[Congressional Record Volume 149, Number 91 (Thursday, June 19, 2003)]
[Senate]
[Pages S8169-S8201]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 1, which the clerk will report.
  The legislative clerk read as follows:

       A bill (S. 1) to amend title XVIII of the Social Security 
     Act to make improvements in the Medicare Program, to provide 
     prescription drug coverage under the Medicare Program, and 
     for other purposes.

  Pending:

       Enzi/Reed Amendment No. 932, to improve disclosure 
     requirements and to increase beneficiary choices.
       Bingaman Amendment No. 933, to eliminate the application of 
     an asset test for purposes of eligibility for premium and 
     cost-sharing subsidies for low-income beneficiaries.

  The PRESIDING OFFICER. The Senator from Maine.


                           Amendment No. 933

  Ms. SNOWE. Madam President, I rise to address the pending Bingaman 
amendment because I believe it is important to provide some of the 
background as to how we arrived at the asset test that is included in 
the pending bill before the Senate regarding prescription drug coverage 
and the overall Medicare Program.
  We learned a lot, as I said initially, from the debate and the 
tripartisan plan we had offered last year. We had included an asset 
test. That asset test did present a number of problems to colleagues on 
the other side of the political aisle. We attempted to work it out, but 
obviously it was not to their satisfaction. We had a number of meetings 
during the course of the debate last fall on the pending legislation, 
but we were not able to resolve the differences.
  One of the key contentious issues was the fact that we had an asset 
test they believed was too encompassing, that it would deny many low-
income individuals the ability to have access to the overall drug 
coverage and the type of subsidy we had included. So we learned from 
that debate, we learned from the discussions, and we took a far 
different approach this time in this legislation to incorporate the 
lessons that had been learned in developing an asset test.
  We understand Senator Bingaman's desire to do more for low-income 
beneficiaries, but we have to keep in mind that we have crafted the 
legislation within the $400 billion parameter included in the budget 
resolution. We have come a long way in terms of how much we are 
providing for a prescription drug benefit. Can we do more? Absolutely. 
But obviously we have to live within the confines of our ability to 
finance this and so many other obligations.
  Just 5 years ago we started at $28 billion with then-President 
Clinton's proposal. We increased it to $40 billion, to $300 billion, to 
$370 billion. Now we are up to $400 billion as proposed by President 
Bush. That is almost $200 billion more than he had originally proposed 
last year. We have come a long way in this debate.
  How do we design the best, most effective, fairest low-income subsidy 
assistance? We decided it would be important to provide a universal 
benefit in the Medicare Program when it came to prescription drug 
coverage. But also we wanted to ensure that we targeted those who were 
most in need. That was one of the other principles that was so 
essential in developing the program. That is why we decided to use 
various low-income Medicare and Medicaid beneficiary programs that are 
already enacted and have been part of law, consistent across the board 
with respect to formulas, and have been used by senior citizens so it 
is something familiar to them.
  We used the qualified Medicare beneficiaries program, otherwise known 
as QMBs, the select low-income immediate beneficiaries, SLIMBs, and 
qualified individuals, the QI-1 program, to send the highest level of 
assistance with cost premiums, deductibles, and copayments to those 
most in need. As it exists in current law, we target the assistance to 
beneficiaries based on both their income and asset level to make sure 
we are capturing those who truly have the most need.
  We drop the asset test that was included in the previous tripartisan 
legislation that would have prevented 40 percent of low-income 
beneficiaries from receiving coverage. We really address some of the 
inequities and the problems with our previous asset test by including, 
this time, in this legislation, programs that have already worked for 
seniors who have a very limited asset test.

  For those in the lowest income categories, we are talking $2,000 for 
individuals, $3,000 for couples. For those from 73 percent to 100 
percent, we are talking about asset tests between $4,000 for 
individuals and $6,000 for couples. The same is true for those between 
100 and 135 percent of the poverty level; then for those between 135 
percent and 160 percent of poverty level, assets again at $4,000 and 
$6,000 for a couple.
  We think that by establishing consistency with other programs that 
have worked, we are able to design a fairer approach to the issue in 
terms of eligibility for the low-income subsidy. Also, we are utilizing 
existing government infrastructure so that we do not divert scarce 
dollars away from beneficiaries to create new Federal or State 
bureaucracies.
  In developing S. 1, we did look to the lessons we learned from last 
summer's debate and the negotiations that progressed into the fall. We 
realized that in constructing the tripartisan plan, we were excluding 
millions of seniors and disabled Americans from eligibility for the 
low-income assistance subsidy because their income or assets did not 
meet the strict guidelines. Obviously, we did that because we were then 
living within the confines of $370 billion.
  So we created the new categories for low-income assistance. It goes 
up to 160 percent of poverty level. Again, that is also a change from 
the tripartisan plan where we put the maximum subsidies up to 150 
percent of poverty level. So we increased it from 150 to 160 percent of 
poverty level. For an individual that means $15,472 and for a couple 
that is $20,881, regardless of an individual's assets. We are not even 
using an asset test for another category below 160 percent of poverty 
level so that we are ensured we are capturing everybody who comes 
within those poverty guidelines in order to ensure they get the maximum 
subsidy possible.
  This new category that we are capturing under the 160 percent and not 
requiring an asset test will include 8.5 million additional Medicare 
beneficiaries in 2006 and provide them with very generous assistance. 
They will not be subject as well to the gap in coverage where they are 
responsible for 100 percent of the cost of the prescription drugs.
  This new benefit only requires a $15 deductible compared to the $275 
for those above 160 percent of poverty. They have a much more generous 
cost sharing starting at 10 percent, from $51 to the benefit cap of 
$4,500; and from $4,500 until they spend $3,700, they pay a 20 percent 
copayment. Once they reach the catastrophic cap, the Government will 
pay 90 percent of the cost.
  We clearly did design a program that provides the most assistance to 
those in most need. I know we always could do more, but obviously we 
had to stay within the parameters of the $400 billion in designing this 
program. There are those on my side of the political aisle who believe 
we have gone too far in providing the types of subsidies we do. But we 
have copayments that obviously do help to reduce utilization and

[[Page S8170]]

overutilization of the benefit. At the same time, we also understand if 
these individuals don't have access to any type of prescription drug 
coverage, then they are going to be denied the ability to have access 
to the most innovative therapies and medications now available to treat 
so many illnesses. If they don't have access to these types of therapy, 
they can become sicker, which then results in hospitalization, and 
then, of course, we have a more expensive form of care that does impose 
additional and exorbitant costs on the Medicare system.
  So I think in the final analysis we are going to see, by the type of 
benefit we have provided to the low-income, that they have the ability 
to have access to a prescription drug benefit so that ultimately we can 
realize savings to the Medicare Program. It is absolutely vital that 
this benefit be available to those individuals most in need.
  It is also vital that we have a universal drug benefit, and that is 
why we designed the program from that standpoint, embracing the 
universal tenet of the Medicare Program. It is important that we do all 
we can to maintain consistency with the basic tenets and principles of 
the Medicare Program.
  Madam President, I believe we have designed a very fair, effective, 
generous assistance to those in the low-income category. As I said, we 
even increased it from the tripartisan bill of last year, from 150 
percent up to 160 percent of poverty level. We essentially removed the 
asset test for those in the categories from 160 percent of income 
levels and below. We have created consistency by using other low-income 
programs in the Medicaid and Medicare areas that will not result in any 
confusion or contradictions among different eligibility standards. So 
we have really made considerable progress in designing, I think, the 
best, most effective type of program.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Madam President, I see the Senator from Missouri in the 
Chamber. He wants to speak next. For the information of all Senators, I 
think we are going to get an amendment offered on the floor shortly. 
But the sponsor of the amendment has only a very short time that he can 
be in the Chamber. I urge my friend from Missouri to remember that 
brevity is the soul of not only wit but sometimes persuasion.
  The PRESIDING OFFICER. The Senator from Missouri is recognized.
  Mr. TALENT. Madam President, I appreciate the Senator's comments. I 
remind him that I have only recently come over from the House and am 
used to speaking in 3-, 4-, and 5-minute bites where necessary. I will 
try to adhere to the old standard. I know many people want to speak on 
this important bill. Many have important amendments they want to offer. 
I will not delay the Senate very long.
  I wanted to come down and speak about this, in part, because this is 
a problem which has existed for a long time and has hurt a lot of 
people, and which I am just very encouraged and pleased to say I 
believe this Congress will finally solve.
  I went into the House of Representatives in 1992 and, as many Members 
do, I often went to parades in the communities I represented. I enjoyed 
walking in them and shaking hands with folks. There was one couple with 
whom I got to shake hands virtually every parade in the city of 
Hazelwood. They would sit in the garage watching the parade. I would 
run up the driveway and visit with them. Every year, we would visit 
about this issue. They would take a minute--not too long because the 
parade was going by--and tell me of the struggles they were going 
through because there was no prescription drug feature to their 
Medicare coverage. They were making the choice that many senior 
citizens in the State of Missouri have to make every day between the 
cost of their prescription drugs and the cost of other necessities of 
life.
  That choice hurts all of us. It hurts them, hurts their families who 
worry about them, and it hurts all of us because they often resolve 
that dilemma against buying the prescription drugs. Those drugs are 
often medicine they need to stay healthy. It is one of the things that 
is so self-defeating about our current policy because if folks cannot 
take the drugs they need, they get sick, and then Medicare covers the 
treatment and it costs a lot more than if we had simply helped them 
stay healthy in the first place.
  We should not interpret any of this as a slap at Medicare. Medicare 
is a program which has provided important medical care for tens of 
millions of people for a generation. But it was devised in 1965 when 
nobody had prescription drug coverage. Prescription drugs were not a 
major feature of ongoing medical care in those days. Since then, it has 
become a very common feature of health insurance to have some kind of 
prescription drug coverage. But we have not updated Medicare to keep 
pace with those changes. We have not strengthened and improved Medicare 
as we should have. But now we are going to. That is the good news.
  That is really the message I wanted to come down here and deliver. To 
me, the legislation is all about the principles and, yes, of course, it 
is about the details, but first you have to try to do the right thing, 
and then you have to check the details to make certain you are trying 
to do the right thing.
  We need coverage that goes into effect, at least partially, right 
away. Seniors have waited long enough. We have been promising long 
enough, and now we need to deliver. We need coverage that is permanent, 
not one that sunsets a few years from now. We need voluntary coverage 
in the sense that you don't have to change your coverage if you have 
another method you like better. This bill qualifies on that count. We 
need coverage that targets the bulk of its relief for the people who 
need it the most. This is something that in townhall meetings all over 
Missouri seniors have said this to me. The folks with the lowest income 
and the highest prescription drug costs should get the most relief. 
This bill makes efforts to achieve that, and I think it largely does.

  We need legislation that has a reasonable system of copays and 
deductibles for those who can afford them because that is the way we 
control overutilization, and overutilization can be bad for everybody. 
If too much money that we don't need to spend has to be spent in the 
prescription drug area, that is less money for care for heart patients 
or kidney patients or maintaining the standards at our teaching 
hospitals, which is so important to the quality of Medicare.
  We need a bill that provides choices for people, one that competes 
for the business of these seniors, to make certain they are getting the 
highest quality at the lowest cost that we are capable of providing.
  There are going to be many amendments offered to this bill. I am 
going to vote for some of them. There is one I believe we will see 
today that will help make certain that local pharmacies are able to 
participate. I think that is a great idea. I will vote for that 
amendment. I will vote against some. Some will undoubtedly carry and 
some will fail.
  It is my intention to vote for this bill on final passage--almost no 
matter what. I don't want to sign a complete blank check here, but I 
cannot imagine changes that would be made to the bill that would keep 
me from voting to send this bill on, to move this process forward, to 
begin keeping the promise we have made over and over and over again in 
the last few years to that generation of Americans who won the Second 
World War, who set up the architecture of containment that won the cold 
war, and built this country by their work, faith, sweat and, effort. 
That is what this bill represents to me.
  I congratulate the Finance Committee, the chairman, and the ranking 
member for producing this bill. It is, at minimum, a noble effort, a 
good first step. I think it is probably better than that, but, at 
minimum, it is that. We cannot get to the end if we don't take the 
first step. That is what this bill represents. I am pleased to be here 
supporting it. I hope we can strengthen and improve the bill as we 
strengthen and improve Medicare, and I am grateful for the opportunity 
to say a few words on the floor.
  I yield the floor at this time.
  Mr. BAUCUS. Madam President, I apologize to my good friend from 
Missouri. It turns out that the Senator who is going to offer the 
amendment is not able to do so at this time.
  Mr. TALENT. Perhaps I should want to do another 30 minutes or so. I 
am

[[Page S8171]]

kidding. I had all the time I needed, and I appreciate the suggestion.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. I thank the Chair. Madam President, I wish to take a few 
minutes to speak about a feature of this prescription drug bill which I 
believe is particularly noteworthy, and that is help for low-income 
seniors.
  The subsidies provided for low-income seniors and disabled people are 
far more generous and much more humanitarian than many of the proposals 
the Senate has considered in the past. We know that most seniors who 
signed up for this new drug program will benefit from assistance with 
their prescription drug costs.
  Many seniors today pay thousands of dollars a year for drugs. That is 
common knowledge, and that is a substantial expense to them. It is to 
everybody, but particularly seniors and particularly low-income 
seniors.
  For 40 percent of our seniors who make less than $15,000 per year, 
the prescription drug coverage provided by this bill will be truly 
lifesaving. That is, 40 percent of our seniors make less than $15,000 a 
year.
  We have all heard stories about poor seniors who eat less so they can 
pay for their prescription drugs or who take only half the dosage the 
doctor recommends. I have seen that. I worked at a drugstore one day. I 
was really quite taken aback by the number of times the elderly would 
walk up to the pharmacist and quietly ask the pharmacist whether they 
could cut back on their prescription because they could not pay for it 
all, and they and the pharmacist would go into a little huddle as to 
which drugs to take and which ones not to take. I have seen it 
firsthand. A lot of us have heard a lot about this. We have heard about 
patients with disabling illnesses who cannot afford the expensive drugs 
that might slow the progression of a dangerous and unpredictable 
disease. It is clear, 40 percent of our seniors are making less than 
$15,000. That has to tell us it is a huge problem we have to address.
  This bill will give some hope to those folks. The bill is an 
improvement, as I mentioned, over last year's bill. Last year, that 
bill gave seniors generous assistance with cost sharing but up to a 
point. Once the low-income senior hit the so-called benefit gap--that 
is the donut we are talking about--the bottom fell out of the low-
income safety net.
  Seniors who could hardly afford food and rent would have to be 
responsible under that bill for half the cost of their drugs, a cost 
that most obviously could not be assumed. By some estimates, 30 percent 
of low-income seniors would fall into this gap.
  In the bill before us, low-income seniors remain much better 
protected in this so-called gap. They pay higher cost sharing in the 
benefit gap, but their out-of-pocket expense would never go more than 
20 percent above the cost of drugs, and for the lowest income seniors 
who are not eligible for full Medicaid benefits, cost sharing would not 
go above 10 percent. I think this is a good improvement.
  I am also proud the chairman of the committee, Senator Grassley, and 
I have been able to increase the number of low-income seniors who will 
benefit from the extra subsidies. Our bill will provide assistance for 
Medicaid beneficiaries up to 160 percent of the Federal poverty level. 
An amendment was offered in committee to raise the poverty level to 
160 percent. I wish it could go higher, but we are somewhat limited by 
the $400 billion we are working with in the entire bill. But at least 
we are up to 160 percent of the Federal poverty level. That means 
beneficiaries with an annual income of barely over $14,000--that is 
because they are not within 160 percent, just slightly over--are still 
struggling to provide for life's basics.

  Perhaps one of the most important improvements in this bill is the 
assistance it provides for low-income seniors without subjecting them 
to assets tests.
  Asset levels for elderly Medicaid beneficiaries and so-called QMBs 
and SLMBs are very low. Those are categories depending upon the 
percentage of poverty, so that if an individual has accountable assets 
of over $4,000, they are not eligible for assistance. A couple with 
assets over $6,000 is not eligible for assistance. These asset levels, 
which are based on SSI eligibility standards, have not been adjusted 
since 1989.
  Asset tests exclude millions of poor Americans from Medicaid, and 
they would have excluded millions of poor seniors from many of last 
year's prescription drug subsidies. Think of it, an 80-year-old man 
with $800 a month in income might not be eligible for any assistance if 
his brother left him, say, a $10,000 car in his will. If he is married 
and he has paid life insurance premiums his whole life, the policy 
could prevent him from getting help with prescription drug benefits.
  This proposal includes a subsidy category that is based only on 
income, not on assets. It is not as generous as the asset-tested 
categories, and I wish we could improve that, but it takes an important 
step toward covering more needy seniors and allowing them the dignity 
of keeping a car or a single precious heirloom.
  We could do more if we had more money, but we do not have more money. 
We could eliminate the asset test altogether. We could provide better 
subsidies in the donut. We could provide more help to people who are 
still in need but who make $15,000 or $18,000 per year and have high 
drug costs.
  Nevertheless, I am proud of the progress we have made over last 
year's low-income proposals, and I suspect with each new chapter in 
this prescription drug/Medicare book, we are going to be able to make 
improvements along the way.
  This bill is a major improvement over current law. It is a major 
improvement over the low-income provisions in last year's bill. I urge 
this body to adopt this proposal.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. Madam President, the ranking member, Senator Baucus, 
raised a number of valid issues as to how we were able to improve upon 
the lessons we learned last year from our debate on this most important 
issue regarding asset tests. That was, obviously, one of the areas we 
had difficulties addressing in a way that would satisfy most of our 
colleagues in the Senate.
  This year, having drawn upon those lessons, we did craft a proposal 
that ultimately maximizes the ability of those low-income individuals 
of participating in this program in the fairest way possible, and that 
is not to exclude those who certainly are in need of this type of 
benefit and certainly are in need of some type of assistance because 
they do have low incomes. Therefore, I think the asset test is a much 
more fairer approach, much more equitable, without excluding those who 
certainly have the need for this type of program.
  We have come a long way in designing a system that, for the most 
part, will satisfy those who had concerns with the previous provision 
in the tripartisan plan.
  In fact, Families USA supported our legislation with respect to this 
provision. I quote from it:

       We congratulate the U.S. Senate for making major 
     improvements in the prescription drug coverage for America's 
     14 million Medicare beneficiaries below 160 percent of 
     poverty.

  They felt it was essential to assist the most vulnerable Medicare 
beneficiaries, and they, obviously, supported our efforts and thought 
we should not take any steps to minimize the improvements that have 
been made in this legislation with respect to the subsidies included in 
the pending legislation.
  I raise another issue I was unable to address yesterday, and that is 
with respect to the Government fallback provision that is included in 
the pending legislation. I know there was an amendment that was offered 
by the Senator from Michigan that would provide for a permanent 
fallback because those who argue we should have a permanent option to 
Government fallback so seniors can choose under the stand-alone 
prescription drug benefit say it will offer more stability and more 
choices to seniors.
  As we worked last year, again drawing upon the lessons with respect 
to a Government fallback, we learned two things. Obviously the 
provision and the way we addressed it in the tripartisan plan was not 
satisfactory. We did have

[[Page S8172]]

language that ensured it guaranteed a seamless approach so seniors 
would not lose their coverage in the event the private delivery 
mechanism did not work to provide the prescription drug benefit, but 
that did not satisfy many of the critics with respect to our 
legislation last fall.
  On the other hand, we saw how much a Government-run program can cost. 
CBO estimated a Government-run program could cost at least $600 
billion, at least based on the bill that had been introduced in the 
Senate, and that we debated with several versions, up to a trillion 
dollars or more. It also sunset in order to mask the true costs because 
again a Government-run system that has no competition, has no choices, 
does not do anything to maximize the efficiency or increase the 
innovative ways in which the private sector could provide those plans.
  When one is competing against a Government-run program that has no 
risk, then the cost goes up. That is at least the way the Congressional 
Budget Office assigned the score to that program. So we had a $600 
billion to $1 trillion cost with a Government-run program, because 
there were no risks involved in that program in implementing that type 
of an approach. It was all performance based, and so therefore it was 
going to be much more costly. Then again, it was sunset. After 7 years, 
the prescription drug benefit under that approach would have been 
sunsetted.
  It also statutorily limited the number of drugs a senior could 
purchase to two in any therapeutic class. So, again, not only did the 
benefit sunset but it also limited the choices available to seniors 
with respect to the types of medications that would be covered under 
that approach because it was too costly, because it was a Government-
run program.
  On the other hand, we understood it was absolutely essential that 
seniors, regardless of where they lived in America, whether it was in a 
rural area or in an urban area, should have the ability to have a 
prescription drug benefit that was of equal value, that was in the bill 
that became law. So we did include a Government fallback provision.
  There were those who felt it did not go far enough or was not 
sufficient to prevent a seamless, uninterrupted approach in terms of 
coverage.
  This year, having drawn upon that experience, we designed a different 
approach, and we included a Government fallback. We think the 
Government fallback should be the last resort, not the first resort. 
So, therefore, there have to be two participating in the program with a 
drug benefit. If that fails, then the Government would step in. If only 
one plan participated, the Government would step in and provide a 
fallback. We think this maximizes the approaches in terms of enhancing 
competition and choices but at the same time ensuring seniors that no 
matter what happens, if private plans do not participate in some part 
of the country, they will always have the assurance and the guarantee 
that they will have access to a prescription drug benefit in the 
coverage without interruption. So therefore we designed a system that 
incorporated the risk management so we can encourage competition among 
the private sector plans. We think that is important.

