription drug delivery program under the
medicare program, to modernize the medicare program, and for other
purposes)
Mr. HATCH. Madam President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Utah [Mr. HATCH], for Mr. Grassley, for himself, Ms.
Snowe, Mr. Jeffords, Mr. Breaux, Mr. Hatch, Ms. Collins, Ms. Landrieu,
Mr. Hutchinson, and Mr. Domenici, proposes an amendment numbered 4310.
Mr. HATCH. I ask unanimous consent that further reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. GRAHAM. Madam President, this amendment represents the essence of
S. 2625, which currently, in addition to those who cosponsored this
amendment, has 29 other colleagues' sponsorship.
This legislation is designed to provide to American seniors
affordable, comprehensive, and reliable universal prescription drug
coverage. This coverage will be available to 39 million older Americans
and disabled citizens who are covered by Medicare--citizens who
voluntarily elect to participate in this new Medicare benefit. More
than 2,750,000 of those 39 million live in my State of Florida and, as
have citizens across America, been waiting year after year after year
for Congress to finally deliver on the commitment that we have made to
modernize Medicare through the provision of a prescription drug
benefit.
When I made remarks on this issue on Tuesday of this week, I based
those remarks on six principles that I believe should be the touchstone
for an affordable, comprehensive universal prescription drug benefit
for senior Americans. Let me briefly reiterate those six principles.
First, we must modernize the Medicare Program. We must bring Medicare
into the 21st century. In my judgment, the provision of a prescription
drug benefit is the single most important reform of the Medicare
Program that we can make. Why is this benefit so central? Because in
the 37 years since the Medicare Program was created, the practice of
medicine has been fundamentally altered by the use of prescription
drugs.
Prescription drugs have improved the quality of people's lives. They
have reduced long recovery periods, and they sometimes can even avoid
surgeries and disabling illnesses, such as strokes and heart attacks.
We must convert Medicare from a program which, since its inception in
1965, has focused on sickness. If you are sick enough to go to the
doctor or to the hospital, Medicare will pay 77 percent, on average, of
your costs. But if you want to maintain the highest level of health,
which generally involves screening, early intervention, and
prescription drugs to monitor the condition, Medicare will pay nothing.
Medicare must be converted from a sickness program to a wellness
program if it is to serve the needs of senior Americans in the 21st
century. That is the first principle.
The second principle is that beneficiaries must be provided with a
real benefit. To be successful, this program must attract a wide
variety of beneficiaries.
The program will be voluntary, so it must attract enrollment with
reasonable and reliable prices and a benefit that pays off from day
one. In this manner, we will be able to attract all seniors, from those
who today have high drug needs to those who are healthy but might be
concerned that they, too, could be struck down with a heart attack or
other disabling condition.
If we are able to have a program that will attract that broad range
of elderly in terms of their current state of health, then we will have
a program that will be actuarially solid for years to come.
[[Page S7020]]
Seniors must be able to understand the benefit they receive. The
coverage should be consistent, and seniors should receive that coverage
without any unexpected gaps or omissions. In other words, it should
operate as much as possible as the employer-provided coverage which
they had during their working years.
The third principle is that beneficiaries must have choice. All
Americans deserve choice in how they receive their health care. We must
offer choice in who delivers their prescription drugs, which is why we
must assure that each region of the country has an adequate number of
providers of the prescription drug benefit. This will encourage
competition, helping to keep costs down for seniors, as well as the
taxpayers of the Medicare Program, and assure a sustainable
prescription drug benefit for this and future generations of America's
seniors.
Principle No. 4 is we must use a delivery system upon which seniors
can rely. It must be a tried-and-true system, not an untested scheme
that will turn older Americans into laboratory animals upon which to be
experimented. We want to model our delivery system on what private
sector plans have used and with what seniors are familiar.
Principle No. 5 is the program must be affordable. The reality is the
majority of seniors live on fixed incomes. In my State of Florida,
where many people have the idea that all or most of the seniors live at
a level of luxury, the median income of our 2,750,000 seniors is
$13,982 a year, and 770,000 seniors in our State live on incomes below
150 percent of poverty.
These fixed-income seniors need a prescription drug benefit that has
a low premium, that does not require a deductible, has reasonable
copayments that are easy to calculate, and will avoid wide variations
from month to month in their coverage.
Finally, principle No. 6 is we must have a fiscally prudent program.
We must find that balance between giving seniors what they need, that
balance between a realistic assessment of what prescription drug costs
are likely to be over the next 10 years for our seniors, and, finally,
the balance of what our overall Federal budget will allow.
The Graham-Miller-Kennedy-Corzine amendment meets these six criteria.
As a result, it has the support of the major organizations that
represent America's seniors, including AARP.
I ask unanimous consent to print in the Record eight letters of
support of this legislation.
There being no objection, the material was ordered to be printed in
the Record, as follows:
AARP,
National Headquarters,
Washington, DC, June 12, 2002.
Hon. Bob Graham,
Hon. Zill Miller,
U.S. Senate, Washington, DC.
Dear Senators: We are pleased to restate our position on
your revised Medicare prescription drug proposal. Action on a
bipartisan prescription drug benefit is a top priority for
AARP, our members and the nation.
Medicare beneficiaries have waited long enough for access
to meaningful, affordable prescription drug coverage. We know
from our membership that in order for a Medicare prescription
drug benefit comprehensive coverage it must include:
An affordable premium and coinsurance;
Meaningful catastrophic stop-loss that limits out-of-pocket
costs;
A benefit that does not expose beneficiaries to a gap in
insurance coverage;
Additional assistance for low-income beneficiaries; and
Quality and safety features to curb unnecessary costs and
prevent dangerous drug interactions.
AARP supports your initiative to incorporate these goals.
We commend you for including key elements in your proposal
that Medicare beneficiaries and our members have indicated
they find valuable. For instance, your proposal includes a
premium that many Medicare beneficiaries view as affordable
and a benefit design that does not include a gap in insurance
coverage. Your proposal also now includes co-payments
specified as dollar amounts, an approach that our research
shows our members prefer to coinsurance. In our view, this
plan could provide real value to beneficiaries in protecting
them against the high costs of prescription drugs.
It is important that any prescription drug benefit be made
a permanent and stable part of Medicare, and we want to work
with you to achieve this before enactment.
Thank you for your leadership on this issue. We look
forward to working with you and your colleagues as the
legislation moves forward. AARP will continue to urge
Congress to work in a bipartisan manner to enact affordable,
meaningful Medicare prescription drug coverage.
Sincerely,
William D. Novelli,
Executive Director and CEO.
____
Generic Pharmaceutical
Association,
Washington, DC, June 12, 2002.
Hon. Bob Graham,
524 Hart Senate Office Building,
Washington, DC.
Dear Senator Graham: On behalf of the Generic
Pharmaceutical Association (GPhA), we would like to commend
you and Senators Miller and Kennedy for your leadership in
introducing legislation to create a Medicare prescription
drug benefit for our nation's seniors. We agree with you that
the passage and enactment of a voluntary Medicare
prescription drug benefit is long overdue. We are strongly
supportive of your innovative tiered co-pay structure, as
well as the other provisions advocated by you and your
colleagues, that are designed to increase the utilization of
high-quality, affordable generic medicines.
Generic pharmaceuticals have a proven track record of
substantially lowering drug costs. Studies have shown that
for every 1 percent increase in generic drug utilization,
consumer, business, and health plan purchasers save over $1
billion. The increased use of generics can play an invaluable
role in helping Medicare, Medicaid, the Federal Employees
Health Benefit Plan (FEHBP) and other Federal and private
plans assure that beneficiaries have access to quality,
affordable medications. A tiered co-pay system with a
significant differential between brand and generic
pharmaceuticals will ensure an appropriate incentive is in
place for seniors to consider more cost-effective options
when making choices about pharmaceutical therapies. We
believe an explicit dollar co-pay will also provide seniors
with the comfort of knowing they will pay a fixed cost to
have their prescriptions filled.