  We also help give the Secretary the flexibility to dial down the risk 
even to nothing in order to encourage private plans to participate. But 
in the event that does not happen, that we do not get two plans at a 
minimum participating and providing choices to seniors in any part of 
the country in any one of the 10 regions, then certainly the Government 
would step in and provide the fallback plan. Even if there is only one 
private plan that is available, the Government will step in. Again, to 
address concerns on this side of the aisle with respect to the fact 
that we are not doing enough to encourage seniors to go into the 
private delivery model, we do only allow for a 1-year contract for the 
Government fallback, again trying to encourage private plans to 
participate in the process.
  We obviously think if seniors have private plans participating, they 
will have competition and choices that will maximize the number of 
choices for seniors across the board similar to what is available to 
Members of Congress and to Federal employees under the Federal Employee 
Health Benefits Program. There are a maximum number of choices, an 
array of plans, different types of approaches tailored to the needs of 
seniors either in that particular region or in terms of their medical 
and health care needs.
  For example, a private plan could design a generic-only plan or it 
could design a plan that includes the most commonly used drugs for 
medications. So we have hopes that we not only encourage competition 
but at the same time provide a fallback for prescription drug benefits.
  The Secretary has the authority to design that program and negotiate 
the risks for the plans to make the market as appealing as possible and 
is required to make choices among a number of plans, at least three 
plans for each region. However, if at least two plans are not willing 
to provide services in the region, as I said earlier, the Government 
fallback will be triggered. Once triggered, the Government will enter 
into a 1-year contract with a fallback company.
  Further, that leaves one plan that is willing to participate in a 
fallback region. The Secretary may allow that plan to provide coverage 
alongside the Government fallback plan.
  So we think we have maximized the assurances and the security for 
seniors that, irrespective of where they live in America, they will 
have access to a prescription drug benefit. The structure of this 
provision was vital in securing the type of bipartisan support we 
received in the Senate Finance Committee, and tripartisan support with 
the support of Senator Jeffords we were able to achieve in the final 
analysis. It was a 16-to-5 vote in the Senate Finance Committee because 
we were able to incorporate the lessons of the past.
  That is why we designed this type of permanent fallback so that it 
does not undermine the costs of the programs. It invites competition 
but it also provides the assurances to seniors that they will have 
prescription drug benefit regardless of where they live in America, 
regardless of what happens in the private sector. If the private sector 
does not play a role, Government most assuredly will. I think we have 
designed the maximum amount of security and the least amount of risk to 
seniors in terms of the type of coverage they will receive.
  I did want to address some of those issues because I do think it is a 
fundamental component of this legislation before us. There has been a 
lot of confusion about what this legislation is and is not, and I 
assure my colleagues that we do have Government protection but at the 
same time we also do not want to diminish the ability of the private 
sector to play a competitive role. In the event that does not 
transpire, then we obviously will have the availability of a fallback 
provided by Government and the maximum amount of authority vested in 
the Secretary to design that program so it does not jeopardize seniors' 
access to coverage at any point, especially those seniors who live in 
rural areas.
  I yield the floor.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Madam President, if we can get consent, which I will 
offer in a moment, I intend to offer an amendment which would address 
one of the concerns I have with the current bill; that is, the 
uncertainty with regard to the premium itself.
  Under the bill, it is anticipated the monthly premium paid for by 
beneficiaries, the beneficiary obligation, would be $35, but there is 
no guarantee that beneficiary figure of $35 is going to be what our 
beneficiaries are going to pay; it is only an average. The 
Congressional Budget Office that gave the $35 figure cannot state what 
the range will be that will be charged to beneficiaries. It could be 
lower. Most likely, it could be higher. I am told last year the 
Medicare+Choice plans increased by 15.5 percent. That was just last 
year alone. If Medicare+Choice premiums increased by 15.5 percent, 
there is no telling what the figure could be. It could be $40 or $50, 
and I will get into that in a moment.
  Even the so-called Medicare fallback, available when private plans 
choose not to serve a community, provides no guarantee. So you do not 
have any guarantee in the private sector options that will be made 
available. And if those cannot be made available in a region, the 
Medicare fallback does not

[[Page S8173]]

offer any guarantee with regard to what the premium will be either.
  Initially, we were told by the bill's authors that the fallback plan 
would have a uniform premium, but in fact it does not have even a 
uniform premium. So not only do we anticipate that it will not be $35, 
we do not know what it will be. We also know it could be different in 
different areas. We know that Alaska or South Dakota could be forced to 
pay a much higher premium than someplace where price and utilization 
figures could be different; say, Florida. We actually see that right 
now with Medicare+Choice. Medicare+Choice HMOs offer prescription drug 
coverage today. According to a report provided to the Congress 
recently, the premiums in Connecticut, under a Medicare+Choice plan, 
today are $99 per month. That same premium is $16 in Florida.
  So with the experience we have already had in the private sector, the 
Medicare+Choice option, we have seen a dramatic variation in the price 
of the premium for beneficiaries. I fear we are going to see exactly 
the same thing with the private plans offered through this bill as soon 
as the legislation is implemented.
  We have two issues: First, we do not know what the premium will cost 
because we just have an estimated national average; second, even if 
there is a national average, we are concerned that there could be a 
dramatic variation from one part of the country to the other. It is 
that variation, as well as that uncertainty with regard to the premium 
itself, that we are trying to address with the amendment we are 
offering.
  The way the bill is written, I will state what will likely happen. 
There are two terms with which I hope people will become more familiar. 
The first term is the national weighted average premium. That is the 
overall premium cost that must be achieved in order to pay for the 
private sector coverage as well as the Medicare backup when the bill is 
implemented. In other words, the prescription drug companies will 
determine, given what the benefit package is, given the utilization 
rates, given the actuarial tables, it will take so much money, divided 
up per person, to pay for the plan once it is implemented.

  There will be two payments. One will be from the Government and the 
other is from the beneficiary. The second part of this term, the 
beneficiary obligation, is what the senior citizen is going to pay. 
That is the so-called $35. But the overall premium could be $100. In 
fact, we think it might be in the $100 range. So, under that example, 
$65 would be paid by Government, $35 would be paid for in the premium 
by the beneficiary, the beneficiary obligation.
  Assume the average is $100 and assume, then, the payment is over by 
$10. Assume the premium is not $100 but it is $110. Under this bill, 
that $10 extra in the premium is paid all by the beneficiary. That will 
be added to the beneficiary obligation. So instead of a $35 payment, it 
could be $45, a 30 percent increase in the premium the Medicare 
beneficiary will have to pay. That is why there could be a significant 
variation.
  So we have these two calculations: The national weighted average 
premium, which we estimate could be around $100; the beneficiary 
obligation, which is $35, roughly, give or take. And of course, as I 
said, we do not know what it will be like in some parts of the country. 
It could be dramatically different, as we have seen with 
Medicare+Choice right now.


                           Amendment No. 939

  Mr. DASCHLE. I ask unanimous consent that the pending amendments be 
set aside and that this amendment be considered at this time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from South Dakota [Mr. Daschle] proposes an 
     amendment numbered 939.

  Mr. DASCHLE. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To ensure that an affordable plan is available in all areas)

       On page 103, strike lines 10 through 13 and insert the 
     following:
       ``(B) the lesser of--
       ``(i) the amount by which the monthly plan premium approved 
     by the Administrator for the plan exceeds the amount of the 
     monthly national average premium; or
       ``(ii) in the case of an eligible beneficiary who is 
     enrolled in a Medicare Prescription Drug plan that provides 
     standard prescription drug coverage or an actuarially 
     equivalent prescription drug coverage and does not provide 
     additional prescription drug coverage pursuant to section 
     1860D-6(a)(2), an amount equal to 10 percent of the amount of 
     the monthly national average premium.
       On page 77, strike lines 10 through 22 and insert the 
     following:
       ``(A) In general.--In the case of an eligible beneficiary 
     receiving access to qualified prescription drug coverage 
     through enrollment with an entity with a contract under 
     paragraph (1)(B), the monthly beneficiary obligation of such 
     beneficiary for such enrollment shall be an amount equal to 
     the lesser of--
       ``(i) the applicable percent (for the area in which the 
     beneficiary resides, as determined under section 1860D-17(c)) 
     of the monthly national average premium (as computed under 
     section 1860D-15) for the year as adjusted using the 
     geographic adjuster under subparagraph (B); or
       ``(ii) 110 percent of an amount equal to the applicable 
     percent (as determined under section 1860D-17(c) before any 
     adjustment under paragraph (2) of such section) of the 
     monthly national average premium (as computed under section 
     1860D-15 before any adjustment under subsection (b) of such 
     section) for the year.

  Mr. DASCHLE. Madam President, basically what our amendment does is 
simply say: We understand there will be variance. We understand we 
cannot pinpoint with any precision exactly what the cost to the 
beneficiary is going to be. Why don't we put a cap on what that senior 
citizen is going to be required to pay, within some reason. If we say 
the beneficiary obligation is going to be $35 a month, put a 10 percent 
cap on that premium. It can be below to whatever extent. If it comes 
down to $15, we all ought to celebrate. But if it is going to be more 
than $35, say that it cannot exceed 10 percent of the average 
beneficiary obligation.
  This would give some assurance to senior citizens that they are not 
going to be facing dramatically varied costs or facing this 
extraordinary uncertainty with regard to what the premium will be. But 
within a 10 percent range, give or take, they will know what their 
premium obligation will be as they make their decision from one year to 
the next as to what that premium will cost them.
  This is exactly what we do with Medicare Part B. Right now with 
Medicare Part B, beneficiaries pay $58.70 a month for their physician 
and outpatient care. I might add, that is a consistent figure. It is 
the same in Alaska and South Dakota as it is in New York and 
California. That has worked. No one has complained.
  I don't know that any amendment has ever been offered to suggest 
South Dakota ought to pay a different Medicare Part B premium than 
someone else. No one has said that having an actual figure every year 
that seniors can know will be a given cost is something that does not 
work for physicians. If it works for Medicare Part B, if it works for 
physicians and outpatient costs, why wouldn't it work for prescription 
drugs?

  We are actually giving more latitude. We are not saying it has to be 
$35. What we are saying, simply, is let's make sure there is some 
certainty. Even if it cannot be with the same precision--which, 
frankly, I think it could be--but if it cannot be the same precision as 
we expect with Medicare Part B, let's at least say: Give or take 10 
percent, it has to be in that $35 range. I don't think that is too much 
to ask, with all the uncertainty people are facing today as they 
consider this.
  I was just talking on a radio station a few minutes ago, trying to 
explain what a senior would have to pay. The question was, What does 
this mean for a senior?
  Here is what I had to say. I said we think the premium is going to be 
$35. We think the deductible is going to be $275. We think the copay is 
going to be 50/50 between the program and the beneficiary with all the 
charges up to $4,500, and after that we know the benefits are cut off 
until you reach about $5,800, and then it kicks on at a 90-percent 
reimbursement rate at $5,800.
  If I was a 87-year-old citizen listening to the radio, I would say: 
Holy cow, call my accountant. And this is for a drug benefit.

[[Page S8174]]

  But that is what we are doing. We are asking the senior citizen 
somehow to make sense of all this, and then we have to say we don't 
even know if two companies are going to come into your region to 
provide the benefits in the first place. If they do not, there will be 
a Medicare backup and we will give you the details on that later.
  This just provides a modicum of additional certainty, some degree of 
confidence that they have some idea, with one of those calculations, of 
the premium itself, that it is not going to be $45, $55, $65 a month; 
that it is going to be $35 a month, give or take 10 percent. I do not 
think that is too much to ask.
  We had a debate about this legislation in the committee. I was 
disappointed the amendment was not adopted in committee. I feel so 
strongly about it I think it is important for the Senate to have an 
opportunity to reconsider the amendment.
  We got a letter from the National Committee to Preserve Social 
Security and Medicare. Let me read this letter:

       On behalf of the millions of members and supporters of the 
     National Committee . . . I am writing in support of your 
     ``Guaranteed Premium'' amendment to S. 1. The current Senate 
     prescription drug bill, S. 1, does not limit the premium 
     increases, which could potentially subject seniors to 
     dramatic fluctuations in premium costs. Seniors want 
     assurance that their costs will not suddenly skyrocket. Over 
     the past year, premiums for Medicare Plus Choice plans 
     increased 15.5 percent. Seniors need to know what costs they 
     can expect in order to receive a drug benefit. Most seniors 
     are on fixed incomes and even the slightest increase could 
     impose a huge burden on their ability to afford a drug 
     benefit or other necessities, such as food and shelter.
       We understand your amendment would limit premium increases 
     . . . preventing dramatic changes in price. We agree that 
     seniors have the right to know what they will be paying today 
     and in the future for a drug benefit. . . .

  I will just add one other thought. The letter notes that a slight 
increase could impose a huge burden on their ability to afford a drug 
benefit. I have talked literally to hundreds of seniors--maybe even 
thousands by now. I know it is hard for a United States Senator to be 
fully appreciative of what it means to live on Social Security but many 
seniors do. That is their only source of income.
  We are now telling them in addition to the $58.70 they pay for 
Medicare Part B, there is going to be added to that at least $35, 
probably more, for a prescription drug benefit. So now we are talking 
about, not $58, but probably $100, out of whatever Social Security 
check they get each month.
  I have talked to many seniors who have said: For me, it is a choice 
between drugs and rent, drugs and groceries.
  I think we overlook that. I think people minimize the extraordinary 
financial impact these charges, these costs have in their daily lives. 
What they want is a little more certainty. What they want is a little 
more assurance that they can make ends meet with these extraordinarily 
limited budgets within which they live.
  That is what our amendment does. I am hopeful the Senate will 
consider it. My hope is that, on a bipartisan basis, we can adopt it 
later today.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, I worked with Senator Baucus all morning, 
getting people to come and offer amendments.
  For the information of all Senators and other interested parties, we 
have a number of very important committees going on--Judiciary, 
Commerce, to name but two. We have people on this side who really want 
to offer amendments, but they are simply unable to do so because of 
their other Senate responsibilities today.
  There will be amendments offered, but we have to get these committees 
out of the way first.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                     Amendment No. 939, As Modified

  Mr. DASCHLE. Madam President, yesterday the committee offered a 
modified version of the bill before us. My amendment does not conform 
to the modified version in terms of page and line numbers. I ask 
unanimous consent that a modified amendment be offered and substituted 
for the amendment I offered earlier this morning.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 939), as modified, is as follows:
       On page 106, strike lines 11 through 14 and insert the 
     following:
       ``(B) the lesser of--
       ``(i) the amount by which the monthly plan premium approved 
     by the Administrator for the plan exceeds the amount of the 
     monthly national average premium; or
       ``(ii) in the case of an eligible beneficiary who is 
     enrolled in a Medicare Prescription Drug plan that provides 
     standard prescription drug coverage or an actuarially 
     equivalent prescription drug coverage and does not provide 
     additional prescription drug coverage pursuant to section 
     1860D-6(a)(2), an amount equal to 10 percent of the amount of 
     the monthly national average premium.
       On page 80, strike lines 1 through 12 and insert the 
     following:
       ``(A) In general.--In the case of an eligible beneficiary 
     receiving access to qualified prescription drug coverage 
     through enrollment with an entity with a contract under 
     paragraph (1)(B), the monthly beneficiary obligation of such 
     beneficiary for such enrollment shall be an amount equal to 
     the lesser of--
       ``(i) the applicable percent (for the area in which the 
     beneficiary resides, as determined under section 1860D-17(c)) 
     of the monthly national average premium (as computed under 
     section 1860D-15) for the year as adjusted using the 
     geographic adjuster under subparagraph (B); or
       ``(ii) 110 percent of an amount equal to the applicable 
     percent (as determined under section 1860D-17(c) before any 
     adjustment under paragraph (2) of such section) of the 
     monthly national average premium (as computed under section 
     1860D-15 before any adjustment under subsection (b) of such 
     section) for the year.

  Mr. DASCHLE. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Roberts). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SANTORUM. Mr. President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Graham of South Carolina). Without 
objection, it is so ordered.
  Mr. SANTORUM. Mr. President, I am going to make an opening statement 
on this legislation. I understand there are amendments being worked on.
  First, I commend the President for his leadership. But for his 
leadership on this issue, we would not be here today. The President a 
few months ago laid out a framework for the reform and improvement and 
strengthening of the Medicare system which we are using in this 
underlying bill today. The President said he would be willing to move 
forward with an expansion--a rather expensive expansion, $400 billion 
over the next 10 years of taxpayer dollars--to provide prescription 
drug benefits for our senior population, outpatient prescription drug 
benefits. Obviously inpatient prescription drugs are covered but 
outpatient prescription drugs are not. The President said he would be 
willing to move forward with that. He believes, as I believe everyone 
in this Chamber does, that this is a necessary part of the continuum of 
care with which seniors, as well as all Americans, should be provided.
  The question is how do you move forward with a huge dollar expansion 
of a program, Medicare, which is already $14 trillion short in revenues 
over the next 50-plus years? How do you move forward with a bill or an 
idea that is going to expand this program and create another unfunded 
liability of $3 to $4 trillion?
  What does that mean? That means the money coming into the Medicare 
system is going to be insufficient to cover the additional expenditures 
we are going to put on the system with this bill to the tune of $3 or 
$4 trillion over the next 50 years. How do you justify adding this 
expense to a program that is already $14 trillion short in revenues?

  The President said, I justify this because, No. 1, we need to do it. 
It makes no sense to have seniors receive care

[[Page S8175]]

that is not the best quality or not necessarily recommended from the 
standpoint of what a physician would recommend but is done because the 
alternative pharmaceutical product is not covered under Medicare. They 
will do things that may not be the best quality care or may not be 
called for, just because it is covered, as opposed to something that is 
not covered. This is an important benefit that needs to be provided. 
But how do you justify that to the American public and future 
taxpayers?
  The President said we need to balance that future expenditure with an 
improvement to the system, an improvement in terms of efficiency in the 
system to make the system work better from two perspectives: No. 1, 
from the perspective of efficiency so the money we are putting in to 
the system is used more efficiently and, No. 2, that we provide better 
quality, that the quality of care improves under the changes we hope to 
make in the Medicare system.
  The President set out with those two goals, provide a prescription 
drug benefit but improve the efficiency and the quality of the Medicare 
system going forward. He had other goals, but I would argue those are 
the two big, overriding ones. So he put forward a model.
  He understood the way you improve efficiency in this country is not 
to have the Government run the operation. The way you improve the 
efficiency is to marry what Government does well with what the private 
sector does well. What Government does well is guarantee a stream of 
funding and provide oversight, regulation--or refereeing, if you will--
to the private sector. What the private sector does well is compete to 
drive down costs. Competition drives down costs. And it responds to the 
consumer in front of you, responds to the person with whom you have to 
deal. Because if you do not treat your patient well or your insured 
well, then you will lose their business.
  Under Medicare today, Medicare cannot lose the senior's business. You 
have one Medicare plan. It is what it is. If you don't like it, tough. 
That is it. People cannot walk, by and large. In a few communities they 
have Medicare+Choice but just in some urban areas in this country. By 
and large, Medicare has a monopoly and they treat beneficiaries just 
like all monopolies treat beneficiaries--not well.
  What we want is to have a system in place where we have private 
sector insurance plans that have to treat you well, have to design 
benefit packages you want; otherwise, they are not going to get your 
business. If they do not get your business, they do not survive. We 
believe that will improve the quality of the medicine that is going to 
be practiced. But it will also improve the efficiency of the health 
care system.
  The tradeoff, and an important one, to adding benefits to this 
already cash-starved program was to put some things in place that over 
the long term will result in more efficiency and better quality care 
for our seniors. So the President put up a model which is doing that 
right now. The model is the Federal Employees Health Benefits Plan that 
the Presiding Officer from South Carolina and myself are under--with 
the exception of the pages. I don't know for sure whether they have 
coverage under the Federal Employees Health Benefits Plan. I don't 
know. I don't think they do. Maybe they do. All the other people in 
this Chamber who are employees of the Senate have health coverage 
through their Federal Employees Health Benefits Plan. It is a system 
that marries what the Government does well, which is a steady stream of 
funding, and an oversight board to make sure the private sector is 
doing things properly--and with competition. They let each region in 
which the Federal employees health benefit system offers plans 
contract. People come and bid for business. The companies that 
participate in the Federal employees health benefit system go out and 
market to Federal employees in the region to get them to sign up to 
their plan. If they don't do a good job, people do not sign up for 
their plan. If they don't offer a good benefit package, if they don't 
service the beneficiaries well, then they lose business and move on. 
And someone else comes and picks up the slack. It is a good combination 
of public-private partnership to get quality benefits and efficiency of 
taxpayer dollars and a reliable benefit for Federal employees.

  The President saw this as a good model to move Medicare--which is 
right now a one-size-fits-all Government program run out of Baltimore, 
MD, and here in Washington, DC. Prices are set here for all of the 
country--what is going to be reimbursed, what is not going to be 
reimbursed, what technology is going to be available, what medical 
technology will not be available, what drugs will be available, and 
what drugs will not be available. Everything is run out of central 
planning here.
  The average time it takes for Medicare to have a new technology 
approved is roughly 18 months at the earliest and 3 or 5 years at the 
latest. The turnover rate for a change in medical technology is 18 
months to 2 years. Just about the time Medicare has the approval of a 
new technology, it is replaced.
  We are always behind. Why? Because it is a bureaucracy. Guess what. 
They don't have to compete for your business. If you do not like it, 
tough. You have no choice. If you want health care coverage as a 
senior, this is what you get. It is not consumer friendly. It is not 
patient friendly because there is no incentive to be.
  We want to marry these two concepts--public and private, the good 
parts of both.
  When the President put this plan out, some complained that what we 
put out wasn't detailed enough. I know many of us in the Senate urged 
the President not to be very detailed. His job is to provide the vision 
and the overall goal and structure by which we can accomplish it in 
very broad-brush terms. What we have been doing for the last few weeks 
is figuring out how precisely we get that done. It is very complicated. 
It is very difficult. We are working through a lot of those issues 
right now.
  I think we took a very good step and a big step in the right 
direction in the Senate Finance Committee. That is the next group which 
I would like to congratulate--the chairman, Senator Grassley, and the 
ranking member, Senator Baucus--for working together in a bipartisan 
way.
  The President put forth a plan that he argued--and I think it has 
been proven out--is the basis for a bipartisan compromise.

  ``Mediscare'' has been used in this Chamber and across this country 
for far too long. It is time to get down to solving the problem. That 
means we have to try to put something together that brings the two 
parties together. The President put out a plan that lays the 
foundation. Now it is our job to continue that work.
  I think with the vote in the Senate Finance Committee of 16 to 5, you 
saw that there is a foundation which has now been flushed out 
considerably on the Senate floor as a solid one on which to build this 
service. There are still a lot of problems.
  I don't want to paint this as a rosy scenario and that we are going 
to walk arm in arm down the aisle for a bill signing in the next day or 
two. There are a lot of issues we have to go through. The ones that 
concern many on this side of the aisle and yet to be resolved are 
issues that go to the underlying premise of what the President is 
trying to accomplish.
  I talked about the President wanting to add this very expensive and 
needed benefit onto this program but at the same time providing some 
improvements to the system--marrying the private and public sector so 
we would have long-term stability in this program.
  There are concerns on this side of the aisle that while we have 
accomplished the first--that is, we have added $402 billion worth of 
new drug benefits--we may not have done enough to make sure this new 
system that mirrors the Federal Employees Health Benefits Plan, a 
combination of the public-private, as opposed to just the solely 
public. But this new system was written in a way for it to succeed.
  We are working through that process right now to make sure we don't 
go forward with a plan which simply adds a drug benefit to a 
monopolistic, publicly run, bureaucratically run health care system--
Medicare--and simply add more costs to it without the improvements in 
efficiency and quality that, frankly, beneficiaries deserve and that 
the public should demand.

[[Page S8176]]

  We have some work to do. A lot of Members on our side are very 
concerned about that balance because it is important. The big stumbling 
block on this side of the aisle has always been of adding a new benefit 
that has never existed. Universally, people here believe we need to 
extend outpatient prescription drug benefits to seniors. But the real 
question is, How do we deliver that benefit? Candidly, how do we 
improve the Medicare system that was designed in the mid-1960s? It was 
designed after a 1965 Blue Cross plan that exists nowhere in the 
``wild,'' if you will--only in the zoo here in the U.S. Capitol--which 
is Medicare. But it does not exist in the ``wild'' anymore because it 
couldn't survive. It became extinct because it could not compete with 
all the other species out there that were offering better benefits at 
higher quality and at lower costs.
  This dinosaur--this 1965 Blue Cross plan--became extinct in the 
``wild.'' But only in the laboratory of the Government here in 
Washington, DC, has this dinosaur been able to survive. Does it survive 
and thrive? No, it does not. Is it reproducing? No. It will be 
reproduced nowhere. The only place this will ever survive is in this 
environment of the Federal Government.
  What we need to do is understand that there are better species out 
there. There are better models out there. There are improvements as to 
how we deliver quality care and better responses that beneficiaries 
need through the insurance process. We need to implement those. I would 
argue that we need to implement them quickly. We need to get as many 
people as possible into those better models. I don't see too many 
people driving around in a 1965 Plymouth Fury. People do not drive them 
anymore. They are driving newer models and technologically innovative 
automobiles that have responded to consumer demands and they have 
improved as a result.

  That has not happened in Medicare. We need to get people into a much 
more efficient, quality-oriented model for them to ``drive'' through 
their senior years. That is what we are attempting to do. But if we do 
not do that--and in the past, when we looked at all these bills, 
whether it was in the last session of Congress or in previous sessions 
of Congress, we were never willing to get out of the 1965 ``car.'' We 
always wanted to keep more and more people, with more and more demands, 
and with there being more and more complexity, ``driving'' in this old 
vehicle that does not work well.
  It is on its last leg. As I said before, using the animal analogy, it 
does not survive in the ``wild.'' We want something that can survive in 
the ``wild.'' Why? Because the private sector has evolved to be 
responsive to the needs of our people. So as new technologies come into 
play--where it takes 2 or 3 or 4 or 5 years for Medicare to figure out 
it is a good idea--the private sector, because they have the pressure 
of knowing people can leave their plans, can look at it and say, yes, 
we will reimburse this right away because it is better quality, 
probably better value, and it may lead to lower costs somewhere else. 
Medicare does not do that. It is not that they can't do it; they don't 
do it.
  So we will have plans in place that change as medicine changes. And 
that quality is what seniors deserve. But we have to make sure the bill 
is structured to make sure these plans have the resources and don't 
have the regulatory ropes to constrain them to where they can't 
survive.
  So it is a major issue. It is one that is being debated as we speak 
in a lot of places around this Capitol as to how we structure this 
system. I know there are many people on the other side of the aisle who 
would not like to see this system exist. They have been very clear 
about that. They want a continuation of the ``extinct dinosaur'' that 
can survive nowhere in the ``wild'' as being a model by which we can 
model this plan after to deliver this benefit.
  Or the 1965 Plymouth, you don't see very many of them around. Why? 
The consumer wants something different, better, higher quality, more 
efficient. That is what we are trying to accomplish here. I understand 
there is opposition over there. I understand people want to stay with 
what they are comfortable with. Unfortunately, for lots of years, 
seniors have been scared into believing that any change is bad, that we 
are going to destroy Medicare or have Medicare go away. Candidly, 
models of cars change, animals evolve, we change based on technology, 
innovation, improvement, and Medicare needs to do the same. It needs to 
have the ability to do the same. That should not scare the American 
public. It should be that we give seniors the kind of quality health 
care system they deserve, that every other American has in the private 
sector who has private-sector insurance, which is available to them. So 
we are making a good start. We have a little ways to go.
  We have to make sure that what is the highest priority on this side 
of the aisle--which is to have a balance between a drug benefit and 
improvements to the system--is maintained in this bill. I know that 
isn't the highest priority for many on the other side of the aisle. 
Thank goodness there are more than a handful of Members on the other 
side of the aisle who understand the need to accomplish both these 
goals. That is what bipartisan consensus is formed on.
  I hope we can continue down that road and keep this bill centered, by 
accomplishing both missions, not just what one party really wants or 
what the other party is really seeking but both missions. If we can do 
that, if we can have a balanced bill, then we will pass this bill by an 
overwhelming margin. If we have a bill that ultimately is going to rely 
on a ``1965 Plymouth'' or a ``dinosaur'' to deliver benefits, then it 
is not going to be a bipartisan bill and there will not be any bill at 
all.
  We need to have both. Seniors deserve both. Taxpayers deserve both. 
Future generations, who are going to be dealing with this unfunded 
liability, deserve both. And we have a responsibility to deliver that.
  Mr. President, I yield the floor and 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. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. Mr. President, while we have been in the quorum call, 
there are a lot of negotiations underway in terms of various amendments 
being brought to the floor and the ones that are currently here. While 
I have an opportunity, I want to spend a few moments on a couple of 
charts I know have helped me and I believe will help my colleagues and 
others who are paying attention to the debate as to why we are looking 
at real changes in Medicare and why such changes will result in 
strengthening and improving Medicare in a way that we just did not do 
5, 10, or 15 years ago and why the time is now for us to act.
  Yesterday, I talked a little bit about the history and the advances 
that have taken place since 1965, when Medicare was enacted. The 
advances have been huge. The point I had begun to make was that the 
advances in health care, health care delivery, medical technology, and 
science have been huge and dramatic, but at the same time the 
structure, the system, has been almost frozen in a 1965 model.
  I will use three consecutive charts. The X axis here will be time, 
1965, when Medicare was first enacted, and the present date here, 2003 
or 2005. Then on this vertical axis--this is subjective--is change. It 
is modernization. It is advances. It is differences from 1965 to where 
we are today. With the third chart, I will put this together.
  Referring to the first chart--this is change; this is time--Medicare 
was enacted in 1965. Things didn't change very much in the system until 
1972, when coverage was expanded for individuals with disabilities and 
for a subpopulation that had been missed but was growing, and that is 
people with kidney failure, called ESRD, end stage renal disease. That 
was a pretty dramatic change in the system because we changed the 
entitlement nature and we expanded coverage. We are doing a little bit 
of that on the floor this week and next week. I will come back to that.
  It was a reasonable change. In terms of overall change, it wasn't a 
big change. Then things went for another 13 years, to 1985, until we 
had the next big structural change in the way health care is delivered 
to our seniors.

[[Page S8177]]

That change--we ratchet it up a little bit here in 1985--we had what is 
called prospective payment for hospitals, inpatient hospitalization. So 
if you had a patient in a hospital, instead of just reimbursing 
whatever cost went through, we sat back and said: What should a patient 
with a certain diagnosis--say, heart disease, or it could be ischemic 
heart disease--if you took all the patients coming through, what is a 
reasonable price, looking at everything we knew at that point in time, 
to reimburse the hospital.
  That is called the prospective payment system, PPS, for inpatient 
hospitals. That was an innovative change that was important to overall 
health care delivery in the system.
  Then we had several references to what happened in 1988 and 1989. In 
fact, a lot of people have said to me: We will have to be very careful 
with what we do; otherwise, we will repeat what happened in 1988 and 
1989. Here we had enactment. We passed a bill and then repealed 
catastrophic coverage, meaning high out-of-pocket expenditures if there 
was a tragic, unexpected event or an automobile accident where health 
care costs were just huge, that there would be some limit there. It was 
nobody's fault. You would have some insurance there to cap how much you 
take out of your pocket to pay for that catastrophic event in one's 
life.
  Here I have a line coming up. And since we repealed it, I have a line 
going back down. So we attempted a pretty big change at the time, but 
for all sorts of reasons the system was not quite ready for it and, 
therefore, it was enacted and then shortly thereafter, in 1989, 
repealed.

  Then things didn't change very much until the late 1980s and we had 
added a prospective payment system for physicians. I mentioned that we 
did it for hospitals in 1985. So again, we ratcheted up, and the system 
changed. It was modernized; it was improved in the late 1980s.
  Since then, we had some other types of changes that didn't 
dramatically change the system in terms of the way health care is 
delivered to our seniors but did affect it dramatically. We had the 
Balanced Budget Act of 1997. We had what is called Medicare+Choice 
which is predominantly an HMO. What we are talking about in the bill on 
the floor is not health maintenance organizations. We are talking about 
a newer, more up-to-date way than HMOs of delivering care called PPOs, 
which is a preferred provider way of delivering care. It is very 
different.
  This is Medicare+Choice, HMO delivery, in 1997. Today, there are 
about 5 million people in HMOs and Medicare, and although those numbers 
are falling over time, it is because there are fewer HMOs offering it 
because of the regulations, the way we reimburse. But the people who 
are in the HMOs, those 5 million seniors, are very pleased with those 
plans in the aggregate. We did some other prospective payment changes 
here but not much change.
  The point of this graph is that since 1965, the Medicare system, a 
great system that has served people very well, has not changed very 
much at a time--and this is what is on the next chart--when technology, 
medical science, medical advances have all been really quite dramatic 
over this same period. Indeed, if you look, again, from 1965 to 2003, 
you see there has been huge growth in health care advances, both 
science and technology, what we know, the human genome project, 
delivery of care directly.
  For example, in 1967, there was the first successful heart transplant 
and the first liver transplant. I put that on there because that is 
what I did before coming to the Senate. In 1969, we developed a 
genetically engineered vaccine. We are trying to go back and pass new 
legislation called BioShield. As soon as we get finished with Medicare, 
we have to come back to that legislation because it looks at the 
importance of vaccines to fight bioterrorism, SARS, and other 
illnesses.
  In 1974, this body passed the HMO Act, a new type of delivery system. 
It hasn't worked out quite as well as anybody would have liked, but it 
was important to try to deliver health care more efficiently. In 1977, 
coronary angioplasty developed, where you put these stints in the 
heart. Before then, it had never been done.
  In 1984, we talked about HIV/AIDS on the floor. I was a resident at 
that time, working up in Boston, MA. We didn't even know what that 
virus was, HIV/AIDS. Since 1981, 23 million people have died from this 
virus we identified not that long ago. We responded on this floor in a 
very admirable, bipartisan way, following the leadership of the 
President. We passed a public health bill that targets this HIV/AIDS 
virus throughout the world.
  The first successful single lung transplant was in 1983.
  In 1985 came preferred provider organizations, a new type of health 
care delivery system. Over a million people were enrolled.
  I will jump up to 1998. Now 90 million people are enrolled in this 
entity that was invented in 1985. Remember, Medicare hadn't changed at 
all. Medicare doesn't have PPOs in it today, except in a few 
demonstration projects.
  Prozac, in 1988, had a revolutionary effect on people when 
appropriately prescribed for certain disorders.
  In 1987, there was the first cloned adult animal, Dolly. We remember 
that. It brings up all sorts of issues we will be coming back to 
eventually here, including the appropriate role of the cloning, stem 
cells, and all of the issues that are before us.
  In 1997, 85 percent were enrolled in managed care. It did not exist 
in 1965 or 1970. Yet there was 85 percent enrollment in 1997.
  The human genome project--the Senator from New Mexico just walked in 
and he is, in my mind, the father of this project. It finished 2 years 
ahead of schedule, under budget. It really started as an idea here, or 
was captured as an idea on the floor of the Senate by the distinguished 
Senator from New Mexico and others as well. Since that point in time, 
over a 10-year period, there are 3 billion bits of information we now 
know that we didn't know 10 years ago. There have been tremendous 
advances, and it opens up a whole new spectrum of innovation, 
creativity, and technology to benefit untreatable diseases today. This 
human genome project is exciting.
  The challenge we have today is to have a Medicare system that can 
capture that innovation, that technology, and what we learned in better 
health care delivery, and right now Medicare doesn't do that. Medicare 
is not designed to do that. Thus, as we look ahead, we need to 
strengthen and improve Medicare. Now we have the opportunity.
  If you put these two charts together, it explains why we are on this 
bill and why we are working hard to negotiate this bill in a way that 
is bipartisan and looks at health care security for seniors. That is 
what we want on both sides of the aisle. Shown in red on this chart, 
Medicare has not changed very much over the last 35 years. Yet we have 
health care delivery, and science and technology, pharmaceutical 
research, and heart surgery, lung surgery, and coronary artery bypass 
surgery wasn't done in 1965, period. Medicare has not changed at all. 
Health care advances have changed dramatically and will change even 
more, and it is this gap--for our seniors we are talking about--that we 
are addressing.
  How can we sufficiently change Medicare so the line will come up and 
we can be more in sync with health care advances and health delivery 
advances with a system that is flexible enough to capture them--whether 
it is treatment for mental illnesses or whether it is preventive care. 
There is no preventive care in Medicare today. There is no protection 
for catastrophic coverage. There is no chronic disease management. Yet 
our health care delivery system knows that is the most effective way to 
treat seniors and, indeed, everybody in terms of health care.
  So what is the response? The gap is what conceptually has changed. I 
don't have numbers over on this side of the chart because it is 
concepts. But at least what we are trying to do is bring that forward. 
What are we going to do? I will go through this quickly. We have 
seniors today--this is Medicare today--who have two choices. There is 
traditional Medicare, with 35 million in the program. These are seniors 
and individuals with disabilities, those two groups. Five million 
people are in Medicare+Choice. We brought that forward about 5 years 
ago. Those 5 million are pretty satisfied. They are mainly HMOs, that 5 
million. So 35 million are in traditional Medicare, what we call fee 
for service. It is this traditional Medicare that really has not 
changed

[[Page S8178]]

much since 1965. There have been some changes but not many.

  The next question is, if this legislation is passed, after we amend 
it and pull things together, what are we going to have in 8 months or a 
year from now? That will be this chart. It is going to be the same 
format for the next two charts. We will have, again, traditional 
Medicare, with 35 million people, and 5 million people in 
Medicare+Choice. This will alter a little bit. The addition to this 
will be the prescription drug card. Maybe 6 to 9 months from the time 
the bill is signed, every senior will have access to a prescription 
drug card that will allow that senior to go into a pharmacy, a retail 
outlet, or a mail order house and, with that card being used, will be 
given a discount of maybe 10, 15, 20 percent. That will be within--I 
don't know--6 to 8 months when that will take place, while the rest of 
the system is being modernized. That is in 2004.
  People need help now. We can give them help now. I mentioned some 
figures earlier. If you are low income, this prescription drug card can 
be used just straight right off the top as a benefit. Then the last 
chart----
  Mr. DOMENICI. Mr. Leader, every time you pointed to this group, the 
most important fact about it is they don't have any prescription drugs. 
When you talk about the other groups, they may have. But this group 
doesn't have any today.
  Mr. FRIST. That is correct. In response to the distinguished Senator 
from New Mexico, he is exactly right. We are talking about health care 
security for individuals, and 35 million seniors who are choosing this 
particular plan today do not have access. They have no choice. Even if 
they wanted it through Medicare, they cannot get it. That is the 
benefit--the prescription drug card--that we are initially going to 
reach out with to help every single senior.
  People with low incomes will get a lot more help than wealthy people. 
Every senior will have access to the prescription drug card. On the 
last chart, we will show what happens 2\1/2\ years from now. This will 
be Medicare in 2006. This is exciting. Seniors, after using the 
prescription drug card about 2 years, will stop using that because, by 
then, we will have designed a system that does the following:
  Those people, just as the distinguished Senator from New Mexico said, 
who chose traditional Medicare can keep it. They can keep exactly what 
they had, but they will have access to a new prescription drug 
insurance plan. They don't have this now. We are going to add that. 
Some people say they don't want all these choices. ``I am fine, Dr. 
Frist, Senator Frist. Let me keep what I have. I am 80 years old and I 
just want exactly what I have. I am doing fine.''
  We are going to be able to tell them they can keep what they have, 
but if they would like, they can have access to prescription drugs. The 
green here represents prescription drugs. Medicare+Choice, which is 
mainly HMOs, already has prescription drugs--almost all of them. The 
value is about $600 today, if you choose this. Only 5 million people 
chose this, and 35 million are in that. We will really double the 
value. If you want to stay in Medicare+Choice, the actuarial value--I 
really hate using these words--you are going to get this much benefit, 
and you are going to have this much benefit.
  Or--this is the exciting part--we have the entities that build upon 
all the rapid advances of the last 20 to 30 years that is state of the 
art. That is why it is so important to get the best Democrats have to 
offer, the best Republicans have to offer, the best of the private 
sector, the best of the administration to make sure this is designed 
well with state-of-the-art technology, the most modern, the fairest, 
the most equitable--this is where a lot of the debate is going to be.
  People can stay in traditional Medicare, choose Medicare+Choice, or 
choose these new PPOs. The PPOs will have prescription drug insurance 
as part of integrated health care and coordinated care where they have 
teams of doctors and chronic disease management, with nurses who are 
integrated into a team who may call a patient once a week to make sure 
they have not picked up too much weight. When you pick up weight, that 
means you are retaining water, and you could develop congestive heart 
failure.
  They actually will have chronic disease management and preventive 
care. Remember, there is no preventive care in Medicare. There is no 
coordination in Medicare. If you have chest pain, it may be esophagitis 
or indigestion, and you might go see Bill Frist, the heart surgeon, 
because it is in your chest. That is what you do in Medicare. You go to 
Bill Frist, the heart surgeon. I know a lot about heart surgery and 
fixing a heart, but I do not know that much, to be honest with you, 
about indigestion. Yet people will come see me when I practice. That 
coordination is fragmented, it is disjointed, and that is what we will 
give away by giving this option of the PPOs. That is pretty much it.
  The debate is how many people will move from traditional Medicare to 
Medicare+Choice or PPOs. Should there be incentives for people to move 
since we know PPOs are a higher quality of care in terms of objective 
management?
  It only makes sense, if you coordinate people's care, you have 
preventive medicine built into it and chronic disease management. It is 
going to be hard to argue that the care is not there. But what sort of 
incentives? That is where much of the debate will be.
  Initially, the debate was maybe the prescription drug package over 
here should be more available than this one and people will gravitate. 
The underlying bill does not have that happen. This Medicare benefit 
for drugs is the same as the Medicare+Choice benefit and the same as 
the PPO benefit.
  That is the way I look at this issue. It keeps it simple, which I 
need as we go through this debate. Now we are down to filling in the 
details to make this system work.
  I am very optimistic that this will be what seniors have access to in 
2006, but it will not happen unless we do our work over the next 10 
days.
  Mr. DOMENICI. Will the Senator yield?
  Mr. FRIST. Mr. President, I will be happy to yield to my 
distinguished colleague.
  Mr. DOMENICI. Mr. President, first, I was watching the majority 
leader's discussion in my Senate office. I was so pleased that he chose 
to give the history of Medicare and his personal understanding of where 
we are that I thought I should come down and be present, at least as he 
finished.
  I congratulate Senator Frist. I am going to say something that is 
perhaps outrageous. I do not think it is possible that previous 
Senates, as they passed great health care programs--Medicaid, 
Medicare--or when they passed Social Security in the Franklin Roosevelt 
days, I do not believe there can possibly be a Congressional Record 
that has an explanation of something as complicated as this that is as 
competent, as good, as understandable as this, and I commend Senator 
Frist for that.