With your leadership, the Graham/Miller/Kennedy bill
employs a number of private sector best practices that are
now widely used to assure access to cost-effective, quality
affordable medications. These provisions not only encourage
the appropriate and beneficial use of these products, but
provide unbiased and greatly needed educational information
to the public about the benefits of these medicines.
The Graham/Miller/Kennedy bill adheres to GPhA's principles
for creating a Medicare prescription drug benefit and steers
the Medicare reform debate down a prudent public policy path.
We look forward to working with you, your cosponsors and with
other Members of the House and Senate of both parties to
further our common objective of providing our nation's nearly
40 million Medicare beneficiaries and the taxpayers who help
support them with the most affordable and highest quality
prescription drug benefit possible. If the rest of the
Congress and the Administration follow your lead in
recognizing the role generics must play in reaching this
objective, we are confident we will achieve this goal.
Thank you again for your efforts. If we can be of any
assistance to you, please do not hesitate to call.
Sincerely,
Kathleen Jaeger,
President and CEO.
____
The National Council on the Aging,
Washington, DC. June 11, 2002.
Hon. Bob Graham,
524 Hart Senate Office Building, Washington, DC.
Dear Senator Graham: On behalf of the National Council on
the Aging (NCOA)--the nation's first organization formed to
represent America's seniors and those who serve them--I write
to commend and thank you for your proposal to provide
meaningful Medicare prescription drug coverage to America's
seniors. The Medicare Outpatient Prescription Drug Act of
2002 is consistent with the principles supported by the vast
majority of organizations representing Medicare
beneficiaries. It provides the foundation for a vehicle that
we hope can achieve bipartisan consensus on this issue this
year.
NCOA is particularly pleased that your legislation would
provide prescription drug coverage that is universal,
voluntary, reliable, and continuous. Other proposals being
offered include significant coverage gaps and would fail to
solve the problem. Under such bills, a significant number of
beneficiaries would not want to participate in the program,
and many of those who do participate would continue to be
forced to choose between buying food and essential medicines.
We commend many of the modifications you have made to your
Medicare bill from last year. These improvements include a
significantly lower premium, the option to provide a flat
copayment, an earlier effective date, and assistance with the
very first prescription. We believe these changes will make
the coverage affordable and attractive to the vast majority
of beneficiaries, which is so critical to making a voluntary
prescription drug program work. While we have concerns about
the need to reauthorize the program after 2010, we understand
the budget trade-offs needed to provide meaningful and
attractive coverage, and fully expect that the Congress would
reauthorize the program.
NCOA is also pleased that your proposal does not include
price controls and that the
[[Page S7021]]
program would promote stability and efficiency through
administration by multiple, competing Pharmacy Benefit
Managers (PBMs), using management tools available in the
private sector in which PBMs would be at risk for their
performance, including effective cost containment.
NCOA deeply appreciates your efforts to move this critical
debate in a direction that guarantees access to meaningful
coverage--even in rural and frontier areas of the country--
and responds in a constructive manner to many of the specific
concerns that have been raised regarding other Medicare
prescription drug proposals.
It is impossible to have real health security without
coverage for prescription drugs. Prescription drug coverage
is the number one legislative priority for America's seniors.
Virtually every member of Congress has made campaign promises
to try to pass a good prescription drug bill. The time has
come to get serious and to work together to achieve consensus
on the issues in controversy. Your proposal provides us with
an excellent starting point.
NCOA looks forward to working on a bipartisan basis with
you and other members of Congress to pass legislation this
year that provides meaningful, continuous, affordable
prescription drug coverage to all Medicare beneficiaries.
Sincerely,
James Firman,
President and CEO.
____
Families USA,
Washington, DC. June 13, 2002.
Senator Bob Graham,
524 Hart Senate Office Building, Washington DC.
Dear Senator Graham: We congratulate you and Senators
Miller, Kennedy and Rockefeller on the introduction of your
bill, ``The Medicare Outpatient Prescription Drug Act,''
which provides prescription drug benefit for Medicare
beneficiaries.
This is an issue of utmost important to all Americans who
need prescription drugs, especially to seniors and people
with disabilities. As you well know senors' ability to afford
prescription drugs is a particularly difficult problem today.
In our 2001 report entitled, ``Enough to Make You Sick:
Prescription Drug Prices for the Elderly, ``we concluded that
the 50 top drugs used by seniors rose 2.3 times the rate of
inflation between 2000 and 2001. We are in the process of
updating this report for last year, and our preliminary data
shows that this devastating rate of price increases
continues. Millions of seniors have limited income and no, or
limited, drug coverage and will find themselves deciding
whether to buy drugs or pay for other essentials.
Your bill addressees many important design issue that we
care about in a Medicare prescription drug benefit. The
benefit is universal, comprehensive, and is delivered through
the Medicare program, ensuring that seniors know it will be
available to them when it is needed. Low-income people get
extra assistance. Also, there are provisions to assure that
costs will be contained and quality maintained.
Please let us know how we can assist you to move this bill
toward enactment so that all Medicare beneficiaries can have
access to the prescription drugs they need.
Sincerely,
Ronald F. Pollack,
Executive Director.
____
National Committee to Preserve Social Security and
Medicare,
Washington, DC. June 12, 2002.
Senator Bob Graham,
Senate Hart Office Building 524, Washington, DC.
Dear Senator Graham: On behalf of the millions of members
and supporters of the National Committee to Preserve Social
Security and Medicare, I write in support of your Medicare
prescription drug legislation that will provide much needed
relief to seniors. Your bill contains all of the elements
that seniors need in a comprehensive drug benefit under
Medicare, such as universal, voluntary, affordable, not means
tested and most importantly, with a defined benefit, so that
seniors can plan accordingly. Prescription drugs prices are
increasing over 17% per year (faster than inflation) and
seniors are spending more on out-of-pocket drug expenditures
than ever. The time is now to enact a drug benefit that will
provide the Medicare beneficiary with some assistance.
We are pleased that your plan would be available for
seniors, no matter where they live. Our members have
expressed to us that a prescription drug benefit must be
affordable. We believe that a plan such as yours, with no
annual deductible and a $4,000 cap on out of pocket
expenditures, is reasonable and one that most seniors would
be able to afford.
We applaud you for your leadership in this area. Please let
me know how we can further support your efforts.
Sincerely,
Barbara Kennelly,
President.
____
AFSCME,
American Federation of State, County and Municipal
Employees, AFL-CIO,
Washington, DC, June 12, 2002.
Senator Edward Kennedy,
Senator Bob Graham,
Senator Zell Miller,
U.S. Senate, Washington, DC.
Dear Senators: On behalf of the 1.3 million members of the
American Federation of State, County and Municipal Employees
(AFSCME), I am writing to express our support for the
Medicare prescription drug benefit proposal you unveiled
today.
AFSCME has long supported the creation of a Medicare
prescription drug benefit that is comprehensive in coverage,
affordable and voluntary for all Medicare beneficiaries. We
believe that your proposal is a solid step forward in meeting
these standards.
In particular, we applaud your proposal's provisions for
continuous coverage. We believe that it is one of the most
critical components of a meaningful prescription drug
benefit. Beneficiaries must have coverage they can count on,
with no gaps in coverage. Doing anything less would force our
seniors to pay all prescription costs out of their own pocket
when they will need the coverage the most.