  First of all, Senator Frist understands the issue. Second, we are 
very fortunate that he happens to be a great doctor who decided to be a 
Senator. That does not happen very often either in history. Combine the 
two, and then we were pretty fortunate--we Republicans, and then the 
Senate--that we elected him as leader.
  Frankly, as his good friend, the truth is, Senator Frist had not been 
around here long enough to be the leader. But we picked him anyway. How 
lucky we are. Frankly, he has not missed a step. This year will end, as 
it started, with one success after another because of his leadership.
  This bill will pass. Seniors will know more about this program than 
any comparable program because of Senator Frist, because of the way he 
has handled it. As a matter of fact, those who talk to America on all 
the talk shows, whether they are for this or against it, whether they 
call it too liberal, too generous, whether they call it wrongheaded, 
whether they call it a Kennedy program that Republicans have been 
suckered into--whatever they are saying out there, the truth is, it is 
very bipartisan, and there is nothing wrong with that.
  I was telling Senator Frist the other day that Social Security and 
Medicare heretofore in our history were not passed with equanimity of 
support.

[[Page S8179]]

However, once they were passed, regardless of what has been said 
partisan-wise out there, the support has been just about the same by 
Democrats and Republicans for Medicare funding and Social Security 
funding. We have all agreed to save Medicare and save Social Security. 
It is just about Democrats and Republicans doing the same thing because 
it seems that somehow the seniors of the country bring us together. We 
end up being one, and that is happening here.
  The Senator would admit, would he not, that we are taking a chance 
because we are drafting something enormous, and a huge portion of it is 
going to have to be administered by both private companies and by the 
Government. It would seem that we are trying in these models to give 
our seniors choice, to build into a model something we have left out of 
medical practice, and that is preventive medicine and group practice.
  The majority leader gave an example of where perhaps somebody who is 
sick will actually be treated by a team if they are in a PPO. That does 
not happen today unless it is an extraordinary fee-for-service doctor 
who has a lot more than just a doctor's office but has all the 
equipment and two nurses who are treating people. We also are hoping 
people will say they are comfortable, but maybe they ought to move over 
and try this broader scope of coverage.
  I will tell all of my colleagues that my good friend, the leader, 
knows a lot about my ailments. I have been pretty sick for the last few 
years; in fact, for 4\1/2\ years. I have something wrong with my hand 
that causes unabated pain and the leader has been very helpful to me. 
The other day he was explaining the PPO system to me. He slipped and 
talked to me as one of America's senior citizens. He started laughing 
as he said it. He said: Well, you are, aren't you?
  I said: That's true, I am. I'm 71.
  He laughed and said: It would not be too easy to tell you, Senator, 
just move on over and get into a PPO. I said to him it would not be 
easy. I want to be honest, it is not going to be easy for a lot of 
senior citizens.
  The point is, they are going to find out from their neighbors, their 
friends, through their relatives, and, if it is done right, from their 
doctors, that moving from traditional Medicare to the PPOs, the group 
coverage which will also have the same prescription coverage, is a 
better way for more Americans.
  That is our hope. As a matter of fact, I think I am correct that is 
the hope of the system. That has to happen if this new system is going 
to work properly. I ask the Senator, is that a fair assumption?
  Mr. FRIST. Mr. President, in response, I believe it is. Some people 
would say, no, we can make everything work and improve on everything. 
In terms of the demographic shift, the fact is, we have doubled the 
number of seniors. It is unprecedented. It never has happened in the 
history of this country, or indeed in the world, where a country has 
doubled the number of seniors over a 30-year period, going from 40 
million seniors to approximately 78--really about 37 million to 77 
million. At the same time, we have not half but a diminishing number of 
workers paying into the system.
  I argue that this is done on quality of care. I just know if one gets 
into a system where they have a doctor talking to a nurse, a doctor 
talking to a specialist, that they have preventive care, they have a 
nurse who specializes in chronic disease management--which is the whole 
purpose of this coordinated care, that they are getting a higher 
quality of care.
  In addition to that, it is a more efficient system. Choice is going 
to allow people to go to the systems that give the best care, and with 
that it is sustainable over time because it allows an element of the 
marketplace to work.
  The marketplace is nothing more than rational people making rational 
decisions, and it might be to stay in traditional Medicare. But the 
argument would be if someone is getting better care over here and 
better value over time, the PPO model will attract people.
  The other point I should at least mention, and the reason why I know 
it can work, is that people who are near seniors say they are 64 years 
of age and they become 65 years of age about 80 percent of them have 
similar type plans, although not exactly. They have employer-sponsored 
plans. So when they get to be 65--not the Senator from New Mexico 
because he is in the Federal Government and he is already in a plan 
like this. We have that advantage. We want to give it to our seniors. 
But for the person who is 64, soon to be 65, when they make it to 65 
they give up their employer-sponsored plan and have to take this 
traditional Medicare. So what we are going to say is when someone hits 
65----
  Mr. DOMENICI. They can stay there.
  Mr. FRIST. They can keep that sort of plan. That is why I am so 
confident that over the next 30 years this will work because that is 
what the Senator has, and what I have, and what most employer-sponsored 
plans are. But that is what we are denying seniors and those with 
disabilities. That is why underneath I am so confident this can work.
  We have to make this work. We have to improve it and that is what we 
can do over the next 8, 9, 10 days.
  Mr. DOMENICI. Does the Senator remember--well, he was not in the 
Senate yet.
  Mr. FRIST. I was probably in the operating room.
  Mr. DOMENICI. He probably was. The Senator was making those flying 
trips back and carrying the hearts so he actually could transplant them 
in a timely manner. But when we first started talking about HMOs, there 
was a big battle going on between whom? The doctors of America and the 
legislators because the doctors were not accustomed to HMOs. The 
doctors were all accustomed to what was called traditional care; 
that is, they themselves ran it. They did not have any kind of group 
practice. They did not have any kind of clinical practice. As a matter 
of fact, we used to have to go home as legislators and meet with 
doctors and try to convince them that the goal was not to destroy the 
medical practice but rather to give them an opportunity to practice in 
a different way.

  Mr. FRIST. Yes.
  Mr. DOMENICI. Frankly, what was being said in this Chamber--not as 
well as the Senator from Tennessee says it and not with as much 
knowledge--but what was being said was everyone would benefit if we 
went to the HMOs. The patients will get better care. Prevention has a 
better chance of inserting itself into the system than the traditional 
way. We have now--and not because we are great thinkers and because 
America plans things very well, but we have moved in the direction of 
PPOs that is professional units--and HMOs, which are privately managed 
delivery groups, they are no longer a surprise to the doctors. Some 
still sit home, like in my State, and wonder what is happening to the 
world. It is passing them by and it is no good.
  The truth is, millions are trying managed care and hundreds of 
thousands of doctors are practicing that way.
  Mr. FRIST. Mr. President, if I could just briefly respond, and that 
is where this Medicare+Choice is really the HMO model, although not for 
everybody.
  Mr. DOMENICI. Correct.
  Mr. FRIST. We have learned a lot from it since 1974. The point is 
Medicare has not changed.
  Mr. DOMENICI. Right.
  Mr. FRIST. We can preserve the good of that model but, based on what 
we know in 2003, add state-of-the-art, quality, partnering-type, 
coordinated, integrated delivery of health care. That is a great 
example of traditional Medicare in 1965. We opened up the 
Medicare+Choice and 5 million people went with it. That is one type of 
plan. It is not for everybody now because, to be honest, a lot of 
patients want more choice, and therefore we give them a system that has 
more choice. That is really what this legislation is all about.
  Mr. DOMENICI. The other thing I wanted to close with, and it seems to 
be quite obvious, is there is no question but that some of our best 
Senators have already, or will speak about this plan, and they are 
worried. They will speak with trepidation and principally they will 
talk about two things, but the big one will be it is going to cost more 
than we think. Can we afford it? There is another question that is 
asked around, and that is: Are we giving benefits to the right groups 
of people in the right quantities?

[[Page S8180]]

  I served on the Budget Committee for 28 or 30 years. I was chairman 
14 times. When I left the Committee, I could have given a little speech 
and said, here is what is going to happen over the next 10 years, and 
here is what is going to happen over the next 15 years. Of course, I 
could have predicted cycles, that we are going to have big deficits, 
and we are going to come out of them and we are going to get bigger 
ones. I probably could have talked about the fear of the baby boomers 
and our ability to pay what we have said we are going to pay them when 
their day comes. That is lingering and that is kind of washing its way 
through this debate.
  The question is not, will we, because we will pay. The question is, 
When we get there and we have to make all of those payments, how are we 
going to pay for it? Frankly, I do not think that is a reason to say we 
should not do this. We do not know whether in 15 or 20 years we will be 
able to have a balanced budget. In fact, if someone were to ask me--and 
the Senator is not asking me--I would say in 15 years we probably 
cannot, regardless of the economy.
  The choice is to do something for the seniors on medication, which we 
know we have to do. Or we can choose to do nothing because we are 
worried about how we are going to handle this. Or we can say when that 
day comes there will be another great confrontation, and it will very 
simply be a confrontation about how do we change this, for it is not 
written in stone like the Ten Commandments? How do we change them if we 
have to? Or, God forbid, how do we change the fiscal plan of the 
country, whatever that is, in terms of putting a tax to pay for what?
  Now, it is not embarrassing to admit that. It seems to me that I 
ought to say that. I know that. I am very lucky to know that, and it 
cannot be that I am wrong. People cannot say I should not tell 
Americans that, because it is true.
  I was fortunate. I have heard every economist. I probably deserve a 
degree in economics. I did not take economics. I took chemistry and 
physics.
  I have heard Alan Greenspan 20 times in my life. I called him up on 
the Energy bill. When I need somebody to tell the world there is a 
shortage of natural gas, I call an expert. I say Alan Greenspan will 
find out if it is true. And sure enough, he will tell the world. When 
he does, they listen.
  He tells Members the same thing I am talking about here. But it does 
not mean we should not do this. How can we leave a system that has 
seniors without prescription drugs because we have questions about what 
will happen in 20 years? We don't. We move on ahead.
  The Senator mentioned in passing the mentally ill coverage. I don't 
intend to inject that here. But we cannot forget about the mentally ill 
in our country and the fact they are not covered by insurance because 
we have problems. We cannot say, well, we have problems, so forget 
about them. Because the system made a mistake and did not include them, 
we cannot run around and say we made a mistake. Half the people that 
are in the gutters of America are there because they are homeless, 
because they are mentally ill, because there was no insurance when they 
were little kids and they end up from about 15 years of age onward 
doing nothing. We cannot say there is no solution.
  To that end, I thank the Senator for his assistance with reference to 
that group of people.
  Last, your eloquent speech about the greatest wellness research 
program in the history of mankind, that is what I call the program the 
Senator described when we mapped the human genome. There is no greater 
scientific wellness research program. It delivered to the hands and 
minds of the scientists of the world the chromosome makeup of every 
serious disease known to mankind. They said, as if to challenge the 
scientists, Here it is, here is where they are located within the 
chromosome system; solve it, scientists. What a fantastic thing to have 
been a part of.
  I thank the Senator for commenting on my involvement.
  Mr. FRIST. I take 1 minute. I know we have other Senators on the 
floor and we will turn to those Senators.
  The human genome project which I mentioned a few minutes ago really 
happened. Completion really took 10 years. There are great advances 
that will come out of this mapping of the human genome. It is like a 
phone book we did not used to have, but now we have all that 
information. There will be tremendous advances out of that.
  The problem with the Medicare system, which has not changed very 
much, is those new advances and what we learned cannot be rapidly 
incorporated into Medicare. I talked earlier about heart disease. Most 
people know cholesterol is important to heart disease. The cholesterol 
screening test is not covered by traditional Medicare today. Before 
seniors could benefit from heart transplants, the private sector was 
doing heart transplants. It took 6 years before seniors had access to 
that lifesaving operation.
  The micromanagement out of Washington, DC, means new technology is 
slow to come into the system because it is so rigid. If we are going to 
capture the great advances, we need a system that is receptive, that is 
flexible. That is what the PPO model does. The demographic shift is 
critical.
  The Senator from New Mexico is the expert in this body, having 
chaired the Budget Committee in such an admirable way, a distinguished 
way for so many years. Whatever we do on this floor, we have to look 10 
years out, 20 years out, 30 years out because of the demographic shift. 
This plan does that.
  In terms of the delivery program, it can be sustained over time. 
Traditional Medicare right now, because of its rigidity, means a 
doubling in the taxes. Maybe we can do that as we go forward. By giving 
traditional Medicare improving benefits, and allowing prescription 
drugs, allowing flexibility, allowing choice to be part of that, it can 
be sustained long term.
  I appreciate the comments of my distinguished colleague from New 
Mexico. I appreciate the patience of the other Senators on the floor. 
This is an important issue. Every now and then it pays to walk back and 
look from 30,000 feet at what is going on below. What goes on below 
determines ultimately what goes on at 30,000 feet. I have enjoyed the 
opportunity to do that.
  The PRESIDING OFFICER (Mr. Bunning). The Senator from Michigan.
  Ms. STABENOW. Mr. President, before my esteemed colleague from New 
Mexico leaves the floor, I commend him for his leadership on the issues 
related to mental health and mental health parity. No one has been more 
of a champion than the Senator from New Mexico on these issues related 
to mental health. I have been pleased since being in the Senate to 
cosponsor those efforts. I congratulate the Senator and urge him on as 
we work to provide mental health parity which is another very important 
health care issue we need to address in the Senate.
  I will speak in general as it relates to this debate regarding 
prescription drug coverage and Medicare. Seeing my friend from Wyoming, 
I commend the Senator from Wyoming, Senator Enzi, who spoke on an 
amendment dealing with community pharmacies which is important to pass. 
I am supportive of it.
  I did not have a chance to say that yesterday and wanted to take a 
moment today to commend him for his work. Part of providing choice for 
seniors is to make sure they can have the same choice from their 
community pharmacy as mail order and a number of other issues dealing 
with the importance of community pharmacies. Congratulations for his 
work in this area.
  I take a moment to speak about my perspective relating to where we 
are and the issues of Medicare and many of the comments I have been 
hearing this morning that I respectfully share a difference on. I 
believe millions of Americans who have benefitted from Medicare have a 
different perspective about the choice of traditional Medicare--
dependability, reliability, ability to choose your own doctor, the fact 
it has been there for our seniors and people with disabilities since 
1965--have a different view versus wading through the insurance 
bureaucracies. There are lots of bureaucracies we can talk about, but 
certainly Medicare is not alone in having a bureaucracy. Anyone who has 
had to wade through insurance forms or attempted to wade through 
questions from our insurance companies certainly would not say that is 
less bureaucratic or less paperwork. I find it interesting to hear 
comments lauding

[[Page S8181]]

the process of working through insurance companies. If you ask anyone 
when they have a claim of any kind whether or not that is a 
streamlined, easy process, usually it is not.
  When I hear about how traditional Medicare does not cover preventive 
services or has not been updated to cover other services, it is very 
important to note that it could. Traditional Medicare can cover 
preventive services. Since arriving in the House of Representatives in 
1997, we have gone from paying for mammograms every other year to 
paying for mammograms every year. We have added other screenings. We 
can continue to do that. There is nothing about prevention that cannot 
be done through traditional Medicare. There is nothing relating to 
coordination that cannot be done through traditional Medicare.
  I am in a fee-for-service health plan myself through Blue Cross/Blue 
Shield, an integrated plan. I am able in a fee-for-service plan to have 
integration. We can do that, if we want to do that, if we want to 
strengthen Medicare. The question is where we want to go with health 
care. If we want to strengthen traditional Medicare, we add preventive 
measures. We do prescription drug benefit within Medicare so it is 
coordinated. We are certainly not adding to the coordinated nature of 
Medicare by saying you can receive an integrated health care approach 
through an HMO or PPO or other plans, but we are going to, instead, 
offer only private insurance if it is available in your community. You 
can't have an integrated approach through traditional Medicare.

  That is a conscious policy choice. It is not that you can't.
  What we are really debating here is the very same debate that we had 
before Medicare came into being. I urge colleagues to go back and look 
at the Congressional Record and read the debate about what occurred 
before 1965. There were two different philosophies. So many years later 
it is interesting to me the very same two philosophies exist.
  One philosophy, at that time, that of my Republican colleagues, is we 
should not have Medicare. It is a big Government program. What we 
should have is private insurance. People should buy from private 
insurance. At that time about half the seniors in the country could not 
find private insurance. Much like today, in many parts of the country 
it was not available to them. Certainly, prescription-only policies are 
difficult to find. Certainly, in Michigan an HMO is hard to find. If 
you live anywhere but metro Detroit, you don't have an option such as 
that. So, much like today, it was not available or not affordable. So 
the decision was made. It was championed by the Democrats in the 
Congress. I am proud of that. They were joined by, I believe, 12 
Republican Members at the time who voted to make the decision, as an 
American value, that we were going to make sure older Americans and 
people with disabilities had access to health care they could afford, 
quality health care, and they would have access to it regardless of 
where they lived in the United States.
  That was an important value statement made in 1965. I think it is 
fair to say it has radically changed and improved the quality of life 
for millions, tens of millions of American citizens, that decision in 
1965.
  Since that time, it is absolutely true that health care has changed. 
Boy, has it changed. There are exciting new things that have happened. 
There are new treatments. There are new miracle drugs. You can take a 
pill instead of having heart surgery. Our esteemed leader of the Senate 
talked about those changes and certainly we all agree with those 
changes.
  The question is, Do we change and improve and strengthen Medicare to 
reflect that, or do we move to a different system? That is a conscious 
choice. We can absolutely do everything that is being talked about here 
through traditional Medicare if we choose to do that.
  Mr. President, 89 percent of the seniors are under traditional 
Medicare; 11 percent have chosen to go into managed care available in 
their area. I share the desire to make sure options are available to 
seniors at their choice.
  But to somehow say we have to abandon the insurance system called 
Medicare that has worked because it is outdated is not accurate. The 
accurate statement is we choose not to update Medicare. We choose not 
to strengthen and modernize Medicare because we want to go back to the 
private sector, private for-profit insurance and managed care. That is 
a conscious choice. I find it interesting that is the very same debate 
that took place when Medicare started.
  Again, there is a difference in philosophy of different parties. I 
believe we have seen the philosophy at work back since the mid-1990s to 
weaken Medicare, so it is easier to criticize. What do I mean by that?