Since Medicare was started over 35 years ago, many
illnesses that were once only treatable in a hospital can now
be effectively treated with prescription drugs. Adding a drug
benefit to the program is the most urgently needed Medicare
reform. We applaud you for not holding the prescription drug
benefit hostage to force radical privatization proposals that
would cut benefits and increase costs for retirees.
We look forward to working with you and the other sponsors
of this important legislation. A Medicare prescription drug
benefit is long overdue, and our nation's seniors deserve no
less.
Sincerely,
Charles M. Loveless,
Director of Legislation.
____
Legislative Alert
American Federation of Labor and,Congress of Industrial
Organizations,
Washington, DC, June 12, 2002.
Hon. Bob Graham,
U.S. Senate, 524 Hart Senate Office Building, Washington, DC.
Dear Senator Graham. On behalf of the 13 million members of
the AFL-CIO, I am writing to commend you for your efforts to
provide much-needed relief to Medicare beneficiaries. Your
proposal to create a voluntary drug benefit within the
Medicare program represents an encouraging and solid step
toward enacting the one reform most urgently needed for
Medicare.
Seniors need a real benefit that provides comprehensive,
continuous and certain coverage. The Graham-Miller-Kennedy
bill provides that benefit, giving seniors coverage they can
count on. A Medicare drug benefit must also be affordable for
beneficiaries. The $25 monthly premium and zero deductible in
your proposal means seniors need only pay an affordable
premium to begin getting coverage immediately. And no senior
will have to pay more than $40 for the drugs they need and
often will pay less.
In addition, your proposal would not put at risk those
retires who currently have some prescription drug coverage
through an employer. Retiree heath care is the primary source
of prescription drug coverage for seniors, and your proposal
rightly provides from relief for employers that choose to
continue that coverage.
A proposal widely reported under consideration by House
Republican leaders offers only unreliable, expensive and
unworkable coverage through private plans, with an enormous
gap in coverage that leaves seniors without any coverage at
all for drug costs between $2000 and $4500. And the only
relief for employers is if they drop the coverage they now
offer. Such a proposal will not move us any closer to a real
benefit.
As this debate moves forward, we want to work with you and
your co-sponsors to enact the best possible Medicare drug
benefit. We appreciate your role in advancing that process.
Sincerely,
William Samuel, Director,
Department of Legislation.
____
Alliance for Retired Americans,
Washington, DC, June 12, 2002.
Senator Edward M. Kennedy,
U.S. Senate, Washington, DC.
Dear Senator Kennedy: On behalf of the over 2.7 million
members of the Alliance for Retired Americans, I want to
thank you for your tireless work on behalf of older and
disabled Americans to create a Medicare prescription drug
benefit program. I also want to express our views on the
Medicare prescription drug legislation proposed by you and
Senators Graham and Miller. The Alliance supports this
proposal as a positive step forward in the effort to create a
Medicare prescription drug benefit program.
The Alliance for Retired Americans believes that all older
and disabled Americans need an affordable, comprehensive, and
voluntary Medicare prescription drug benefit now. Such a
benefit program should have low monthly premiums, annual
deductibles, and be administered as part of the Medicare
program. Your proposed legislation meets these Alliance
principles. Unlike other proposals that would begin in 2005,
your plan would start in 2004, which gives beneficiaries the
coverage they need a full year earlier.
The Alliance will work to enact your legislation. During
legislative deliberations, the Alliance will seek to improve
benefits because we believe that an 80/20 co-insurance
[[Page S7022]]
payment system, like the rest of Medicare, will provide the
best benefits for older and disabled Americans. The Alliance
also supports a $2,000 annual catastrophic cap. We will
continue to work to improve any legislation that moves
through Congress in order to reach these goals.
Older Americans will spend $1.8 trillion on prescription
drugs during the next decade. The inflation rate for
prescription drugs will continue at an annual double digit
pace as well. Our members and indeed all Americans simply
cannot afford these costs. We look forward to working with
you and Senators Graham and Miller to enact a comprehensive
Medicare prescription drug benefit as soon as possible.
Sincerely yours,
Edward F. Coyle
Executive Director.
____
Mr. GRAHAM. Madam President, what does our plan provide? Our plan
will require of seniors who voluntarily elect to participate a $25
monthly premium to do so. There will be no deductible. There is an
easy-to-understand copayment system, which is $10 per prescription for
generic medication and $40 per brand name, medically necessary drug.
I will pause at this point and point out the connectedness of this
plan and this structure of benefits to the underlying legislation we
have been discussing throughout the week to make it easier for all
Americans to gain access to generic drugs.
Our legislation has a strong incentive for the use of generic drugs
by having the $10 copayment for generics, $40 for brand names. To the
extent that more generics are available, which, of course, is the
purpose of the underlying bill, we will reduce the cost of this program
and make it even more affordable to senior Americans.
We set a maximum out-of-pocket expense of $4,000 per year. Above
that, all of the senior's drug cost, including copayments, will be
covered. This is the so-called catastrophic coverage.
Seniors with incomes below 135 percent of the poverty level will pay
no premiums, and beneficiaries with incomes between 135 and 150 percent
of poverty will pay reduced premiums. We want all senior Americans to
be able to participate in this program.
Our plan uses the same delivery model that America's private
insurance companies utilize. It happens to also be the same model used
by the Federal Employees Health Benefits Plan, a plan that covers
virtually everybody in this Chamber.
We use pharmacy benefit managers, or PBMs, to deliver and manage
prescription drug benefits, just as they do in virtually every major
private and public sector employee health insurance plan. PBMs are
companies that negotiate with pharmaceutical companies to get
discounted prices based on their volume purchase.
We would allow all seniors a choice of which PBM to join. This would
give choice to seniors, and it would give them the opportunity to shop
among the PBMs that are competing for their business so that they, the
senior, can decide which PBM best meets their particular needs,
including factors such as the availability of mail order delivery and
access to local pharmacies.
PBMs would be accountable to the Medicare Program and to all
taxpayers. They would be required to demonstrate their ability to keep
costs down through effective purchasing practices and provide quality
service in order to win and keep a Government contract.
CBO has given us an estimate of our plan today. CBO estimates that
our plan through the year 2010 would cost $421 billion. Taking into
account, in addition to the base cost, the benefits that would flow by
the adoption of the underlying generic bill, that figure is reduced to
$407 billion through the year 2010.
That date is important because part of our legislation is a required
reauthorization by the Congress in 2010. In much the same way as we are
now reauthorizing Welfare to Work after it has been in place for 6
years, we would require the reauthorization of this prescription drug
benefit so we can take into account the experience we will have gained
and make an assessment as to what kind of prescription drug benefit we
want to carry into the future.
If the program is extended, then the 10-year cost of the plan through
the year 2012 would be an additional $173 billion.
Because this prescription drug benefit would represent the largest
expansion of the Medicare Program in its 37-year history, we believe it
is important for Congress to review the program to see how well it is
working and whether it has given seniors the coverage they need.
Madam President, our good friend and colleague from Utah has
introduced legislation which has a similar objective to the one we are
proposing; that is, to assure that seniors would have access to a
comprehensive, universal, affordable prescription drug benefit.
I have comments to make about the plan which has been introduced. I
will defer those comments, however, until Monday.
To conclude tonight, I want to say we are still hearing the
background noise that all of this is theater, that there is no real
commitment to passing a prescription drug benefit in the year 2002, as
there was not in 2001, 2000, and on for the many years which seniors
have been promised by different people seeking office that if elected
they would deliver on a prescription drug benefit.
What we are committed to today--and I believe this feeling also
carries to my good friend from Utah and those who have joined him in
his legislation--is we are not interested in election year posturing.
We want to actually accomplish a result. We want to be able to say to
our senior Americans, we have turned the corner. No longer are you
participating in a sickness program, but you are now participating in a
program which has as its primary commitment assuring that all senior
Americans can live in the highest state of good health.
Our Nation's seniors have waited too long for the help they need to
purchase their prescription drugs. An unconscionable number of these
people are forced every day to choose between filling a doctor's
prescription for a needed medication and paying for other basic needs.
These people are not numbers in a statistical database. They are not
strangers. These people who have been waiting and waiting are our
parents and our grandparents. They are our neighbors. They are the
people we used to work with. They are our friends. They are the
Americans of the great generation.
We now have a challenge, an opportunity, a responsibility to respond
to this great need that they have of some assistance in paying for what
has become the fastest growing segment of our health care costs--
prescription drugs. If we do not act on the prescription drug benefit
this year, I fear the American people will lose confidence in the
Congress and our ability to make the tough choices necessary to address
our country's priority domestic issues.
Certainly, I do not claim that our bill is perfect, but I do suggest
that it is as good as our collective efforts have been able to make it
at this point. I believe this amendment justifies the support of our
colleagues, as it has already received the support of virtually every
major organization which represents the interests of America's seniors.
So I look forward to a full discussion and debate in the best
tradition of this great deliberative body. I hope at the end of that
debate we not only will have a better understanding of the options
before us, but we will have reached a conclusion that will command the
votes of a sufficient number of Members of this Senate that we can tell
our senior constituents we have heard their long call for assistance in
paying the costs of increasingly expensive prescription drugs; that we
understand the importance of that call, and that we are now responding
to that call. That is the challenge and that is my hope of what will be
the conclusion of this debate.
The PRESIDING OFFICER (Mr. Dayton). The Senator from Utah.
Mr. HATCH. I want to express my appreciation to my colleague from
Florida. He is an eminent member of the Senate Finance Committee. He is
a very serious, reflective Member. He has worked hard to come up with
his bill. I respect him for it, and I wish him well with it. However, I
will say a few things about Senator Graham's bill before I finish.
Tonight, I introduced an amendment that is called the tripartisan
bill. I introduced it on behalf of Senator Grassley for himself,
Senators Snowe, Jeffords, Breaux, Collins, Landrieu,
[[Page S7023]]
Hutchinson, Domenici, and myself. We believe this tripartisan bill is
the only nonpartisan bill being considered by the Senate at this time.
It is a very important effort by people of goodwill on both sides and,
of course, the only Independent in the Senate.
I want to take this opportunity to talk a little bit about the
tripartisan bill. Many of these points were raised two nights ago, when
I spoke on the Senate floor about our tripartisan proposal. Tonight, I
will raise them again because I believe that all of them are extremely
important and worth listening to again.
While drafting this legislation, we tried to reach out to everyone
who has an interest in this issue. We have taken this very seriously,
and we have worked on it for well over a year. This has required many
hours of meetings, among all of the sponsors of the bill and our staffs
along with other interested parties. Let me assure everyone that this
has been a unified effort, one which has required some give and take
from all of us.
We have worked with CBO to come up with a cost-efficient solution.
The Congressional Budget Office has told us that our bill will cost
$370 billion over 10 years. As far as I know, the Daschle-Graham-Miller
bill, S. 2625, does not have a CBO score, but I suspect that it is
extremely expensive. The distinguished Senator may have some idea of
what that score is because he has indicated that the amendment that he
just introduced will cost around $600 billion, if I understand it, over
10 years. The prescription drug program in the Graham legislation would
include a sunset at the end of 2010, which is one of the problems with
this legislation.
On the other hand, there are no sunsets within our bill. Our
tripartisan bill is a permanent solution, not a temporary solution. CBO
informs us that once our bill is implemented, 99 percent of all seniors
will have drug coverage. That would be truly remarkable. And that is
CBO, not us.
Again, this is a nonpartisan approach to providing prescription drugs
to Medicare beneficiaries. On the other hand, the Daschle-Graham-Miller
bill sunsets after 2010. So in my opinion, that bill is only a
temporary solution.
Does a temporary solution truly help seniors in the long run? I do
not think it does. Our tripartisan bill provides all Medicare
beneficiaries with affordable prescription drug coverage because we let
competition determine the prices, not Government bureaucrats. That is
how we keep prices of drugs down. It is not a good idea to let the
Government set the price, which is what I predict will happen if the
Daschle-Graham bill becomes law.
We also provide additional subsidies to low-income seniors so they,
too, can afford to pay for their drugs. I find it absolutely appalling
that there are people in our country who have to choose between buying
food and eating, and having prescription drugs. The tripartisan group's
goal is to put an end to that. Through our bill, we will provide
additional assistance to those seniors who need it. For example, the 10
million beneficiaries with incomes below 135 percent of poverty will
have 95 percent of their prescription drug costs covered by this plan
with no monthly premium. They will not have to pay a monthly premium.
In addition, these seniors are exempt from the deductible and will pay
well under $5 for their brand name and generic prescriptions. Finally,
these beneficiaries who reach the catastrophic coverage limit will have
full protection against all drug costs, with no coinsurance.
The 11.7 million lower income beneficiaries with incomes below 150
percent of the poverty level are also exempt from the $3,450 benefit
limit. Enrollees between 135 percent and the 150 percent of the Federal
poverty level will also receive a generous Federal subsidy that on
average lowers their monthly premium to anywhere between 0 and $24 a
month. The beneficiary's monthly premium will be based on a sliding
scale, according to his or her level of income.
It also cuts in half their annual drug bills. All other enrollees
will have access to discounted prescriptions after reaching the $3,450
benefit limit and a critically important $3,700 catastrophic limit
which protects seniors from high out-of-pocket costs. It is also
important to note that 80 percent of Medicare beneficiaries will never
experience a gap in coverage.
Let me take a few minutes before we finish this evening to talk about
my views on S. 2625, the Daschle-Graham-Miller Medicare Outpatient
Prescription Drug Act of 2002. I understand that a new Graham bill has
been filed and we are currently reviewing the details. We have not been
able to review it very thoroughly, but we have a quick preview of it,
and perhaps I can express my thoughts this evening just so people will
have something to consider over the weekend.
Again, I commend my good friend, a person I admire greatly, Senator
Bob Graham, for his bill. I know he has worked hard. I know he has
tried his best. I know he is representing his people in Florida very
well and he has worked long and hard on this issue. I respect him for
that. I respect him personally. He knows that. He, like those in the
Senate in the tripartisan group, has the same goal: To provide Medicare
beneficiaries with prescription drug benefits. But that is where the
similarities end.
My biggest concern with the new version of the Daschle-Graham bill is
still the cost. My understanding is that this bill costs close to $600
billion, over a 10-year period. We all agree a Medicare drug proposal
will cost a lot of money, but the Daschle-Graham-Miller bill is, in my
opinion, too expensive to both current and future generations because
of the magnitude of its costs.
And bear in mind, this bill is still not a permanent program. It
sunsets. It sunsets after 2010, which makes it a less than 10 year
benefit for approximately $600 billion. That is if I am right on the
scoring. I believe having the sunset on such an important bill just to
get a decent score from CBO is not being as fiscally responsible as I
would like to be. I understand there is some window-dressing language
that attempts to address the sunset, but to me that is all it is--
window dressing.
Having said that, I am absolutely astounded that the AARP has come
out and ask its members to support a bill that does not have a
permanent benefit. That is just irresponsible on the part of the AARP.
They are, in my opinion, not looking out for the best interests of
seniors by asking their members to support this type of a bill. I am
very disappointed in the AARP for making what I believe is a poor
judgment call.