  We had a Speaker of the House, a well-known Speaker back in the mid-
1990s, say we cannot eliminate Medicare directly--I am paraphrasing--
but, instead, we will let it wither on the vine.
  At that time, there was a lot of strong support for going to managed 
care, HMOs, under Medicare. At that time the person who now leads the 
Center for Medicare and Medicaid said there would be a California gold 
rush into managed care. People would be leaving in droves, going to 
managed care because it was so much better than traditional Medicare.
  In fact, that did not happen. In the areas where it did happen, such 
as Michigan--which I have talked about many times on the Senate floor--
we have had over 35,000 seniors dropped because the private HMO made 
the business decision to pull out of the market and not to cover 
Medicare beneficiaries anymore. Those individuals went back into 
traditional Medicare.
  But what happened in the 1990s? We had a balanced budget agreement. I 
believed it was important. I supported that in 1997. But since that 
time, we have seen cuts, very deep cuts, deeper than we were told would 
happen, to providers who cover Medicare beneficiaries, people who 
provide critical home health services, people who provide critical 
nursing home coverage; our hospitals, our teaching hospitals, our 
doctors, nurses, physical therapists--all of those who provide health 
care. We have seen deep, deep cuts.
  We have seen rural hospitals and urban hospitals closing. We have 
seen tremendous cutbacks, more paperwork, less funding. We have seen a 
crisis. Again, this was due to policy decisions to pull money away from 
Medicare, to underfund Medicare. My concern is that essentially 
Medicare has been set up by underfunding it, and then those who do not 
support Medicare saying: See, it doesn't work; not funding preventive 
care and saying: See, we don't fund preventive care. See, it is too 
bureaucratic. All those things could be fixed if there was a commitment 
to Medicare, if there was a commitment to a program that is a great 
American success story.
  Let me just say in conclusion--I see colleagues on the Senate floor I 
know wish to speak--I think it is important in this debate that we be 
very honest with the American people about what the real debate is. It 
is not that Medicare has failed. It is not that Medicare cannot be 
improved upon and modernized. The debate is a philosophical one, an 
ideological one. There is a difference in view where those now in the 
majority believed, before Medicare, and believe now, that we are better 
off with a private for-profit insurance company model.
  I am also deeply concerned when I continue to hear that somehow we 
cannot afford to continue with Medicare anymore because of the 
demographics. I have two points about that. I said this before, but the 
evidence is overwhelming. Medicare's administrative costs are less, and 
they are growing at a slower rate. Its costs are less right now than 
those of managed care HMOs. Every independent study shows there is no 
evidence that when you bring in a private for-profit insurance company 
that needs to make a profit because they are in the private sector, the 
for-profit side of the world, that somehow that brings more money for 
health care--when they have to take a piece of that for administrative 
costs and for profit, and so on. In fact, it is just the opposite. The 
majority of health care in this country, the majority of hospitals, the 
majority of home health agencies and nursing homes are nonprofit so 
that every dollar goes into health care because health care is not an 
option. It is a critical necessity for our people. That is really the 
debate.

  The other piece of the debate is another question of values and 
priorities. We continue to see trillions of dollars

[[Page S8182]]

being given in tax cuts as a priority to a privileged few in this 
country, instead of focusing on shoring up and modernizing health care 
with a real, comprehensive prescription drug benefit, and instead of 
investing in education and innovation in our country to grow the 
economy through greater productivity. These are conscious choices. The 
fact that this is not a very good benefit and the fact we are limited 
in scope is a conscious choice by this body, by this Congress, and by 
this President, which says Medicare and health care is not as important 
as another round, and what will be coming, another round and another 
round of tax cuts for the privileged few of this country.
  I will just say in conclusion that as we speak I believe we need to 
talk about the fact that these are conscious choices being made. I for 
one believe all the evidence shows we can strengthen and modernize and 
update Medicare in a way that our seniors want, need, and deserve.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mrs. DOLE. Mr. President, I rise in favor of a Medicare prescription 
drug benefit. We live in different times now. Thirty-eight years ago 
when the Medicare Program was created, most people were treated in 
hospitals. Many illnesses were untreatable, and the average lifespan 
was shorter than it is today. But we have made great strides since 
then. Today people are living longer, better, and healthier lives. My 
own mother turned 102 years old last month--something perhaps she never 
even imagined. But new medical technologies and advanced drugs have 
made it possible for many of our elderly to live productive lives for 
many years.
  Unfortunately, the high cost of these life-sustaining medications is 
preventing many of our seniors from reaping the benefits of these 
advancements.
  The elderly in my State of North Carolina have been hit particularly 
hard. The State's Division of Aging estimates that one-half of North 
Carolina's residents aged 65 and older have no prescription drug 
coverage.
  As I traveled our 100 counties, I have heard their stories. They are 
cutting their pills in half to make them last longer--a dangerous 
practice that can lead to unanticipated drug reactions. They are 
sacrificing groceries so they have money to buy the drugs they need. 
Even worse, far too many of them are simply going without needed drugs.
  Many of North Carolina's seniors have even been forced to go back 
into the workplace from retirement--often with an ailing condition--
just to earn some income because of prescription drugs.
  I talked last night to a woman in Clayton, NC named Kathy Roberts. 
She retired after 13 years of working at Wal-Mart with dreams of 
spending time with her grandchildren, but a heart condition ran up 
medical costs. Kathy had soon lost $29,000 in savings. She recently 
returned to her job at Wal-Mart for the extra money. But because she is 
only working part time in order to keep her $700 a month Social 
Security check, she is ineligible for the health insurance benefits 
Wal-Mart gives to its full-time employees. Her prescription drugs cost 
$170 each month.

  In Mecklenburg County, officials recently completed a report on the 
status of seniors there. The study found that 45 percent of older 
adults said the high cost of prescription drugs made them decide not to 
take a medicine as frequently as prescribed. Forty percent had not 
purchased a prescription because of costs, and more than 15 percent 
said they put off paying for food, rent, or utilities to buy medicine.
  This is simply not right. Our elderly deserve better treatment. This 
Government made a promise to our seniors when the Medicare program was 
created, and we should keep our promise.
  This year we have our best chance yet to get a prescription drug 
benefit signed into law. It is an opportunity that should not be 
allowed to slip away.
  I have been reviewing the prescription drug plan passed by the 
Finance Committee as well as proposals put forth by other Senators. The 
Finance Committee legislation commits $400 billion over the next 10 
years for a benefit. It is a voluntary program, something I have long 
advocated. But I have concerns. While the legislation adds a drug 
benefit to Medicare, it does not make sufficient changes to strengthen 
and improve an outdated program. None of us want to add a benefit that 
is simply going to send Medicare's bills through the roof as soon as 
the baby boomers retire.
  Just 3 months ago, Government trustees reported Medicare was 4 years 
closer to insolvency than expected. It is projected to start paying out 
more money than it brings in in the year 2013. With Medicare so close 
to the brink of insolvency, shouldn't we look more closely at ways to 
improve this aging program?
  This bill provides a prescription drug initiative--an enormous 
change. But in terms of improving and strengthening Medicare, it simply 
does not go far enough.
  For instance, the bill does not do enough to eliminate the mountains 
of paperwork and red tape that discourage doctors from participating in 
Medicare--100,000 pages of regulations, according to the Mayo Clinic. 
Where is the regulatory reform Medicare so desperately needs?
  There is also a need to provide for more disclosure among our 
pharmacy benefit managers and plans. The Senate should consider 
amendments such as that offered by Senators Enzi and Reed which promote 
greater transparency and require plans to disclose how much of the 
rebates from drug manufacturers are being passed on to consumers. We 
must seek to provide a prescription drug benefit that maintains fiscal 
responsibility, too.
  There are also concerns that this drug benefit will cause private 
insurers to drop coverage. The Congressional Budget Office estimates 
that 37 percent of employers would be inclined to terminate 
prescription drug coverage for retirees. This would shift those 
retirees into the Government-sponsored system and further drive up 
costs of the program. Our Nation cannot afford that. The budget 
is already being stretched because of national security concerns.

  The Senate must ensure this program stays within the cap of $400 
billion over 10 years we agreed to in the budget resolution.
  I intend to spend the next several days listening to the debate and 
further examining proposals. I hope we can find ways to address these 
issues so we can pass a benefit for our seniors this year without 
creating a system that will balloon into a tremendous burden for future 
generations.
  Thank you, Mr. President. I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I call for regular order.
  The PRESIDING OFFICER. The Senator's amendment is the regular order.
  Mr. ENZI. Thank you, Mr. President.


                     Amendment No. 932, As Modified

  Mr. ENZI. I send a modification to my amendment to the desk.
  The PRESIDING OFFICER. The Senator has that right. The amendment is 
so modified.
  The amendment (No. 932), as modified, is as follows:

 (Purpose: To improve disclosure requirements and increase beneficiary 
                                choices)

       On page 57, between lines 21 and 22, insert the following:
       ``(3) Disclosure.--The eligible entity offering a Medicare 
     Prescription Drug plan and the MedicareAdvantage organization 
     offering a MedicareAdvantage plan shall disclose to the 
     Administrator (in a manner specified by the Administrator) 
     the extent to which discounts, direct or indirect subsidies, 
     rebates, or other price concessions or direct or indirect 
     remunerations made available to the entity or organization by 
     a manufacturer are passed through to enrollees through 
     pharmacies and other dispensers or otherwise. The provisions 
     of section 1927(b)(3)(D) shall apply to information disclosed 
     to the Administrator under this paragraph in the same manner 
     as such provisions apply to information disclosed under such 
     section.
       ``(4) Audits and reports.--To protect against fraud and 
     abuse and to ensure proper disclosures and accounting under 
     this part, in addition to any protections against fraud and 
     abuse provided under section 1860D-7(f)(1), the Administrator 
     may periodically audit the financial statements and records 
     of an eligible entity offering a Medicare Prescription Drug 
     plan and a MedicareAdvantage organization offering a 
     MedicareAdvantage plan.

       On page 37, between lines 20 and 21, insert the following:
       ``(C) Level playing field.--An eligible entity offering a 
     Medicare Prescription Drug plan shall permit enrollees to 
     receive benefits (which may include a 90-day supply of

[[Page S8183]]

     drugs or biologicals) through a community pharmacy, rather 
     than through mail order, and may permit a differential amount 
     to be paid by such enrollees.

  Mr. ENZI. Thank you, Mr. President.
  I thank the Senator from North Carolina for her comments about the 
amendment and appreciate her support. I am going to try to convince 
everybody else that support is also warranted.
  I have offered a modified version of amendment 932 to the original 
one yesterday on behalf of myself and my distinguished colleague from 
Rhode Island, Senator Reed. Senators Pryor, Cochran, and Chambliss also 
join us on offering this modified amendment. I welcome their 
cosponsorship and support.
  These modifications ensure the amendment will not add to the cost of 
this Medicare bill, which is a concern I share with Chairman Grassley 
and a great many of my colleagues.
  I thank the Senator from Iowa for his willingness to work with me to 
address the concerns of our seniors and pharmacists.
  The heart of this amendment remains the provisions that would ensure 
fair prices for consumers and fair treatment for local pharmacists 
under a new Medicare prescription drug benefit.
  To ensure reasonable drug prices for seniors, the amendment would 
hold Medicare drug plans and Medicare Advantage organizations 
accountable for passing on to their consumers a fair portion of the 
rebates, discounts, and other incentives the plans may receive from 
drug manufacturers and other sources.
  The amendment would require disclosure of these incentives to the 
Federal Government. It would also clarify that the Government may audit 
the records of these plans and organizations to ensure compliance with 
this disclosure requirement. The amendment would not, however, make 
these disclosures part of the public record. This is certainly not our 
intent. The amendment simply ensures that our corporate partners are 
held accountable for sharing with our seniors the savings they 
generate.
  To ensure fair treatment for the pharmacists in our communities, the 
amendment we are offering would prohibit Medicare drug plans from 
implementing restrictions that would steer consumers to only mail-order 
pharmacies. It would require Medicare drug plans to allow local 
community pharmacists to fill long-term prescriptions--long-term 
prescriptions; not just 30-day ones but 90 days as well--and offer 
other services they are equipped and licensed to provide.
  Seniors trust their local pharmacist, and they should be allowed to 
keep that relationship in place under this bill. This drug benefit 
should not force them to choose a mail-order house when a pharmacist 
who could provide the same or better service is right down the street, 
and they are used to dealing with them.
  This amendment would permit a Medicare drug plan or Medicare 
Advantage organization to charge a different cost for a mail-order 
prescription versus a prescription filled by a community pharmacist. 
This happens today in many health plans. As an example, one health plan 
for Federal employees charges a $10 copay for a 30-day prescription 
filled at a local pharmacy but charges a $20 copay for a 90-day 
prescription filled through a mail order. That is a $10 savings. This 
would allow the local pharmacist to offer the 90-day prescription so 
the consumer could take advantage of the same reduction in copay.
  Under this amendment, Medicare drug plans could still charge 
different copays, but the plans could not prohibit a local pharmacy 
from filling 90-day prescriptions.
  I know some of my colleagues are concerned that seniors may get 
confused. Actually, if they can get through the rest of the bill 
without being confused, they will not be confused by this. But some 
people are concerned that may happen or that they may pay more than 
they should for their drugs. In response, I would say the Finance 
Committee's bill clearly states that seniors cannot be charged more 
than the negotiated price of a covered drug.
  The bill is also very direct in its expectations of Medicare drug 
plans. The bill would require plans to provide clear information about 
copayments and deductibles. This information would have to include 
details on the differences in cost between mail-order and retail 
prescriptions.
  I think seniors and their families are very smart about drug costs, 
and they will take factors, such as different copays, into account when 
they make a health care decision.
  I am sure Medicare drug plans will encourage seniors to use mail 
order, just as health plans encourage us to use mail order. What this 
amendment would do is give seniors the option--the option--to use their 
local pharmacists.

  The bill already requires health plans to give seniors accurate 
information on the costs of their options. From that point, I think we 
should trust seniors and their families to make the decisions that are 
best for them, without arbitrary limitations on services that steer 
seniors in one direction or the other.
  Again, I thank Senators Reed, Pryor, Cochran, and Chambliss for 
joining me in offering this modified amendment. The sponsors of this 
bill appreciate the role local pharmacists play in helping all 
Americans manage their medications, especially the elderly and the 
sick, who need the most advice.
  As I mentioned yesterday, Senator Reed and I worked last week to pass 
a bill to address the pharmacist shortage through the Committee on 
Health, Education, Labor and Pensions. We agreed to work together on 
that bill to ensure our aging population has access to the knowledge of 
pharmacists on how to use a new Medicare drug benefit appropriately and 
safely.
  As highly educated professionals, our pharmacists know how important 
drug therapy is in helping seniors live longer and better lives, and 
they want to support this bill. In fact, many pharmacies and 
pharmacists are supporting, and will support, the bill, in part because 
of this amendment.
  The National Association of Chain Drug Stores and the Food Marketing 
Institute support this amendment. I ask unanimous consent to have 
letters of support printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                     Food Marketing Institute,

                                    Washington, DC, June 11, 2003.
     Hon. Charles Grassley,
     Chairman, Senate Finance Committee,
     Washington, DC.
       Dear Chairman Grassley: The Food Marketing Institute (FMI), 
     on behalf of our supermarket members who operate more than 
     12,000 in-store pharmacy departments throughout the United 
     States, wishes to express our industry's strong support for 
     legislation that you are developing along with Senator Baucus 
     and other members of the Finance Committee that will reform 
     the Medicare program and provide our nation's seniors with a 
     meaningful outpatient drug benefit.
       This bi-partisan initiative embraces a number of very 
     important principles that will promote greater competition in 
     the marketplace and provide more choices for seniors in the 
     delivery of medications through alliances with retail 
     pharmacies, pharmaceutical manufacturers and other entities. 
     Moreover, it is our understanding that the bi-partisan 
     legislation includes provisions that will generate 
     information so that seniors can make informed decisions in 
     terms of selecting a plan that best meets their individual 
     needs for medications.
       FMI is further encouraged that the legislation seeks to 
     ensure that seniors have convenient access to prescription 
     drugs through pharmacy networks and that pharmacies are not 
     placed at risk under this new benefit. Additionally, our 
     industry is hopeful that the bi-partisan bill will clarify 
     that retail pharmacy will be permitted to offer Medicare 
     beneficiaries the option to receive long-term 90-day 
     prescriptions which means seniors will have both convenience 
     and the opportunity to consult with their pharmacist about 
     taking their medications safely and effectively.
       In closing, FMI wishes to commend you on your leadership 
     regarding Medicare reform, and we look forward to working 
     with you throughout the legislative process as Congress moves 
     toward providing seniors with outpatient drug coverage.
           Sincerely,

                                           John J. Motley III,

                                            Senior Vice President,
     Government and Public Affairs.
                                  ____



                                              Ahold USA, Inc.,

                                     Chantilly, VA, June 13, 2003.
     Hon. Charles Grassley,
     Chairman, Senate Finance Committee,
     Senate Hart Office Building, Washington, DC.
       Dear Chairman Grassley: Ahold USA, which operates retail 
     food stores and over 800 pharmacies along the Eastern 
     seaboard under the names of BI-LO, Bruno's, Giant of 
     Carlisle, Giant of Maryland, Stop & Shop and

[[Page S8184]]

     Tops, wishes to express our strong support for legislation 
     that you are developing, along with Senator Baucus and other 
     members of the Finance Committee, that will reform the 
     Medicare program and provide our nation's seniors with a 
     meaningful outpatient drug benefit.
       The bi-partisan initiative embraces a number of very 
     important principles that will promote greater competition in 
     the marketplace and provide more choices for seniors in the 
     delivery of medications through alliances with retail 
     pharmacies, pharmaceutical manufacturers, and other entities. 
     It is our understanding that the bi-partisan legislation 
     includes provisions that will generate information so that 
     seniors can make informed decisions in terms of selecting a 
     plan that best meets their individual needs for medications.
       As a retailer in the marketplace, we are further encouraged 
     that the legislation seeks to ensure that seniors have 
     convenient access to prescription drugs through pharmacy 
     networks and that pharmacies are not placed at risk under 
     this new benefit. We are also hopeful that the bi-partisan 
     bill will clarify that retail pharmacies will be permitted to 
     offer Medicare beneficiaries the option to receive long-term, 
     90-day prescriptions which means seniors will have both 
     convenience and the opportunity to consult with their 
     pharmacist in a timely manner about taking their medications 
     safely and effectively.
       Ahold USA wishes to commend you on your leadership 
     regarding Medicare reform. We look forward to working with 
     you throughout the legislative process as Congress moves 
     toward providing seniors with outpatient drug coverage.
           Sincerely,
     Barry F. Scher,
       Vice President, Public Affairs/Communications.
     John J. Fegan,
       Vice President, Pharmacies.
                                  ____



                                                   Winn Dixie,

                                  Jacksonville, FL, June 11, 2003.
     Hon. Charles E. Grassley,
     U.S. Senate, Senate Finance Committee, Chairman, Washington, 
         DC.
       Dear Mr. Chairman: Winn-Dixie Stores, Inc., operates more 
     than 680 in-store pharmacies throughout the Sunbelt. We are 
     writing to express our support for legislation that you are 
     developing along with Senator Baucus and the Finance 
     Committee Members to reform Medicare and the development of 
     an outpatient drug benefit for our nation's seniors.
       The bill, which has bi-partisan support, will promote 
     competition and provide seniors with more choices of delivery 
     of their prescription medication. Additionally, seniors will 
     be more informed in terms of selecting a plan that will work 
     best for their particular needs.
       Other positive points of significance include:
       Risk is eliminated for pharmacies under the new benefit.
       Convenient access for seniors through pharmacy networks.
       Clarification of retail pharmacy providing 90-day supplies 
     of prescription needs.
       Continued of retail pharmacy providing 90-day supplies of 
     prescription needs.
       Continued pharmacist's consultation with seniors ensuring 
     medication safety and effectiveness.
       In closing, Winn-Dixie salutes your hard work on this most 
     important issue and we look forward to working with you as 
     this most important issue continues to develop.
           Sincerely,
     Randy Hutton,
       Vice President, Director of Government Relations.
                                  ____



                                               The Kroger Co.,

                                    Cincinnati, OH, June 17, 2003.
     Hon. Charles E. Grassley,
     Chairman, Senate Finance Committee, Dirksen Senate Office 
         Building, Washington, DC.
       Dear Chairman Grassley: The Kroger Co., appreciates your 
     leadership and the efforts of Senator Baucus in developing 
     with your colleagues in the U.S. Senate legislation that will 
     reform the Medicare program.
       Kroger is the nation's 7th largest pharmacy provider. We 
     support the Medicare reform legislation because we believe it 
     improves Medicare in several important ways.
       First, we believe having a range of entities that can offer 
     a pharmacy benefit or drug discount card will benefit seniors 
     and all taxpayers.
       Second, it is our understanding the legislation ensures 
     that senior will have access to nonconfidential, summary 
     information gathered from plan sponsors. We believe this 
     transparency will facilitate informed consumer choice.
       Seniors also will benefit from the option of having their 
     90-day, long-term prescriptions filled by their neighborhood 
     pharmacy. The value-added services pharmacists provide are 
     important to the health and well being of our seniors.
       And finally, we appreciate the clarification we understand 
     the legislation contains that pharmacists should not be held 
     responsible for risks they do not manage or control.
       Again, we appreciate your leadership and look forward to 
     working with you and the Senate Finance Committee.
           Sincerely,
     Joseph A. Piohler,
       Chairman of the Board and Chief Executive Officer.