Again, one of my top concerns with the both versions of the Graham
bill is the cost. It is not going to get better as drugs become more
expensive and more and more baby boomers retire. I remind my
colleagues, our Government is in a Federal deficit. Figures from last
week reveal that the Federal deficit could be as high as $150 billion
for fiscal year 2002. Passing a bill that I believe could cost well
over $600 billion over 10 years is going to increase our deficit. That
is, in my opinion, a step in the wrong direction.
The new Graham bill is still a one-size-fits-all bill that very well
could lead to having the Federal Government set drug prices, although I
know that is not the intention of my dear friend and colleague from
Florida. That is, in my opinion, the wrong direction, as well. And why
on earth should the Federal Government be making coverage decisions for
seniors? I trust senior citizens to make their own decisions about
their health coverage. Apparently, the authors of the Daschle-Graham-
Miller bill do not agree and that is why they continue to put the
Government in charge.
I look forward to the debate on Monday where we can discuss these
issues more fully. If I am wrong on some of these suggested
interpretations of my friend's bill, I would like him to set me
straight on Monday when we debate this bill even further. I would like
to know why anybody believes a sunset is necessary. That means the drug
benefit ends. I hope we will have a CBO cost estimate we may review
regarding the Graham legislation.
Again, I wish to point out that I continue to be concerned that under
both versions of the Daschle-Graham legislation, the drug benefit is
run by the Federal Government. I don't think that is a good idea, to
let the Government run a drug benefit because the Government will end
up setting prices for drugs. Keep in mind, Canada sets prices for
drugs, and where is their pharmaceutical industry today? They have to
look to us because we do not set prices for drugs and we have a
competitive
[[Page S7024]]
system. Yes, some say it has flaws, but it is the best in the world,
bar none. Frankly, with whatever flaws there are, we should be very
proud of the system we have in our country.
In the tripartisan Medicare drug bill, we allow Medicare
beneficiaries to make choices for themselves. They decide whether or
not they want drug coverage. As I mentioned earlier, we allow Medicare
beneficiaries to choose from at least two drug plans, and it maybe
more, but at least two, competing plans, allowing them to select a plan
that best suits their own personal needs.
Another difference between the Daschle-Graham bill and our
Tripartisan bill is that we include reforms to the Medicare program and
they do not. The current Medicare benefit package was established in
1965. While the benefits package has been modified occasionally, it now
differs significantly from the benefits offered to those in private
health plans. Our plan gives seniors a choice in their Medicare
coverage seniors may remain in traditional Medicare or they may opt for
the enhanced Medicare fee for service option which is similar to
private health insurance. We do not force seniors to enter into the new
enhanced fee for service plan. It is just an option. If beneficiaries
want to stay in traditional Medicare that is fine.
We need to give seniors choices concerning their health care
coverage. Seniors must be given improved health care choices through
the Medicare program. It is extremely unfortunate that the Daschle-
Graham-Miller bill does not recognize that the Medicare program needs
to be improved so seniors can take advantage of the benefits that are
offered by private health insurance. Keep in mind, our bill only costs
$370 billion as scored by the Congressional Budget Office. Yet we still
reform Medicare in addition to providing high quality prescription
drugs to our people. There is nothing in the Daschle-Graham-Miller bill
to improve the Medicare program. It just tacks on a prescription drug
program and ignores the larger problem. Medicare beneficiaries deserve
better.
Senator Breaux deserves an awful lot of credit for our bill in this
area. He has wanted to reform Medicare for a long time and has come
close from time to time. This is the best opportunity to do it. I think
he sees the value of what we have tried to do. He not only sees it, he
helped implement it.
The larger problem is the overall Medicare benefits package which is
outdated, inefficient and it does not provide seniors with decent
health care options. Let me give you an example. Today, Medicare
beneficiaries do not have any serious illness protection. Beneficiaries
who are seriously ill end up paying a lot of money out of pocket for
their health care coverage each year. In our Tripartisan legislation,
if a beneficiary is covered under the new enhanced fee for service
program, once that beneficiary reaches a catastrophic limit of $6000,
the Medicare program pays 100 percent of any costs incurred by the
Medicare beneficiary. I feel that is only fair. Those Medicare
beneficiaries with serious health conditions should be offered a choice
in benefit coverage so if they want serious, illness protection, they
may have it. The Graham-Daschle-Miller bill does nothing to assist
Medicare beneficiaries in these types of situations. The Daschle-
Graham-Miller bill's answer is to provide seniors with a government-run
prescription drug benefit that is extremely expensive, and, isn't
even permanent. That just is not enough.
These issues that I have raised about the Daschle-Graham-Miller
should have been debated by the Finance Committee. I admit the issues
we have raised by the Tripartisan bill should have been debated by the
Finance Committee. Who knows, maybe we could have come to some
resolution. Maybe the authors of the Tripartisan bill and the Daschle-
Graham-Miller bill could have come to some agreement through the
Committee mark-up process. Maybe not. Sadly, we will never know because
the majority leader wouldn't even give us an opportunity to mark-up a
prescription drug bill in the Finance Committee.
I have been here for 26 years and, trust me, it is rare for the full
Senate to be considering such an important bill before it is even
considered by the Committee of jurisdiction. I am bitterly disappointed
at how much the Senate has changed.
At the beginning of the 107th Congress, we all talked about working
together in a bipartisan spirit because that is truly what the American
people want from us. What happened to that bipartisan spirit? Why are
we on the floor debating a bill that will affect the lives of over 33
million Medicare beneficiaries and millions of future beneficiaries
without a Finance Committee mark-up? I just do not understand why
members of the Finance Committee were not even given that opportunity
and, in fact, completely excluded from the process, other than that we
can file whatever bill we want to, which we have done.
I want to do everything I can to pass a Medicare prescription drug
bill into law this year. But it appears that election year politics are
more important than passing a well-thought out prescription drug bill
which is extremely unfortunate.
I stand ready to work with my colleagues so that we can provide
affordable prescription drug coverage to our Medicare beneficiaries
this year. We need to have Medicare available for today's seniors, our
children and our grandchildren. So let's stop playing politics and
start working on getting a Medicare prescription drug bill signed into
law this year. I have no doubt if the distinguished Senator from
Florida and I could sit down together we could just work it out--I have
no doubt about that. Unfortunately, it has gotten embroiled in some
political aspects.
Again, I call attention to the tripartisan bill which has Democrats,
Republicans, and the sole Independent. I believe that bill literally
could provide an affordable drug benefit for Medicare beneficiaries,
although it is still expensive. It could do what we really need to have
done--not only on the prescription drug benefit aspect of this matter
but also on the Medicare reform as well--and Medicare+Choice as well.
To me, that is very important.
I look forward to working with my colleague from Florida and others
on the floor and hope we can come to a resolution this year, so the
millions of American citizens will have the benefits that we really
should be delivering to them and which they need and which are right
and just.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Florida.
Mr. GRAHAM. Mr. President, as I indicated, I restricted myself this
evening to discussing the essence of our proposal and what I think are
the six principles against which every proposal should be evaluated. I
defer until Monday a close evaluation of the legislation that has been
introduced by our good friend from Utah and others. One of the things I
do not want to do is to create a poisoned environment which will make
it difficult, if not impossible, to do what I think seniors want, which
is to arrive at a reasonable compromise that will provide them with a
prescription drug benefit.
They have heard us too many times, as candidates, place in their
living rooms on their television screens ads that pronounce our
commitment to a prescription drug benefit for senior Americans.
Now is the time to deliver. I recognize that in a democracy that
means we have to have at least a majority, and probably under the rules
of the Senate not just a majority but three out of every five Senators
be prepared to vote for a single piece of legislation.
Therefore, I reach my hand out across the aisle to two of my favorite
colleagues, the Senator from Utah, who is now being joined by the
Senator from Iowa, with whom I worked on many issues in the past, to
say we look forward to engaging in that compromise.
I do want to have printed in the Record, and I ask unanimous consent
to do so, the CBO estimate of our bill.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Democratic Drug Bill--Preliminary CBO Estimates
[In billions of dollars]
Full Score (2005-12)
Gross estimate......................................................594
Score with % drug reduction from GAAP \1\.........................584
Score with Federal GAAP savings \2\...............................576
Score with Contingency (2005-10)
Gross estimate......................................................421
[[Page S7025]]
Score with % drug reduction from GAAP \1\.........................415
Score with Federal GAAP savings \2\...............................407
\1\ CBO estimate of Democratic drug bill assuming lower drug prices for
Medicare beneficiaries that would result from enactment of the GAAP
bill (S. 812).
\2\ Estimate of Democratic drug bill assuming lower drug prices for
Medicare beneficiaries that would result from enactment of the GAAP
bill (S. 812) and savings from lower costs associated with prescription
drugs that the government current pays for under the Medicaid,
veterans, and other programs.
Mr. GRAHAM. Mr. President, the estimate of our bill is that, in
conjunction with the underlying generic drug bill, if that passes and
makes generic drugs more available, our bill, which would only charge a
$10 copayment for generic drugs as opposed to a $40 copayment for brand
name drugs--our bill would have a cost over the next 8 years of $407
billion--not $600 billion, or $800 billion, or, as some have even said,
$1 trillion--and over the next 10 years would have a cost of $576
billion.
I might point out that this is the same program for 8 years that will
cost $407 billion, and for 10 years will cost $576 billion.
That differential is a reflection of how significant two factors are:
One, inflation of prescription drug costs; and, second, the change in
the demographics of Medicare beneficiaries.
I happened to have been born in 1936. I was 65 years old on November
9 of last year. I belong to the second lowest birth rate year in the
20th century. Only 1933 had a lower birth rate than 1936. Therefore,
there are not very many people my age. We are not putting a particular
demand on Medicare or on the Social Security Program. But, in 10 years,
it will be the people who were born in 1946--not 1936--which was the
beginning of one of the greatest demographic revolutions in America
history.
We are going to begin to feel the impact of that revolution at the
outer years of the 10 years. We are now calculating the cost of this
program. It is my judgment that it is critically important that we now
get started on this prescription drug benefit so that we can learn as
much as we possibly can about what the implications are of delivery
systems, of methods of providing benefits, and how to attract healthy,
older citizens to participate in a prescription drug benefit--all the
things that will be critical to the long-term stability of a
prescription drug benefit. We need to start that process today when the
demand is relatively low--not 5 or 10 years from now when the demand
will begin to rapidly escalate.
We have before us two different visions of how to get to the same
destination. The Senator from Utah has outlined a number of issues of
concern to him. I look forward to having a full debate on Monday.
Hopefully, we can frame each one of these issues, such as the relative
benefits of using the Medicare system as a means of delivering
prescription drugs, or delivering it through subsidized private
insurance policies--the relative benefits of having what I call a
``defined benefit plan'' where seniors would know what they are buying
as opposed to a defined contribution plan where there would not be that
assurance.
Those are all legitimate issues for us to debate.
I suggest to my colleagues that they might take the time over the
weekend to read the letters of endorsement from groups such as the
AARP, which clearly has no interest other than representing the best
interests of their millions of members--most of whom are part of this
39 million Americans who are Medicare participants because they are
over the age of 65. There is no reason to suspect their motives, or
that they have some hidden agenda other than what they think is in the
interest of senior Americans.
I recommend reading their rationale for reaching the conclusion of
their support for our proposal.
I conclude tonight with a sense of optimism. We have gotten further
this week than we have gotten in a decade in terms of closure on
providing our older Americans with a key but missing part of their
health care coverage; that is, assistance with their prescription drug
costs.
I hope next week we can complete this by the passage of a
prescription drug bill recognizing that we have to negotiate with the
House, and then secure final passage, and hopefully gather in the Rose
Garden where I suspect that the President will, with great enthusiasm,
be there to sign this bill into law and provide what America's older
citizens have so long sought, an affordable, comprehensive, and
universally available prescription drug benefit.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I am surely glad that this debate has
begun. It is too bad we could not have started the debate on this bill
on Monday or Tuesday of this week when the majority leader led us to
believe that we would be doing nothing but prescription drugs until we
got it done.
I am glad that we now have Senator Graham's alternative before us.
I thank Senator Hatch, who took the position as manager, while I was
on the CNN program just a few minutes ago, to introduce the tripartisan
bill on my behalf. That bill is a comprehensive prescription drug bill
that represents a year of hard work by dedicated members of the Finance
Committee, the committee that has jurisdiction over Medicare.
We have Senator Graham's bill that you have heard about tonight. Then
we have this tripartisan bill. People wonder what the term
``tripartisan'' means. It means three Republicans, one Democrat, and
one Independent in the Senate, but it also implies bipartisanship, or
across-party cooperation that must be done to get any bill passed in
the Senate.
Our legislation is called the 21st Century Medicare Act. It makes
essential improvements to Medicare by adding the comprehensive
prescription drug benefits, and a new Medicare fee-for-service option
to the 1965 program. These are all first improvements in Medicare since
it was introduced in 1965.
As I indicated to you, I have been honored to work with a top-notch
group of Senators on this bill. That tripartisan group is Olympia
Snowe, a Republican; John Breaux, a Democrat; Jim Jeffords, an
Independent; and Orrin Hatch, a Republican. The group has dedicated
countless hours to this effort.
I must express my disappointment that the Senate Finance Committee
has not had an opportunity to consider legislation as part of the
committee process. I trust that Senator Graham of Florida will feel the
same way. However, the bottom line is America's seniors have waited too
long--and too long already--for Medicare prescription drug coverage.
The House has acted in their fashion. The Senate must act as well. We
cannot afford to waste a single day.
I look forward to debating this important issue over the next few
days and hope that the same bipartisan spirit of cooperation and
compromise that guided the tripartisan group over the last year to
write this bill will guide all Senators in this Chamber to an agreement
that will give long overdue help to our seniors.
Since the tripartisan bill is now introduced, since we have the
Democrat version, and Senator Graham's bill is introduced, and since
there is some misunderstanding of the differences between the two, I
will take just a little bit of time to go over those. I also will take
just a little bit of time to express some differences between the bill
that passed the House of Representatives because some people have
alluded to that bill as something just exactly like the tripartisan
bill, which it is not.
In regard to differences between Senator Graham's proposal and the
tripartisan proposal that I have offered, the first would be cost.
The sheer magnitude of Federal spending in the Senate Democrat bill--
an amount that is obscured by a sunset provision that kills the benefit
in 2010--threatens Medicare's long-term stability. As such, the Senate
Democrat bill gives seniors temporary help, not a permanent
entitlement.
By contrast, the Congressional Budget Office official estimate
concluded that the tripartisan 21st Century Medicare Act totals $370
billion over 10 years, a figure that guarantees permanent, affordable
drug coverage without breaking the Medicare bank.
There is also the issue of choice that separates the tripartisan plan
from the Democrat plan. The Democrat plan relies on the Government to
pick one standard prescription drug plan for over 40 million seniors
with Medicare. The one-size-fits-all approach means seniors cannot shop
for a prescription drug plan that best suits their needs.
[[Page S7026]]
Under the tripartisan 21st Century Medicare Act, seniors are
guaranteed to have at least two competing prescription drug plans in
their community, even in rural areas, using local pharmacies as well.
Seniors will have the choice of picking plans on the basis of cost,
benefits, and quality. All plans will be required to meet Federal
quality standards and to provide a standard benefit package, or its
actuarial equivalent, including a $3,700 cap on out-of-pocket drug
expenses for seniors.