  Mr. ENZI. Mr. President, by ensuring fair prices for seniors and fair 
treatment for pharmacists, we will ensure this new Medicare drug 
benefit does right by seniors and values the trusted relationship that 
pharmacists and their senior patients share.
  This is just a small step to helping community pharmacists. I would 
like to do more, but we are matching that constraint with the 
requirement that there can be no amendment that adds dollars to the 
cost of this bill. So we are staying in that constraint but still 
giving that option for the local pharmacists.
  I ask my colleagues to support this amendment, as modified, and I am 
gratified by all the people who are doing that.


          Amendment No. 944 To Amendment No. 932, As Modified

  Mr. President, I offer, on behalf of Senator Cantwell, a second-
degree amendment to my amendment and send the amendment to the desk.
  I thank Senator Cantwell, who has worked with Senator Reed and myself 
on coming up with this amendment, which also does not add a single 
dollar of additional cost to the pharmacy bill but does provide some 
clarification on how any audits would be done on records to make sure 
that rebates and refunds are going to the proper place.
  The PRESIDING OFFICER. Without objection, the amendment will be 
reported.
  The legislative clerk read as follows:

       The Senator from Wyoming [Mr. Enzi] for Ms. Cantwell, 
     proposes an amendment numbered 944 to amendment No. 932.

  Mr. REID. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

     (Purpose: To prohibit an eligible entity offering a Medicare 
  Prescription Drug plan, a MedicareAdvantage Organization offering a 
MedicareAdvantage plan, and other health plans from contracting with a 
    pharmacy benefit manager (PBM) unless the PBM satisfies certain 
                             requirements)

       On page 2 of Amendment No. 932 between lines 18 and 19 
     strike ``.'' and insert the following: ``with the auditor of 
     the Administrator's choice.''

  Mr. ENZI. I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, before the Senator from West Virginia takes 
the floor, I say to my friend from Wyoming, shouldn't we accept this 
second-degree amendment now?
  Mr. ENZI. Mr. President, I am sure it has been cleared on both sides, 
and I would be more than happy to do that at this time.
  The PRESIDING OFFICER. If there is no further debate on amendment No. 
944, without objection, the amendment is agreed to.
  The amendment (No. 944) was agreed to.
  The PRESIDING OFFICER. The Senator from West Virginia.


                     Amendment No. 932, As Modified

  Mr. ROCKEFELLER. Mr. President, I would like to speak briefly on the 
underlying amendment.
  We are here to consider legislation that is going to create a much 
needed prescription drug benefit. We have been here to consider that 
matter for some years now. We have 41 million seniors and disabled 
people in this country who require and need that benefit. So it is a 
momentous time. It is also a moment of opportunity, which we will 
either grab or not grab, where we can craft a prescription drug benefit 
that provides the coverage seniors desperately need, coverage that is 
both affordable and reliable for all seniors.
  I intend to offer amendments--not now, but later--that will improve 
the proposed coverage and delivery system for the Medicare prescription 
drug benefit so that this bill will better meet the real needs of our 
senior citizens.
  In 1965, this Nation recognized that health care costs were the 
primary reason that one-third of our Nation's seniors lived in absolute 
poverty. With the establishment of a universal health care benefit for 
seniors, financed through both individual payroll tax contributions and 
the General Treasury--the Medicare program--we lifted most American 
seniors out of poverty.
  That is something to be profoundly proud of, but it is the work of 
our predecessors. And now there is work for us

[[Page S8185]]

to do. Medicare is one of America's great achievements, but it has long 
needed to include a prescription drug benefit. At the time Medicare was 
enacted, prescription drugs were not a popular form of treatment. Now 
they are a critical part of health care.
  A Medicare prescription drug benefit is something I have heard 
seniors tell me they want and need almost every time I have ever run 
into them or have had meetings with them in my State. And I daresay the 
Presiding Officer has had the same situation in his State of Kentucky.
  I have worked on this for nearly 2 decades as a Senator, and we are 
perhaps at the point--or perhaps we are not. I don't know. I hope so.
  Fifteen years ago, Congress acted to provide a catastrophic drug 
benefit under Medicare. The fact of the matter is, it was a very good 
bill. I led the fight on this floor three times to defeat repeal by the 
House because it was a very good benefit. There has never been anything 
that approached that in terms of catastrophic drug benefits since that 
time.
  However, seniors did not understand the bill because we did not do a 
good job of putting it out to them, and we passed it perhaps too 
quickly. So the catastrophic benefit was rejected by the very people 
that it was intended to help through the votes of their elected 
representatives.
  We should not repeat that experience. We should do our very best as 
the legislative process moves forward to offer a benefit that will be 
widely welcomed by Medicare beneficiaries and by their families. This 
will be a very hard thing to do, working with only $400 billion, as 
that is not the full cost of what we need. But that is what we have. We 
are operating, therefore, under a very tough budget constraint. I 
understand and accept that. But I think we should keep in mind that if 
we can achieve more than 50 votes for a Medicare prescription drug 
benefit, we might be able to achieve more than 60 votes to pay for a 
strengthened drug benefit. We shall see whether the Senate is able to 
successfully amend this proposal over the next several days, weeks, 
whatever the situation will be.
  For my part, I remain committed to fight to improve the Medicare 
prescription drug benefit that is before us because I know the need is 
tremendous. The average total gross income for the average Medicare 
beneficiary in West Virginia is about $10,800. My guess is for the 
State of Kentucky, it is not a great deal more. It probably is somewhat 
over that, but $10,800 in West Virginia. If they have various kinds of 
internal problems, they may be paying $3-, $4-, $5,000. That doesn't 
give them very much to live on.
  When I talk about this, I think about senior citizens in Mingo and 
Raleigh Counties in West Virginia; Charleston and Weirton, in 
Martinsburg and Parkersburg. They want and expect a prescription drug 
benefit that will meet their needs, and they have that right. I would 
like to believe that 2003 could be another landmark date in the passage 
of Medicare legislation that will improve the basic health of more than 
40 million Americans. But even as I say that, I need to acknowledge 
that there are a few things in this bill that are very troubling to me 
and which may well make the difference between a welcome and sustained 
Medicare drug benefit and a long road of complaints and criticisms from 
the very people we are, in fact, trying to help.
  Let me take a minute to talk about a couple of them. There is a 
substantial gap in coverage under this bill. That gap is about $1,300. 
Under the bill, there will still be times when seniors are paying a 
premium and receiving no benefits whatsoever. We should eliminate that 
coverage gap.
  I fundamentally disagree with the notion that we should pay private 
insurers more than traditional fee-for-service Medicare to deliver a 
drug benefit. Either they are more efficient or they are not. If they 
have marketing costs, well, then that has to be factored in, but there 
is no reason to pay private insurers more than other providers.
  All Medicare beneficiaries should get the same benefit. They should 
pay the same premium, just as they do under Part A or Part B. There 
should not be different benefits or premiums for Medicare beneficiaries 
just because they happen to live in West Virginia or Montana or, on the 
other hand, in New York or California.
  Seniors who don't have access to a private insurer or choose to stay 
in traditional Medicare should be able to still receive additional 
benefits such as a catastrophic limit on their medical expenses. We 
should do our best to make sure that employers do not drop coverage 
because there is not a sufficient incentive for them to continue 
providing this coverage to their retirees. That should not be an 
excuse. We could fix this by allowing employer contributions to count 
toward the out-of-pocket costs seniors currently are paying.

  In addition, I have serious concerns about the fallback in the 
proposal. It is, in my judgment, unstable. Under this proposal, if 
there are not at least two quality bids for plans to serve a region, as 
we all know by now, the fallback moves into place for 1 year. The next 
year, a new bidding process begins. And if two plans show up, the 
fallback disappears. This means seniors, especially seniors in rural 
areas where PPOs and private plans are not likely to come or perhaps 
have not ever been, may end up bouncing between a fall back, then a 
private plan the next year, and then back to a fallback. All the while 
seniors will be forced to change doctors and pharmacists. Their cost 
sharing will be changed, and there will be other changes. This will be 
of profound concern to them, confusing to them. I think it is a 
frightening scenario which takes me back to the catastrophic bill to 
which I referred a few moments ago. I don't think that kind of coverage 
represents a stable, genuine, or guaranteed fallback for seniors.
  Finally, there have been a number of Members on the floor of the 
Senate referring to this as a universal drug benefit. We should all be 
very clear this is not a universal drug benefit. In fact, this 
legislation specifically excludes some Medicare beneficiaries from 
enrolling in the Medicare drug benefit. Those Medicare beneficiaries 
who are low income, 74 percent of poverty or below, and therefore, 
qualify to receive a drug benefit under Medicaid, are excluded from 
enrolling in the Medicare benefit. This is the first time in the 
history of the program that we would prohibit some Medicare 
beneficiaries from receiving a Medicare benefit.
  Not only is it unfair to exclude the poorest seniors from part of the 
Medicare Program, it gives them a bad deal. Prescription drugs are an 
optional benefit under Medicaid. States can and are limiting the number 
of prescriptions. Some States only cover three drugs or charge any 
copayments that they choose to or that they have to. Since 1965, 
Medicare has provided a universal benefit to all of its beneficiaries. 
That has been its magnificent social contract. It is the promise that 
society made to our seniors: If you work and make your payroll 
contributions, then you get Medicare, regardless of where you live, how 
old you are, or what your income might be.
  This legislation--for the very first time in the history of the 
program--would prohibit some Medicare beneficiaries from receiving a 
Medicare benefit. We should provide all seniors with a dependable 
Medicare guarantee of prescription drug coverage. That is what seniors 
expect when we tell them we are giving them a Medicare drug benefit. 
And we should make sure that they have a drug plan they can always 
count on, even if some believe private plans are the future of the 
program.
  I have a word on the pending Daschle amendment. The current Senate 
plan offers no protection against varying premiums. The estimate that 
is given, $35 as an average premium, is precisely that. It is an 
estimate. The proposed legislation gives PPOs broad discretion in 
assigning premiums. Senator Daschle's amendment will limit variations 
in the amount the beneficiaries have to pay to only 10 percent above 
the national average, no matter where they live. So it does not limit 
the amounts plans could charge as a whole; i.e., the total premium. It 
would also not prevent lower premiums.
  Stable premiums limit seniors' cost of liability and complement the 
provisions of the fallback plan. Stable premiums increase the safety 
net for seniors in geographic regions where private insurers are less 
likely to offer affordable coverage. This amendment is especially 
important for seniors who

[[Page S8186]]

live in rural areas because it is in rural areas where private insurers 
are more likely to charge higher premiums to offset the increased costs 
associated with benefit deliveries.
  Stable premiums do not inhibit competition. Instead they increase the 
safety net for seniors. Beneficiaries in rural areas, such as West 
Virginia, are often older and sicker. Competition among private 
insurance plans in these areas is likely to be less under any 
circumstances. Seniors' ability to plan for prescription drug 
expenditures within their limited budgets hinges upon a great degree of 
certainty. That is what seniors depend on. Their ability to have this 
assurance should not be decided by private HMOs, who respond to market 
forces and attempt to correct deficiencies by varying and fluctuating 
premiums. Seniors should not have to wait and see what private 
insurance companies are going to charge them from year to year.

  I support Senator Daschle's amendment. He is working to pass a 
Medicare package--as we all are--that works for all Medicare 
beneficiaries no matter where they live.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Talent). The Senator from Nebraska is 
recognized.
  Mr. NELSON of Nebraska. Mr. President, I appreciate the opportunity 
today to speak regarding the Daschle amendment. First, I want to 
commend my colleagues from Iowa and New Mexico, Senator Grassley and 
Senator Baucus, for doing truly an outstanding job with putting 
together a package of legislation to deal with the challenges we have 
all met and continue to sort out relating to prescription drug coverage 
for seniors. I commend them for an outstanding effort.
  In the midst of that commendation, I think--and others would admit--
that the pending legislation can be improved. I have yet to see a piece 
of legislation that could not have some amendment that at least some 
people would think would be an improvement.
  In this particular situation, I think the area that we could improve 
is in making sure the rate differentials among the States is not 
extraordinary. Therefore, the Daschle amendment sets a 10 percent 
variation of the national average, so that a State would not have a 
rate that would be 10 percent above what that national average is. What 
this provides is protection that the rate differential between States 
such as New York and Nebraska are not going to vary more than 10 
percent.
  We all recognize if insurance is a focus to provide protection and 
stabilize across a broad base of individuals, to spread the costs and 
risks over that entire group of individuals, you will then have a rate 
that would be based on that spreading of the risk. This particular 
situation seeks to do that, but the spread of the risk seems to be more 
directed on a statewide basis, therefore giving the opportunity for a 
wide variation of rates between two States on a nationwide basis.
  I think this amendment will correct that and will assure that people 
living in whatever State they may reside are not going to be paying a 
substantially higher rate than other individuals.
  The proposed prescription drug plan promises an average premium of 
about $35 a month. But we cannot be sure that is a guarantee because 
just in the case of Medicare, managed care, Medicare+Choice, there is 
no set premium under the new prescription drug proposal. So all 
premiums will vary nationwide. Experience suggests that premiums could 
significantly--as they do with premiums for Medicare HMO plans--vary 
from $99 a month in Connecticut to $16 a month in Florida. Floridians 
might enjoy that, but residents of Connecticut might ask a question as 
to why we cannot have a balanced rate nationwide with variations of a 
much smaller amount.
  Spreading the risk is what insurance is all about. I think spreading 
the risk in this case involves spreading the costs as well. I think I 
speak for many of my colleagues when I say we want to have a 
prescription drug benefit that is well balanced, meets the needs of 
those who are the neediest and the sickest, but provides a fair amount 
of coverage for all American seniors who qualify. It is my duty to make 
sure that what we provide, whether for Nebraskans or Floridians, is 
truly a spread of the risk and cost. We need to ensure that the 
premiums are priced both fairly and equitably and that geographic 
concerns don't price seniors out of the market for coverage in any 
location. That is what I think we must find as the focus as we move 
forward.
  So, again, I commend my colleagues for putting together an 
outstanding package of benefits given the very difficult task of making 
the ends meet with $400 billion, but with needs that could exceed that 
several times over, putting together a package that I think truly 
represents what will take care of the prescription drug needs of our 
seniors. At the same time, we want to make sure the protection is also 
there against a wide disparity of rates from State to State. So I speak 
today on behalf of the Daschle amendment. I hope the people within this 
body will look at that and think about that in terms of their own 
States--not as to whether their State will get a better deal than 
others but where we all have an opportunity for an excellent deal and 
that the variations will be minimal at best.
  I thank the Chair and I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, I note that the managers are not on the 
Senate floor at this moment. I had visited with Senator Reid before the 
Democratic Policy Committee luncheon, and he indicated the floor would 
be open for an amendment. I have an amendment I wanted to offer. It 
deals with reimportation. I am ready to offer that. The amendment is 
written, and I have been told that they are looking for amendments. 
This is ready to go. If we are not able to offer it now, the question I 
ask is when are we able to offer it?
  Can we sequence it so I may have an understanding as to when I may 
offer it this afternoon?
  The issue of reimportation is one that relates to this legislation 
because it relates to the issue of the cost of prescription drugs. I 
will want to offer this on behalf of myself and Senators Stabenow, 
Jeffords, Snowe, Johnson, Levin, and Boxer. I don't want to tie up the 
Senate for any great length of time. I think this is important, and I 
would like to speak on it. I expect a number of colleagues would like 
to speak on this amendment as well. It makes sense to me to have it 
considered, and then I will make a presentation, and then it can be set 
aside so others can make presentations.
  I understand we have three additional amendments that are now pending 
and on which we will likely have a vote, perhaps midafternoon. I don't 
know exactly the whereabouts of the committee chairman or ranking 
member. They are not on the floor. I shall not ask for unanimous 
consent, but I would like to, as soon as they return, be able to query 
them so I can understand where I fit in this mix. As I indicated 
yesterday and today, I have continued to hear that they want amendments 
offered, and they want to move through these issues as quickly as 
possible. I am ready. Several of my colleagues would like to speak on 
this as well and are ready to do so. I will wait at this moment until 
the chairman and ranking member come back. I will make the inquiry of 
them as to when I might be sequenced. I would like to be recognized to 
offer this amendment this afternoon--the earlier the better.
  At the moment, I will relinquish the floor. I am tempted to ask 
unanimous consent, but I shall not in recognition that the chairman and 
ranking member will want to find some order. I will relinquish the 
floor with the expectation of being able to query them on the floor 
when they return.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. HARKIN. Mr. President, to follow the remarks of my colleague from 
North Dakota, I, too, have an amendment I would like to lay down. It is 
a very short amendment. It would not require a great deal of debate and 
discussion. I hope it would have widespread support. It has to do with 
mammography screening under Medicare, and the fact that we have a dual 
system now for that screening. They are reimbursed at a certain rate.
  For diagnostic mammographies, they are reduced to a lower rate. What 
we find is when a woman who is Medicare

[[Page S8187]]

eligible who gets screened for breast cancer and, under the screening 
mammography, there are some indications possibly that she might have 
breast cancer, she now needs to get a diagnostic screening. The waiting 
time is up to 6 months because the rates are so low for the 
reimbursement for diagnostic screening of mammographies.
  What we have done is put women in this very terrible position. They 
get screened and there is some indication they might have breast 
cancer, and yet they then cannot get the diagnostic screening they 
need.
  What my amendment would do, basically, is increase the technical 
portion of diagnostic mammograms performed in hospital-based facilities 
by removing this procedure from the ambulatory payment categories and 
placing it in the Medicare fee schedule. The Medicare fee schedule 
reimburses at a higher rate than the ambulatory payment categories. The 
change would result in roughly a 13-percent increase for unilateral 
diagnostic mammograms and roughly a 39-percent increase for bilateral 
diagnostic mammograms.
  As I have said, under these two repayment categories, screening 
mammographies are already in the Medicare fee schedule, but the 
diagnostic mammograms are still in the ambulatory payment category. 
This amendment would put the diagnostic screening in the same position 
as the screening.
  Medicare officials estimate that more than half of all women who are 
Medicare beneficiaries receive their breast cancer screenings in a 
hospital-based facility. Unfortunately, due to the low Medicare 
reimbursement rates for the diagnostic screening, over 700 hospital-
based mammography facilities have closed in the last 2 years simply 
because the reimbursement rates are so low. As a result, waiting times 
for hospital-based mammograms covered by Medicare can be several months 
in many parts of the country. These delays can have significant 
clinical implications for fighting breast cancer.

  Again, what my amendment would do is correct the problem by 
increasing the reimbursement for the diagnostic mammograms. I point out 
again why this is necessary. Women receive diagnostic mammograms 
following the screening mammograms if there is a suspicious finding.
  Imagine that you had a screening--put yourself in a woman's shoes--
and they said there is some suspicion there, but because there are no 
local hospital-based mammography facilities--they have closed down--you 
may have to wait weeks or months to get your diagnosis definitively 
confirmed or denied. As these facilities close, there are fewer places 
for women to get mammograms.
  When you consider that approximately 1 million additional women per 
year become age eligible for these mammogram screenings, it is easy to 
see we have an access problem. Moreover, because radiologists use and 
train at these hospital facilities, they find it difficult to sustain 
their mammography practices, and fewer and fewer of them are being 
trained.
  Again, it is a very simple, straightforward amendment. I would like 
to ask that the pending amendment be set aside, but I am not going to 
do that. As the Senator from North Dakota pointed out, the managers are 
not in the Chamber. It seems to me we are trying to move this process 
along, and we have amendments we could offer and have a short debate, 
have a vote or have them accepted. We are standing here not being able 
to move the process along.
  Mr. DORGAN. Mr. President, will the Senator from Iowa yield for a 
question?
  Mr. HARKIN. I will be delighted to yield to my colleague from North 
Dakota.
  Mr. DORGAN. I know what is going to happen. When we get into mid next 
week, late next week, as we try to finish this bill, there is not going 
to be enough time to offer these amendments and to debate these 
amendments. That is why, it seems to me, right now it is in our 
interest to lay these amendments down, have the discussion on the 
amendments, and then proceed.
  I mention to the Senator from Iowa, there is a second amendment I 
have--I have not offered it, but I have talked to the staff about an 
amendment that sounds similar to the amendment Senator Harkin 
described, and that is on the issue of cholesterol screening.
  If you have heart disease and have cholesterol screening for that 
heart disease, it is covered under Medicare. But if you do not have 
heart disease and the screening is to determine whether you have heart 
disease, it is not covered. It seems to me the best way to promote 
wellness and the appropriate way to deal with the reimbursement for 
these issues, especially something such as cholesterol screening, would 
be to cover cholesterol screening, especially if the cholesterol 
screening is to determine whether someone has heart disease, not just 
cover in the circumstance you know they have heart disease. It seems to 
be a similar circumstance to the situation the Senator from Iowa 
was describing.

  I am told the chairman and ranking member are off the floor working 
on this bill. When they come back, I hope to inquire of them. My desire 
would be to be the next Democratic amendment. I know the Senator from 
Iowa wishes to have his amendment considered. It behooves the Senate 
and those managing this bill to put us in line, let us offer amendments 
and move them through, so that by late next week we are not in a 
circumstance where we are told: We have to finish this bill; we do not 
have to time to consider your amendment.
  I thank the Senator.
  Mr. HARKIN. Mr. President, I think the Senator has laid out exactly 
the format. We know the crunch is going to come next week because at 
the end of next week begins the July 4 recess period. They are going to 
go around asking, Can you drop your amendment; drop your amendment; we 
have to get out of here.
  Here we are ready to go with amendments that I think are meaningful. 
The Senator from North Dakota has a meaningful amendment. The one on 
cholesterol screening sounds meaningful. These are important life-and-
death issues for a lot of people out there, as mammogram screenings for 
women are.
  These are not amendments that are going to require a long time to 
debate. As a matter of fact, in the length of time I have stood here, I 
probably could have offered my amendment, had it debated, and started a 
vote on it or had it accepted. I hope we will move along.
  Mr. President, parliamentary inquiry.
  The PRESIDING OFFICER. The Senator will state his inquiry.
  Mr. HARKIN. Will the Chair please advise at least this Senator what 
is pending at the desk right now? What is the pending business before 
the Senate right now?
  The PRESIDING OFFICER. The pending question is the Enzi amendment, as 
modified and amended. There are also two other amendments pending.
  Mr. HARKIN. Further parliamentary inquiry: There are three amendments 
pending, and the one that is now before the Senate is the Enzi 
amendment.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. HARKIN. The Senator assumes then the other two amendments--I am 
sorry, I forgot what they are--a unanimous consent agreement was 
entered to set them aside to consider the Enzi amendment.
  The PRESIDING OFFICER. The Enzi amendment was the first amendment 
called up, and consent was obtained to set the Enzi amendment aside, 
first for the Bingaman amendment and then for the Daschle amendment. 
Then Senator Enzi called for the regular order, which brought the 
amendment back before the Senate.
  Mr. HARKIN. The pending business is the Enzi amendment. As I said, 
with comity with respect to the fact the managers are not here, I will 
not ask unanimous consent to set the Enzi amendment aside to offer my 
amendment. When they come back, I hope we can do so.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I understand there are some issues as to 
who is in line and how this is going to proceed. I will simply express 
what I hope will occur and what I believe is the general understanding, 
at least amongst a number of Senators, and that is that the next 
amendment to be offered is a Republican amendment. We

[[Page S8188]]

have been alternating back and forth. The amendment that would be 
offered would be the amendment sponsored by myself, Senator Schumer, 
Senator McCain, and Senator Kennedy, which deals with generic drugs. We 
would agree to an hour of debate, no second degree, and then a vote on 
that amendment.
  I would ask unanimous consent for that now, but I understand there is 
one Senator from the other side who may have an issue. So we want to 
wait for that.
  As long as we are waiting and not doing much, I will talk a little 
bit about this amendment and then hopefully that will even lessen the 
time that has to be dedicated to it once we get to it.
  This amendment which will be brought forward by myself, Senator 
Schumer, Senator McCain, and Senator Kennedy, is very important 
legislation. It is not specifically on the Medicare issue but it is 
certainly specifically on the issue of how we make affordable drugs 
more available to people in this country by making available to people 
in this country drugs which are of a generic form which therefore cost 
less and are more affordable.
  This has been an issue that has been before the Senate before. It has 
been debated. As a matter of fact, a bill offered by Senator McCain and 
Senator Schumer passed the Senate by a rather large vote. I did not 
support it at the time. However, we have taken the issue back. We have 
sat down. We have worked very hard with all the different people who 
are concerned about how we should proceed in this very critical area of 
getting drugs out to consumers at a more reasonable price, and we have 
now worked out this understanding with legislation which passed out of 
the Health, Education, Labor and Pension Committee, which I have the 
honor to chair and Senator Kennedy is the ranking member. It passed out 
of that committee unanimously.
  The reason it passed out unanimously obviously is because after a 
great deal of consideration we were able to reach an accommodation that 
works rather well in addressing this issue.
  The basic theme of this bill is really quite simple. No. 1, we want 
to make generic drugs more available to consumers on a faster 
timeframe, which therefore gives them lower cost drugs. At the same 
time, we want to continue to encourage innovation, especially in our 
brand-name companies, which are the ones that create the drugs to begin 
with. Without their creativity and research, we would not have a 
generic industry because there would not be any underlying drug from 
which to develop the generic. So we do not want to chill innovation. 
Rather, we want to accomplish both goals, and to some degree the goals 
pull at each other.
  The third thing which I was concerned with was that we not set up a 
massive atmosphere of litigation, that we not create a minefield of 
litigation through which people have to pass before they are successful 
in getting the generics to the market or fight getting the generics to 
the market, having a definitive decision in both of those areas.
  This bill does that. It accomplishes those three goals. I think it 
does as well as can be expected in the context of the different forces 
pulling at the issue.

  It builds upon the underlying law, which is the Hatch-Waxman law, 
which was extraordinarily good legislation put together by Senator 
Hatch on our side of the aisle and Congressman Waxman across the 
hallway, which basically created the first attempt at settling out the 
issue of how generics get to the market in a prompt way while still 
maintaining innovation.
  Over the years, Hatch-Waxman, as with much legislation, was put under 
the microscope of the attorneys and the creative folks who work for 
various entities involved in this issue. As a result, it developed 
cracks. We found that in some instances the system was being gamed and 
in some instances simply misdirected. As a result, it wore down over 
time and there were corrections that needed to be made. That is what 
the purpose of this bill is, to correct the problems we saw that were 
occurring.
  At the same time we moved this legislation forward, the 
administration was moving forward with its own initiative in this area 
dealing with a 30-month stay issue, which is the technical part of this 
bill. They have now put out a rule in this area. The rule is fairly 
close to where we end up with the legislation. As a practical matter, 
the administration could not go as far as they wanted. And when I am 
talking of the administration, I am speaking of the FDA, the Food and 
Drug Administration. They could not go as far as they wanted to go 
because they were restricted by the fact they were working within the 
framework of regulatory requirements, but because we are working in a 
legislative atmosphere we can go much further, and we have. We have 
addressed not only the issue of the 30-month stay, we have addressed 
the issue of the 180-day questions which were raised. We have addressed 
the issue of listing, of how we handle the orange book and a variety of 
other issues, including patent extension, the changing of labels, 
coloring of pills, and things like that which became an issue of 
whether they were actually substantive changes or attempts simply to 
avoid having the generics come to the market.
  Our bill goes considerably further than the rule the FDA has put in 
place. In my opinion, it is a very substantive improvement over the 
proposal which came through this body last year, and although it 
passed, it never became law. That is why it has garnered very 
bipartisan support.
  I note the amendment I am going to be offering is cosponsored. The 
original sponsors are from last year, Senators Schumer and McCain, who 
designed this bill, joined by myself and Senator Kennedy, the chairman 
and the ranking members of the committee, Senator Roberts, Senator 
Edwards, Senator Collins, Senator Leahy, Senator Johnson, Senator 
Feingold, Senator Harkin, and Senator Kohl. I know other Members have a 
deep interest in this bill and will probably want to cosponsor this 
amendment also.
  With that being said as an introduction to the issue, hopefully we 
can move to it as soon as we reach an accommodation with all of those 
parties who have other issues floating around.
  I will yield the floor unless the Senator from Oregon has a question?
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. If I could pose a question to the Senator from New 
Hampshire and the Senator from New York, who has been very gracious in 
indicating that he has been in support of what I want to do. Last week 
I made public a report from the General Accounting Office involving 
Taxil, which is the biggest selling cancer drug in history. This drug 
was developed largely by the taxpayers, with everything for support 
from the Pacific yew tree, which grows in my home State of Oregon, all 
the way to the work done at the National Cancer Institutes by Federal 
researchers, and has produced $9 billion in sales for Bristol-Myers 
with the Federal Government getting a return of about $35 million, 
about one half of 1 percent on the biggest selling cancer drug in 
history.

  In this report, the General Accounting Office documents that the 
Federal Government basically dropped the ball. Without going to price 
controls and regulations and things of this nature, with some modest 
steps, the Federal Government could have stood up for the taxpayers and 
the patients who cannot afford the medicine and gotten the drug to 
market quickly and also taken steps to make it affordable and to 
protect the taxpayers. It is my desire, as somebody who has worked on 
these issues often with the Senator from New Hampshire for many years, 
to work out a bipartisan agreement where the National Institutes of 
Health would simply consider affordability when it enters into these 
agreements. It would not have to do anything prescriptive but would 
also have to look at affordability. I do not want in any way to hold up 
the work of the Senator. I think what he and the Senator from New York 
have done is very helpful, but I would have to object now if we could 
not get an agreement to at least at some point in this take a very 
modest step and ask that the question of affordability be considered 
when the National Institutes of Health enters these agreements, given 
the fact that basically patients on this particular drug, which has 
been the biggest selling cancer drug in history, cannot afford it and 
taxpayers got very little in return.

[[Page S8189]]

  Would that be acceptable to the Senator from New Hampshire? If I did 
not object at this point, would the Senator from New Hampshire work 
with me so at some point later in this discussion we could get a 
bipartisan agreement on a very modest step that affordability be 
considered in these agreements? Is that acceptable to the Senator from 
New Hampshire?
  The PRESIDING OFFICER. The Senator from New Hampshire has the floor.
  Mr. GREGG. First, I was very impressed with the report the Senator 
was able to get out of the public domain. It was a report that raised 
very serious issues. The fact is it appears somebody dropped the ball 
somewhere in the process. We should have gotten a better return for the 
taxpayer than we got on this drug.
  The Senator is approaching an issue which needs to be addressed. I am 
happy to work with the Senator to try to address it. I cannot say 
unilaterally I can agree to the terms, but I will work throughout the 
day and tomorrow and have our staffs work to try to come up with 
language that gets to the Senator's purpose to make sure, when this 
research is done by NIH or other Federal entities, that research 
receives a fair return to the taxpayer. I was rather surprised we did 
not in that instance. I am happy to work with the Senator.
  On this amendment, there is an agreement between myself and the other 
primary sponsors that we will not have second-degree amendments because 
we worked hard to get to this point.
  Mr. WYDEN. Mr. President, the Senator from New Hampshire is being 
very gracious. On the basis of his statement that he would work with me 
on it--what the Senator from New Hampshire and Senator Schumer have 
accomplished is very important. I reiterate how important it be done at 
this time. It is one thing when drugs are developed with private sector 
money. It is a free enterprise system. Fortunately, investors take 
risks. There are some gushers, some that are not profitable. It is a 
different story when the drugs get to market with taxpayer money. Here 
we have the largest selling cancer drug in history.
  It is imperative over the next day or so we work in a bipartisan way. 
The National Institutes of Health does phenomenal work. I don't want to 
do anything to impede their mission in getting drugs to market quickly. 
That is their first and foremost obligation. But let us also make sure 
when they sit down and enter into these agreements, they also try to 
make sure the drugs are affordable. It is one thing to get the drugs on 
the shelf, and it is another to not have the patients able to afford 
them.
  On the basis of the pledge of the Senator from New Hampshire to try 
to work this out with me in the next day or so in an agreeable fashion, 
I do not intend to object. I want to see the amendment of the Senator 
from New Hampshire and the Senator from New York go forward. I will 
work with the Senator from New Hampshire when he completes this 
important amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I appreciate the Senator from Oregon. His issues are 
legitimate. I certainly hope we can work this out and include it in the 
bill. It is an appropriate place for it.
  I now ask unanimous consent, regarding the amendment Senator Schumer, 
I, Senator Kennedy, and Senator McCain will offer relative to generics, 
that we have 1 hour of debate equally divided and there be no second 
degrees and the yeas and nays be considered as ordered on the 
amendment.
  The PRESIDING OFFICER. The Chair informs the Senator, the Senator 
cannot order the yeas and nays by unanimous consent.
  Mr. BAUCUS. Reserving the right to object, I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The Senator from New Hampshire has the floor.
  Mr. GREGG. Mr. President, 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. GRASSLEY. Mr. President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent the pending 
amendments be set aside and that Senator Gregg be recognized in order 
to offer an amendment regarding generic drugs, with no second-degree 
amendment in order to the amendment; further, that there be 60 minutes 
equally divided for debate prior to the vote in relation to the 
amendment; provided further that at 3:45 today the Senate proceed to a 
vote in relation to the Enzi amendment, No. 932, as amended, with no 
other amendments in order to the Enzi amendment. I further ask that 
following that vote there be 10 minutes equally divided for debate 
prior to a vote in relation to the Daschle amendment, No. 939, again 
with no second-degree amendment also in order prior to the vote. 
Finally, I ask consent that following that vote, the Senate proceed to 
a vote on the Gregg amendment, with no intervening action or debate, 
and 2 minutes equally divided prior to the vote.
  I further ask consent that following disposition of the Gregg 
amendment, the next sequence of amendments be the following: Senator 
Dorgan, Senator Grassley, and Senator Harkin, and these would be first-
degree amendments.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. Reserving the right to object, I wonder if we could get 
some time to explain the amendments.
  The second two votes will be 10-minute votes? I ask consent they be 
10-minute votes, not the ordinary 15.
  The PRESIDING OFFICER. Does the Senator object?
  Mr. GRASSLEY. I amend my consent request accordingly.
  The PRESIDING OFFICER. Is there objection? The Senator from Nevada.
  Mr. REID. Reserving the right to object, as the manager of the bill 
said, there will also be 2 minutes equally divided before each vote?
  Mr. GRASSLEY. That is in my request.
  The PRESIDING OFFICER. Is there objection? The Senator from North 
Dakota.
  Mr. DORGAN. Reserving the right to object, and I shall not object, is 
it my understanding the vote on Gregg-Schumer is the third rollcall 
vote in sequence, and following the disposition of that vote I will be 
recognized to offer an amendment?
  Mr. GRASSLEY. Yes.
  Mr. DORGAN. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New Hampshire.


                           Amendment No. 945

  Mr. GREGG. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New Hampshire [Mr. Gregg], for himself, 
     Mr. Schumer, Mr. McCain, Mr. Kennedy, Mr. Roberts, Mr. 
     Edwards, Ms. Collins, Mr. Leahy, Mr. Johnson, Mr. Feingold, 
     Mr. Harkin, and Mr. Kohl, proposes an amendment numbered 945.

  Mr. GREGG. I ask unanimous consent the 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. GREGG. I yield 5 minutes to the Senator from Arizona, who is one 
of the original creators of this legislation and has done such 
extraordinary work in this area.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I thank Senator Gregg for his leadership 
on this legislation. I thank him for reaching out to Senator Schumer, 
Senator Kennedy, and myself to resolve issues that are important. He 
recognized the problem existed and worked to ensure loopholes in the 
system are closed and consumers have access to the best and most 
affordable medicines. Senator Gregg's leadership enabled the 
expeditious introduction and successful committee markup of this 
legislation. Under his chairmanship, the bill was reported out by 
unanimous consent last Wednesday.
  Senator Kennedy's support of this measure must also be recognized. 
His

[[Page S8190]]

experience and technical expertise have been invaluable throughout the 
process. Staffs of all three of these Senators have worked 7 days a 
week for the last few weeks to ensure that the language we have crafted 
is as technically sound as possible without unintended consequences.
  I also thank my friend, Senator Schumer, with whom I have enjoyed 
working over the last few years. His dedication to American consumers 
and his commitment to restoring fairness to the drug industry must be 
commended time after time.
  This amendment will enhance competition and restore a level of sanity 
in the pharmaceutical market. The amendment closes loopholes in the 
current food and drug laws that allow brand pharmaceutical companies to 
protect themselves from generic competition by unfairly extending drug 
patent life, maximizing company profits on the backs of American 
consumers.
  This amendment ensures that lower cost generic drugs will get to 
market faster and with more competition, allowing substantial savings 
for both consumers and taxpayers. With this measure, we are one step 
closer to the larger goal of providing better access to affordable 
health care for all Americans.

  Several years ago, my good friend, Senator Schumer, and I began this 
effort when we introduced the first Greater Access to Affordable 
Pharmaceuticals Act in the fall of 2000. I joined Senator Schumer then 
in order to put a stop to the anticompetitive actions in the 
pharmaceutical industry that artificially inflate prices and keep lower 
cost prescription drugs out of the hands of American consumers. I am 
here today because those loopholes remain.
  Last summer, when the Senate was mired in partisan gridlock debating 
a Medicare prescription drug benefit, the later version of the bill was 
used as a vehicle for Medicare debate. Although the Senate failed to 
pass a Medicare prescription drug benefit package last summer, the GAAP 
Act passed by an overwhelming margin of 78 to 21. That bill set 
consumers on course to save an estimated $60 billion over 10 years, 
while providing seniors and all Americans with access to more 
affordable prescription drugs. Unfortunately, after our astounding 
victory for consumers, the bill was not subsequently passed or even 
considered by the other body.
  Today, we are once again debating Medicare prescription drug 
benefits. We have before us a plan that is estimated to cost a minimum 
of $400 billion over the next 10 years but will surely cost 
substantially more upon implementation. Unlike the majority of the 
amendments that have been and will be considered during this debate, 
the amendment we are offering will not cost the taxpayers a dime. In 
fact, it will save money for both the Federal Government and American 
consumers.
  The amendment is the result of a carefully crafted bipartisan 
compromise, which Senators Schumer, Gregg, Kennedy, and I reached 
several weeks ago. This amendment achieves the same goals Senator 
Schumer and I have been striving to achieve over the last few years. It 
closes loopholes in the law, encouraging competition, without 
sacrificing incentives for innovation, while discouraging 
anticompetitive behavior on the part of brand or generic drug 
companies.
  Of the many elements contributing to the rapid growth in our Nation's 
health care costs, the rising costs of prescription drugs is one of the 
most significant. This year alone, prescription drug costs are expected 
to rise by 19 percent.
  I ask my friend from New Hampshire if he would yield me an additional 
4 minutes?
  Mr. GREGG. I yield the Senator from Arizona such time as he may need.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. I thank my friend from New Hampshire.
  I want to repeat that comment. This year alone, prescription drug 
costs are expected to rise by 19 percent. Today, this morning, in New 
York, New Hampshire, Massachusetts, and Arizona, seniors are getting on 
a bus--in the case of Arizona, to drive to Mexico; in the case of New 
Hampshire, Massachusetts, and New York, to go to Canada--to buy their 
prescription drugs. Most times these prescription drugs are fine. Most 
times they are exactly what they are advertised to be. But sometimes 
they are not. That is because these seniors who are having to get on 
the bus to go to Canada or Mexico simply cannot afford to go to their 
local druggist and get the prescription drugs that they very badly 
need--many cases in lifesaving situations.
  Skyrocketing health care costs have left many businesses struggling 
to provide coverage for their employees and an increasing number of 
Americans without any health insurance. Consequently, access to 
affordable prescription drugs represents one of the most serious 
problems facing our Nation's health care system today. Not isolated to 
one segment of society, this issue affects individuals, families, 
companies, and the like.
  The financial burdens associated with rising prescription drug costs 
have left many companies struggling to provide employees with health 
care coverage. This January, workers at General Electric staged a 2-day 
strike over increased copayments for prescription drugs covered under 
the company's insurance plan. General Motors, one of the largest 
providers of private sector health care coverage, spends billions of 
dollars a year on workers, retirees, and their dependents, over $1 
billion of which is on prescription drugs alone. Even with aggressive 
cost-saving mechanisms in place, General Motors' prescription drug 
costs continue to rise between 15 percent and 20 percent per year.
  Given the crises in both corporate America and our Nation's health 
care system, anticompetitive behavior in the marketplace is 
particularly onerous. Such abuse simply has no place in our health care 
system. My intention in supporting this amendment is not to weaken 
patent laws to the detriment of the pharmaceutical industry, nor is it 
to impede the tremendous investments they make in the research and 
development of new life-sustaining drugs. The purpose of the underlying 
legislation is to close loopholes in the Hatch-Waxman Act, which 
established the generic drug industry we know today, and to ensure more 
timely access to generic medications. This is an important distinction 
which must be made clear.