There is a difference in drug pricing. Because the Democrat plan is
overly bureaucratic and excessively generous, that plan does nothing to
curtail or even slow skyrocketing prescription drug costs. That is why
it is essential that any new prescription drug benefit contain cost
management controls that moderate growth in price.
While guaranteeing a comprehensive drug coverage for all citizens,
the tripartisan 21st Century Medicare Act imposes reasonable cost-
sharing obligations on beneficiaries and promotes competition among
prescription drug plans. And with competition being promoted in the
bill, that then leads to a better overall effect on drug prices. And
that, again, is according to the nonpartisan Congressional Budget
Office that does policy analysis and scoring for the Senate.
The other issue is affordability, affordability for seniors. Under
the Senate Democrat plan, seniors face fixed copayment amounts that, in
many instances, mean they will actually pay more for many of the most
commonly prescribed drugs than they would under a system that gives
prescription drug plans more flexibility to offer lower cost
copayments.
That flexibility is a feature of the tripartisan 21st Century
Medicare Act because it gives plans the freedom to offer copayments and
deductibles that save seniors more money. Moreover, the tripartisan
proposal has a lower average premium than the Democrat plan, and that
would be $24. Again, this is according to a Congressional Budget Office
estimate.
We have Medicare enhancements in the tripartisan bill that the Senate
Democrat plan does not have because that plan leaves current Medicare
as it is and simply dumps a massive entitlement expansion, which would
be the prescription drug plan, into the old 1965 model.
The tripartisan 21st Century Medicare Act takes long overdue steps to
strengthen and improve Medicare's basic benefit package. In addition to
adding prescription drug coverage, the bill offers seniors a new
enhanced option, including catastrophic protection and free--let me
emphasize, free--preventive care; in other words, adopting the
principle that an ounce of prevention is worth a pound of cure.
This entire enhanced option is voluntary. If seniors like what they
have had since 1965, they do not have to sweat it. They do not have to
do it. They can keep what they have. Even 50 years from now they will
still have that same choice, but they can also have the enhanced
coverage as well. So it is voluntary. And Medicare, as we know it
today, will always remain available to seniors who prefer to keep what
they have, if they like it.
Improvements are made to yet another coverage option. That coverage
option exists today. Medicare+Choice plans are also included.
Beneficiaries need not elect the enhanced option in order to have
access to the drug benefit plan.
I will finish, then, with a short description of why what the House
of Representatives passed has nothing to do with the tripartisan plan.
The tripartisan plan was adopted on principles and pricing and costs,
the way the five of us decided to do it. For instance, the House bill
has a higher average premium. This is according to the CBO estimate.
The average premium under the House bill is $34 per month. The average
premium under the tripartisan 21st Century Medicare Act is
substantially more affordable, at just $24 per month.
We have a much better benefit. The House bill limits the initial
prescription drug benefit to $2,000 before exposing seniors to a gap in
coverage. The tripartisan 21st Century Medicare Act basic drug benefit
is better and is richer than that in the House bill. Seniors will have
drug coverage under the tripartisan plan worth 50 percent of their drug
spending up to $3,450 after the deductible is met, and that is $1,450
more than what the House bill offers, even in its initial benefit.
We have greater protection for low-income seniors in this Senate
version. The tripartisan 21st Century Medicare Act steps in to give
more help to low-income seniors where the House bill does not. It
provides full assistance with premiums and substantial assistance with
cost sharing for seniors below 135 percent of poverty with no gaps in
coverage. For seniors between 135 percent and 150 percent of poverty,
assistance with premiums and cost sharing is provided on a sliding
scale, also with no gaps in coverage. This critical additional coverage
for our most vulnerable seniors is an important distinction that
reflects the tripartisan commitment to universal, affordable drug
coverage for all.
And then, lastly, I will speak about our enhanced option to which I
have already referred. The House bill leaves the 1960s-style Medicare
largely as it is today. It does provide $30 billion in additional funds
to Medicare providers, but it does little to strengthen or improve
Medicare's basic benefit package.
Rather than addressing provider payment issues, the tripartisan 21st
Century Medicare Act addresses Medicare's benefit flaws. It offers
seniors a voluntary enhanced option, including catastrophic protection,
free preventive care, and better Medigap plans.
The new option would be offered alongside current fee-for-service
Medicare and a strengthened Medicare+Choice. Seniors can keep what they
have if they like it or choose the new option. In all three settings,
access to affordable prescription drug coverage would be guaranteed.
I just mention the difference, that the House bill does not have a
new and improved and modernized Medicare option that we have in the
tripartisan bill.
(Mr. Jeffords assumed the Chair.)
Mr. GRASSLEY. Since the distinguished Senator from Vermont has now
come to the chair to be the Presiding Officer of the Senate, it gives
me an opportunity to say that this provision in the tripartisan bill,
of improving Medicare, bringing Medicare from a 1965 model to a 21st
century model, improving it beyond the prescription drug provisions,
was very much a concern of the Senator from Vermont, the Independent
member of the Senate, Mr. Jeffords. I thank him very much for his
contribution to that.
It really has probably done as much for Medicare as the prescription
drug provisions will, as we look to the day when we have baby boomers
going into transition from their employer's health plans to Medicare.
There will be a smooth transition if they choose the enhanced option;
whereas all the other plans, including the Republican plan in the House
of Representatives, including even the President's plan, Medicare will
still be a 1965 model. And for baby boomers going from their modernized
employer's health plan to the 1965 model of Medicare, if that is the
only choice they had, it would not be a very good day for those baby
boomers going into retirement.
It has been such a pleasure to work with Senator Jeffords on this
whole package, but most importantly, to have his leadership on this
part that deals with the enhanced option, the new and improved and
strengthened Medicare.
Mr. KENNEDY. Mr. President, I ask unanimous consent to have printed
in the Record this letter to Mr. Carl Feldbaum of the Biotechnology
Industry Organization.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
U.S. Senate,
Washington, DC, July 18, 2002.
Mr. Carl B. Feldbaum,
President, Biotechnology Industry Organization, Washington,
DC.
Dear Mr. Feldbaum: I was surprised to receive you letter of
July 15, 2002, opposing S. 812. The Greater Access to
Affordable Pharmaceuticals Act (the GAAP Act or Schumer-
McCain). The record is abundantly clear that the
pharmaceutical industry is exploiting loopholes in our Hatch-
Waxman drug patent laws to block less costly generic drugs
from coming to market. As our hearings revealed, these
actions hurt millions of American patients who are burdened
with rising health care costs.
The exciting new cures brought forward each day by
America's biotech companies are paving the way for what I
believe is the new
[[Page S7027]]
century of the life sciences, and I remain a proud champion
of the biotechnology industry in Massachusetts and across the
nation. It is important, therefore, as an industry concerned
about the health of all Americans, for BIO to acknowledge the
harm to American patients and consumers caused by today's
Hatch-Waxman abuses. Clearly, collusive agreements between
brand-name companies and generic companies to block cheaper
generic drugs from coming to market do not serve the public
interest. Similarly, patients are harmed when generic drugs
are stymied year after year by unfounded patent evergreening
for brand name drugs. I would strongly encourage BIO to be
part of the solution to these challenges.
The Schumer-McCain legislation addresses these abuses and
restores the balance intended under the Drug Price
Competition and Patent Term Restoration Act of 1984 (the
Hatch-Waxman Act). As your letter expresses concerns about
the legislation, this letter describes in further detail the
Committee's intent in addressing them,. The issues you raised
include incorrectly listed patents or patent information with
the Food and Drug Administration (FDA), use of patents to
trigger multiple thirty month stays that delay effective
approval of generic drugs, collusive agreements between brand
and generic pharmaceutical companies to block subsequent
generic applicants from gaining effective approval of their
drug products and litigation attacking FDA's bioequivalence
regulations that have delayed entry of generic versions of
drugs.
the 45 day period to assert patent rights
You express concern that a patent owner's rights will be
forfeited under Schumer-McCain. I want to reassure BIO that
this is not the case.
Section 4 of Schumer-McCain says that a patent owner that
does not sue within 45 days of receiving notice that a
generic drug applicant has challenged its patent will be
barred from suing that generic drug later.
This provision provides the patent owner with the
opportunity to protect its patent rights. It also clarifies
those rights in relation to the generic drug product at issue
if the patent is not defended, thereby enabling the generic
drug product to be marketed immediately. The 45 day period
may be thought of as a statute of limitations, and Congress
has plenary authority to establish statutes of limitations
for federally created rights such as patents. In addition,
comparable periods of time for claiming or defending property
rights have been upheld by the Supreme Court.
This provision does not eliminate the patent owner's rights
against the generic drug applicant and its generic drug
product. Rather, it specifies the time within which the
patent owner must assert those rights against that applicant
and its drug product.
I cannot overemphasize that the bar on enforcing the patent
right under this 45 day rule applies only to the particular
generic product of the particular generic company that has
challenged the patent in its generic drug application. It
does not affect the ability of the patent owner to enforce
its rights with respect to any other generic company, or with
respect to a licensee who strays beyond the bounds of a
licensing agreement under which the patent owner has licensed
use of the patent.
That being said, I also point out that the bar does protect
downstream distributors of the particular generic drug
product, such as wholesalers and pharmacies, as well as
doctors and patients who will use the generic drug product
for treatment.
enforcement of the patent listing requirement
Seciton 3 of Schumer-McCain says that a patent owner cannot
enforce its patent against a generic drug company, or a
person who manufactures, develops, uses, offsets to sell, or
sells a generic drug, if the patent owner has failed to list
the patent information at FDA. This provision provides an
effective enforcement tool for a current requirement.
Drug companies are required currently to list patents at
FDA, and I am not aware of any complaints about this
requirement from the brand pharmaceutical industry. We
understand that now companies generally comply with this
requirement because patents can trigger 30 month stays of the
effective approval of generic drugs.
As you know, however, Section 4 of Schumer-McCain limits 30
month stays to one per generic application, and on only
certain patents. The Committee's concern was that limiting 30
month stays in this way reduces the incentive to list
patents. We therefore concluded that we needed to provide an
effective incentive for compliance with the current
requirement to list patents at FDA. Otherwise, we were
concerned about increased abuses of the listing requirement.
Currently, under section 505(e)(4) of the Federal Food,
Drug, and Cosmetic Act (the FFDCA), FDA can withdraw a drug
from the market if the patent information is not filed after
the agency gives written notice of failure to file the
information. FDA has never used this enforcement tool, and it
would not withdraw a drug from the market for this reason
when the drug presumptively is being used safely for
treatment of patients by health care providers. I believe
that Section 3 of Schumer-McCain provides effective
enforcement of the FDA listing requirement.
Your letter raises the real concern about situations in
which a patent is not listed, or the information is
incorrect, because of an oversight or a clerical error. But
Schumer-McCain addresses this problem as well.
Section 3 of Schumer-McCain allows FDA to extend the date
for listing patents if there are extraordinary or unusual
circumstances. An honest administrative or clerical error is
clearly such a circumstance. Because FDA publishes patent
information immediately upon receipt, the drug company and
the patent owner can promptly check that patent information
is published and that it is correct. If there is an error, or
a patent was not listed, the error can be spotted quickly and
immediately corrected. Accordingly, Schumer-McCain allows
patent owners to avoid the consequences of the inadvertent
failure to list a patent with the FDA.
the cause of action to delist or correct a patent
Your letter also raised questions about the cause of action
in Section 3 of Schumer-McCain to delist patents from FDA's
Orange Book or to correct patent information. In particular,
BIO is concerned that generic companies will bring these
cases unnecessarily, to harass a drug company or patent
owner. I do not believe that this will be the case.
A generic drug company must certify to the patents listed
on a drug when it files a generic drug application. A generic
company must do so even if it intends to seek the correction
or delisting of a patent.
If a generic wants to delist a patent or correct
information, it will likely chose to make a paragraph III
certification to the patent, saying that the applicant does
not contest the patent and requesting that its drug approval
be made effective when the patent expires. The generic
applicant will then sue to have the patent delisted or
corrected.
If it wins, the patent is delisted, or the patent
information is corrected so that the generic applicant may
make a statement that the applicant is not seeking approval
for a use claimed in the patent. In either case, no
certification is necessary and the paragraph III
certification essentially goes away.
Should the generic applicant lose a delisting case,
however, it will have to recertify and challenge the patent
under paragraph IV. This could trigger a 30 month stay, and
at a minimum would delay the resolution of the patent issues
involved. It is therefore my view that there are strong
incentives for generic applicants to bring these delisting
cases only when there is strong merit to the case. Because
this is the case, it is difficult to argue that delisting
cases will be either unnecessary or harassing.
To the contrary, in such cases, the delisting of a patent,
or correction of patent information, serves a public good.
This is because a patent to which other generic drugs would
otherwise have to certify is instead either delisted or
corrected so that no certification is necessary. In such
cases, generic drugs may get more quickly to market, to the
great benefit of consumers.
bioequivalence
BIO requests that section 7 of Schumer-McCain be stricken
in its entirety. I do not believe this provision raises the
concerns that BIO thinks it does.
Section 7 allows FDA to amend its regulations, but it does
not say that those amended regulations are legitimate
exercises of authorities under the FFDCA. Only the current
regulations are identified as continuing in effect as an
exercise of authority under the FFDCA. Should FDA ever amend
its bioequivalence regulations, they would be subject to
judicial review under the Administrative Procedure Act.
Indeed, earlier drafts of section 7(a) covered the FDA's
current regulations and successor regulations. But we did not
intend to protect amended regulations from judicial review,
so the language on successor regulations was removed.
Also, under section 7(a), the application of the current
regulations in any particular case would be legitimate issues
for judicial review under the Administrative Procedure Act.
So FDA can be challenged if its application of those
regulations will pose potential risks to patients or to
public health.
Finally, BIO believes that section 7(c) is inadequate. This
language, which we added in part in response to concerns from
BIO, says that section 7 shall not be construed to alter the
authority of the Secretary of Health and Human Services to
regulate biological products under the Federal Food, Drug,
and Cosmetic Act. Any such authority shall be exercised under
that Act as in effect on the day before the date of enactment
of this Act.
This language is very similar to a statement that Senator
Jeffords and I made on December 3, 1997, in a letter to
Michael Friedman, then Lead Deputy Commissioner at FDA. It
makes it clear that we are not changing FDA's authority under
the FFDCA over biological products--in particular that we are
not making changes to newly authorize the approval of generic
biologics under the FFDCA. That was good enough in 1997 and
should be good enough today.
I remain committed to the reforms of the Hatch-Waxman Act
provided for in Schumer-McCain, just as I remain committed to
a strong and vibrant biotechnology industry, both in
Massachusetts and throughout the nation. I believe that the
adjustments to the Hatch-Waxman Act found in Schumer-McCain
correct imbalances in and will stop abuses of the generic
drug approval process that have arisen in recent years. I do
not believe that these reforms will adversely impact in any
way a company or patent owner
[[Page S7028]]
that diligently sees to its legal rights and obligations
under Federal law.
I hope that this letter addresses your concerns, and I
remain willing to work closely with my many friends in the
biotechnology industry in Massachusetts and elsewhere as this
legislation moves forward.
Sincerely,
Edward M. Kennedy.
Mr. REID. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________