  Nonetheless, to believe that patent laws are not being abused, is to 
ignore the mountain of testimony from consumers, industry analysts, and 
the Federal Trade Commission (FTC). Over the past three years several 
Senate and House committees have heard testimony regarding the extent 
by which pharmaceutical companies, including generic manufacturers, 
engage in anti-competitive activities and impede access to affordable 
medications. During a hearing at the Senate Commerce Committee, 
Chairman Muris of the FTC testified that:

     [in] spite of this remarkable record of success, the Hatch-
     Waxman Amendments have also been subject to abuse. Although 
     many drug manufacturers, including both branded companies and 
     generics, have acted in good faith, some have attempted to 
     ``game'' the system, securing greater profits for themselves 
     without providing a corresponding benefit to consumers.

  The intent of the Hatch-Waxman Act was to address the escalating 
costs of prescription drugs by encouraging generic competition, while 
at the same time providing incentives for brand name drug companies to 
continue research and development into new and more advanced drugs. To 
a large extent, Hatch-Waxman has succeeded in striking that difficult 
balance between bringing new lower-cost alternatives to consumers, 
while encouraging more investment in U.S. pharmaceutical research and 
development in the pharmaceutical industry has increased exponentially. 
Unfortunately, however, some bad actors have manipulated the law in a 
manner that delays and, at times, prohibits generics from entering the 
marketplace.
  I believe that this amendment will improve the current system while 
preserving the intent of Hatch-Waxman. This legislation is not an 
attempt to jeopardize the patent rights of innovative companies, nor 
does it seek to provide an unfair advantage to generic manufacturers. 
Rather, the intent of this amendment is to strike a balance between 
these two interests so that we can close the loopholes that allow some 
companies to engage in anti-competitive actions by unfairly prolonging 
patents or eliminating fair competition.

[[Page S8191]]

In doing so, we offer consumers more choice in the marketplace.
  It is imperative that Congress build upon the strengths of our 
current health care system while addressing its weaknesses. This should 
not be done by imposing price controls or creating a universal, 
government-run health care system. Rather, a balance must be found that 
protects consumers with market-based, competitive solutions without 
allowing those protections to be manipulated at the consumers' 
expense--particularly senior citizens and working families without 
health care insurance.
  I want to thank my friend, Senator Schumer, with whom I have enjoyed 
working over the last few years. His dedication to American consumers 
and his commitment to restoring fairness to the drug industry must be 
commended.
  I also want to thank Senator Gregg for reaching out to Senator 
Schumer, Senator Kennedy and myself, to find middle ground. He 
recognized that this problem existed and joined us to ensure that 
loopholes in the system are closed and consumers have access to the 
best and most affordable medicines. Senator Gregg's leadership enabled 
the expeditious introduction and successful Committee markup of this 
legislation, where under his chairmanship the bill was reported out by 
unanimous consent last Wednesday.
  Senator Kennedy's support of this measure must also be recognized. 
His experience and technical expertise have been invaluable throughout 
the process. The staffs of all three of these senators have worked 
seven days a week for the last few weeks, to ensure that the language 
we have crafted is as technically sound as possible--without any 
unintended consequences.
  It is my strong belief that this measure represents a significant and 
immediate step that Congress can take to help to improve the lives of 
many Americans. I look forward to debating this issue and working with 
my colleagues on both sides of the aisle to protect the health care 
needs of older Americans while also eliminating the anti-competitive 
abuses of both pioneer and generic drug companies.
  This place in some ways has become more partisan than a lot of us 
would like. I think this legislation is an example of how people on 
both sides of the aisle can work together. In this case, the chairman 
and ranking member of the appropriate committee, Senator Gregg and 
Senator Kennedy, have worked together, as have Senator Schumer and I, 
and all others on his committee who have made this legislation come to 
the floor. I imagine it will pass with relative ease, to the benefit of 
many millions of Americans.
  I again thank all who have been involved in it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, I thank the Senator from Arizona for laying 
the foundation without which this piece of legislation could not have 
come forward. I thank him, and, of course, Senator Schumer--two key 
Members in getting this initiative going. I congratulate them for 
making this product a much better product this year.
  Also, I ask for the yeas and nays on the amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. SCHUMER. Mr. President, I cleared this with the Democratic 
manager. I ask unanimous consent that I control the time under the 
control of the Democratic manager.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SCHUMER. Mr. President, I yield myself 10 minutes.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. SCHUMER. Thank you, Mr. President.
  I thank my colleagues and my friend, the Senator from Arizona, who is 
just walking off the floor. He and I got involved in this issue a 
couple of years ago when we saw the abuses that occurred. He has been 
simply a pleasure to work with--right on the money, focused on getting 
the job done for consumers, and not being deterred by interest groups 
on one side pushing him one way or by others questioning him on this or 
that. I thank him.
  I also thank my partner in this endeavor, Senator Gregg of New 
Hampshire. Early on this year, he came over to Senator McCain and me 
and said: Why can't we work this out? He agrees with the principles in 
the bill that we put together, but he had some very positive and 
constructive suggestions. I mean this as a complete compliment, having 
spent 7 years there. Without his New England style leadership--
understated, to the point, courageous, forthright--this bill would not 
have gotten as far as it did. I thank him for his leadership. I would 
say that New England leadership is tempered by having spent a few years 
in higher education in the great city of New York as well.
  Finally, I thank my good friend and our great leader in this Senate, 
a Senator I have been privileged to know and who again has been 
invaluable in bringing this bill to the floor. The original Schumer-
McCain bill would not have gotten the push that it did if the Senator 
from Massachusetts had not steered it through the shoals of the health 
committee when he was chair, and again he and his staff have just been 
of constant, invaluable assistance in making this happen. I thank him 
for that.
  The concept of this bill is simple. It is clear that we know we have 
these miracle drugs. They are wonderful drugs. The people who invent 
them in the pharmaceutical industry, I know many have had harsh words 
for on occasion, and I am not the least of those. But they do a very 
good thing. They come up with new, wonderful drugs that keep people 
living longer and living healthier.
  One of the reasons that my parents--praise God--just last week turned 
80 and 75--our whole family got together and celebrated their birthdays 
in Connecticut--is the fact that these drugs are available. I think 
every family can recount the stories.
  The careful balance we seek to reinstate here says we want to see 
innovation continue. We want to see a fair and reasonable rate of 
return made. We want to realize that for every 1 successful drug, there 
may be 20 or 50 or even 100 failures. There has to be an economic 
viability there. We want that to happen.
  I think most of us agree that the Hatch-Waxman bill--I thank my 
friend from Utah, who I think is over at the Judiciary Committee trying 
to work out another grand compromise, this time on asbestos, understood 
that.
  But here is what has happened over the last several years. This is 
where I fault the drug companies despite the goodness of the products 
they come up with. A lot of blockbuster drugs were on the market. Their 
patents were about to expire. The drug industry, accustomed to the high 
rate of return they have had, came to the conclusion that they had to 
do everything they could, they had to pull out all the stops to extend 
their monopolies. They came up with wild and crazy schemes to do it, 
such as patenting the substance the body makes when the drug is 
ingested; developing computer programs and listing the patents on the 
drug; and, in one case, absurdly, a new patent was asked for because 
the color of the bottle was changed.
  That was never the concept of Hatch-Waxman. We found that the 
pharmaceutical industry, instead of spending all its time developing 
new drugs, was developing new patents. They seemed to care more about 
hiring good lawyers than good chemists, scientists, and doctors.
  Let me give you one example of what happened. Paxil, a $2.1 billion 
drug used to treat obsessive compulsive disorders, has been in 
litigation since 1998. After the lawsuit began and the first 30-month 
stay was triggered, the brand, Glaxo, listed nine additional patents on 
the drug, triggering five additional 30-month stays.
  Well, over the past 4 years, there have been court decisions on four 
of those patents. The patent which began this litigation was found not 
to be infringed by the generic, and three others were found invalid. 
But the 30-month stays are still going on and on and on, costing 
consumers $3 billion. The same drug, with its same miracle qualities, 
would have been available for $3 billion less altogether had these 
frivolous and unnecessary patents not been filed. Well, this story 
could be repeated and has been repeated.

[[Page S8192]]

  Why is this a great day for consumers? Because the cost of the 
generic drug is so much less than the cost of the brand-name drug. And 
that generic drug should be allowed to come on to the market without 
frivolous patents, lawsuits, and legal mumbo jumbo preventing that from 
happening.
  We want a rate of return to be made by the drug company, but we do 
not want to allow them to do what they have been doing, with increasing 
frequency: playing games, perverting the law, and costing consumers 
billions of dollars because the lower-priced generic drug is delayed 
from coming on the market by frivolous patents.
  Let me give you some examples in my State:
  In Buffalo, Allegra, a great drug for allergies: The brand cost for 
30 pills is $84.56; if a generic were available, it would cost about 
$32.98.
  In New York City, Prevacid, to treat acid reflux: The brand cost is 
$154.28; the generic would cost $60.17.
  In Rochester, Celebrex, a great drug for arthritis: The brand cost is 
$108.29; the generic would cost $42.23.
  In Rochester, Lipitor, a wonder drug for cholesterol; I think it is 
now the largest selling drug in the world: The brand cost is $77.73; 
the generic would cost $30.32.
  And finally, in Syracuse, Norvasc, for angina and hypertension: The 
brand cost is $54.37; the generic would cost $21.20.
  The bottom line is: When 30 pills cost you $100 for the brand-name 
drug, it will cost you $25 or $30 for the generic--for the exact same 
medication.
  What our proposal does is encourages robust competition by allowing 
the generic to come on to the market in its fair time. It restores the 
balance of Hatch-Waxman. It does it in a way without frivolous 
lawsuits. It does it in a way that gives everybody notice. But what it 
says is, the recent trend to extend the patent monopolies long beyond 
what anyone thought they should be will be stopped.
  So this is a fair compromise. It is a compromise that helps 
consumers. It was estimated that the original McCain-Schumer--bill I 
don't see why it should be too much different in this new bill that 
Senator Gregg and myself, with Senator McCain and Senator Kennedy, have 
sponsored, other than some changes due to the baseline--would have 
saved American consumers $60 billion over 10 years. It was estimated 
our bill would have saved $18 billion in the Democratic Medicare 
package on the floor last year.
  In the same way, the bill before us today will save companies, that 
are struggling to pay for health care, hundreds of millions of dollars. 
That is why it has such a big and broad coalition behind it. And not 
just consumers and consumer groups, but industry groups, companies such 
as General Motors, the insurance industry--which I am often at odds 
with when it comes to health care issues--are fully on our side. There 
is a broad consensus of support.
  It is my hope the House will pass this bill. It is my hope the 
President of the United States will support this bill and sign it. And 
it is my hope--my sincere hope--the drug companies will see the error 
of their ways and, instead of spending so much time on extending patent 
monopolies, they will, rather, spend that time creating new drugs. They 
will spend their time not innovating new patents but, rather, 
innovating new drugs. That is what this is all about.

  One final point. Some might say, well, the FDA is doing some of this, 
anyway. I am glad they are, but as this chart shows, the FDA only goes 
about a third of the way in doing what is needed in this fair and 
balanced bipartisan compromise. In fact, when the FDA actually talked 
about closing these loopholes, it was made clear that legislation would 
be needed to finish the job.
  Mr. President, in conclusion, this legislation finishes the job. It 
allows generics to come on the market. It will save consumers, American 
companies, and our Government billions of dollars and increase the 
quality of health care--the good health and vitality--of the American 
people.
  The PRESIDING OFFICER (Mr. CRAPO). The Senator has used 10 minutes.
  Mr. SCHUMER. Mr. President, I do not see Senator Gregg on the floor, 
so let me yield 10 minutes to my colleague and partner in this 2-year 
attempt to bring balance back into the area between brand and generic 
drugs. He is one of our great leaders in the Senate on health care and 
so many other issues, the Senator from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized 
for 10 minutes.
  Mr. KENNEDY. Mr. President, if the Chair will remind me when I have 
used 8 minutes.
  Mr. President, first of all, I congratulate Senator Schumer and 
Senator McCain for the development of this legislation from over 2 
years ago. I thank them for their work and help with our Labor and 
Human Resources Committee.
  When I was fortunate enough to be chairman of that committee, we 
considered the legislation, and we reported that legislation out. But 
it was a very contentious meeting of our committee, and we had a very 
contentious debate here on the floor of the Senate.
  But what we have been able to do over the period of the recent 
months, under the leadership of Senator Gregg and others, is we have 
come up with a recommendation which reflects virtually a unanimous 
committee. I think this legislation is going to achieve the objectives 
Senator McCain and Senator Schumer had intended.
  So at the outset, I want to say that I am very hopeful we will get 
this legislation passed.
  I quite frankly think this is the appropriate amendment on the 
appropriate vehicle because we are talking about prescription drugs and 
we are talking about Medicare, and we are now talking about the costs 
of the prescription drugs. These matters are interrelated.
  If you ask people and seniors about their issues with prescription 
drugs, they will say, first, accessibility and availability, but, 
secondly, they will talk about cost. This legislation isn't going to be 
the final answer on cost, but make no mistake about it, as Senator 
Schumer has pointed out, the savings will be in the tens of billions of 
dollars to consumers over the period of the next few years. That is 
incredibly important.

  The Hatch-Waxman legislation, as we know, was to try to provide 
encouragement to our drug companies to innovate and to create and to 
bring new possibilities into the market. It has been very successful. 
But it has also interfered with the chances for generics to enter the 
market after these patents were up.
  As has been pointed out by those earlier, we found out there were 
abuses. Senator McCain and Senator Schumer noted this and made a series 
of recommendations in order that we address it. Their position was 
justified, again just over a year ago, by the Federal Trade Commission, 
which virtually identified very similar kinds of problems. There were 
previously many questions by the Members of this body--I remember the 
debate and I can still hear the voices in opposition. But, I think, 
this legislation is reaffirming the efforts which they have developed 
and which will, hopefully, pass here and will be accepted in the 
conference that is going to take place.
  Just finally, Mr. President, I want to review once again, as the 
Senators have pointed out, the cost difference of the various drugs 
over recent times.
  First of all, this chart I have in the Chamber shows you that the 
brand and generic price gap continues to widen.
  This chart goes back to 1990. And here you will see, the average 
prescription was going for $27.16, but only $10.20 for the generic.
  On the chart, the red represents the continuing increase in the cost 
of the average prescription drug that is requested by the pharmacy. It 
has gone up to $65.29 over the period of 10 years. For the generic, it 
has gone from $10.29 up to $19. So we have seen this dramatic increase 
in terms of the brand name, and really a very level increase 
effectively in terms of the generic.
  If we are talking about cost and talking about prices, the more we do 
to help give consumers a greater opportunity to get generics, we will 
have had some important impact in terms of creating a downward trend in 
prices. That is enormously important.
  Let's just look over, as others have pointed out, the difference 
between the average cost per brand name on these

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various items. If we look at Prozac for depression, $110.77 for the 
brand name versus $44.31 for the generic. Claritin for allergies, 
$63.65 versus $25.46. And going to heart disease, Norvasc, $55.69 to 
$22.27. Zocor for high cholesterol, $124.71 to $49.88. These are 
various drugs dealing with ulcers, depression, allergies, heart 
disease, and high cholesterol, which are many of the challenges our 
seniors are facing. This is a pretty good indicator of what we are 
talking about in terms of making generics more available and improving 
the opportunity for them to get on the market and be able to have a 
positive impact for our consumers.
  All of us understand that we have doubled the NIH budget. That is 
because we recognized in a very important way, Republicans and 
Democrats, that this really is the life sciences century. The 
opportunities we are facing now with the mapping of the human genome, 
the analysis of DNA, the proclivities that individuals have in terms of 
cancer and other diseases, are enabling us to anticipate and begin to 
develop medical technologies that will help prevent individuals from 
getting these diseases. The opportunities are unlimited. We have made 
that commitment and we are finding these breakthroughs that are taking 
place every single day. Many of these initiatives are up in my home 
State of Massachusetts, they are in New England, associated with many 
of our great universities and our teaching hospitals. We want to make 
sure those kinds of breakthroughs are actually going to get out and 
benefit our fellow citizens.
  We want to maintain on the one hand the incentives for the industry, 
the pharmaceutical industry to move ahead with breakthrough kinds of 
technologies. On the other hand, we want to make sure that available 
drugs in the form of generics will be accessible. This legislation is 
going to have an important impact in terms of the cost.
  I commend the Senator from New York, Mr. Schumer, and Senator McCain 
for moving this along. I thank very much the chairman of the committee, 
Senator Gregg, for giving it time and attention and for his very 
constructive and positive help. This is an important piece of 
legislation. It makes a very significant difference for our seniors. I 
am hopeful this will pass by an overwhelming majority.
  I yield back to the Senator from New York any remaining time I have.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I thank the Senator from Massachusetts and the Senator 
from New York for their kind words. Obviously their efforts have 
already been highlighted and have been the key to this successful 
undertaking. The doggedness of Senator Schumer on this issue has 
managed to bring this to fruition.
  It is an important piece of legislation as has been outlined relative 
to the differential in cost. It will save people significant amounts of 
dollars on their pharmaceuticals, obviously, as they come off patent. 
It is important not to underestimate the innovation side. We didn't 
want to do something that basically undermines or chills innovation, 
because the ability of our health care system to function well today 
requires a pretty strong pharmaceutical industry. Pharmaceuticals are 
really the process by which we are going to be caring for people as we 
go into the future. That is where the true discoveries are occurring, 
especially in the biologics area.
  We want to make sure we have an extraordinarily vibrant and strong 
research component, not only in the public sector through NIH, where we 
have doubled that budget, but in the private sector where people will 
invest in research, if they see a reasonable return. Some folks forget 
when they go to Canada to buy these drugs at a discounted price, they 
don't realize the cost of bringing a drug to the market is 
extraordinary. It takes about somewhere between 10 and 12, 15 years to 
bring a new drug to the market. It costs somewhere in the vicinity of 
three quarters of a billion dollars, $750 million to $1 billion, to 
bring it to the market. You can't do that unless you have dollars to 
support the investment and that length of time it takes to develop the 
drug.
  In a free market society, dollars flow where there will be a return. 
If somebody is going to find that they invest in a drug and that drug 
research comes to fruition and they produce a drug and immediately the 
drug is taken over or in too short of a time the drug's patent rights 
are taken over so there cannot be an adequate return on investment, 
people will not make the investment in trying to find a new drug. As a 
result, everyone will suffer. There will be fewer new and exciting 
drugs on the market that help people with health issues. So we have to 
have a strong and vibrant industry doing the research. That is why I 
have always been an aggressive advocate of a strong pharmaceutical 
industry. It is key to maintaining a health care system in this country 
which is going to be vibrant and effective for people.
  That being said, there is a time at which drugs need to come off 
patent. They have to be available at a lower price. They have to be 
available at a more reasonable price, the return having occurred on the 
original investment. What we saw, regrettably, under Hatch-Waxman, was 
there were games being played. There were games being played on both 
sides of the aisle, in fact. There were games being played on the 
brand-name side which would use the 30-month stay as a weapon, 
basically interminable stays. And there were games on the generic side 
where they might team up with a brand name and take advantage of the 
180-day exclusivity clause and never bring the drug to market even 
though they had filed. This bill is an attempt to address those issues. 
It addresses them very conscientiously and in a positive way. It does 
it in a way that will not open up a whole new arena of litigation. It 
is going to do it in the context of the already existing causes of 
action which is the way it should be done, and it goes a little bit 
further than what the administration could do in their FDA rule, quite 
a bit further in some areas, certainly the 180-day issue. In addition, 
it has statutory support versus regulatory action which means it 
probably has more opportunity to survive a court challenge.
  We think this is an excellent bill. It is a bipartisan bill. I thank 
the original sponsors, Senators Schumer and McCain. I especially thank 
Senator Kennedy for his willingness to work across the aisleway to make 
sure we move it through committee in a prompt way and have it be done 
in a constructive manner.
  I notice the Senator from Maine is here. I suspect she wishes to 
speak on this as she has been an aggressive advocate for this type of 
approach, one of the leaders on this issue in the Senate. We regret she 
is no longer on the HELP Committee because she was a positive force on 
lots of issues but especially this one specifically.
  Now that she is chairperson of the Investigation and Oversight 
Committee, she has her plate full of her own accord. I yield to the 
Senator from Maine such time as she may consume.
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Ms. COLLINS. I thank my colleague from New Hampshire for his 
leadership on this issue. He is an extraordinarily talented chairman of 
the HELP Committee who was able to bring people together on both sides 
of the aisle. This is yet another example of an outstanding achievement 
of the chairman, working together to benefit the people of this 
country. I do miss serving on the HELP Committee. I enjoyed the many 
issues the committee addresses, and this is an issue that is near and 
dear to my heart. I am very pleased to be a cosponsor of this 
amendment. I commend not only Chairman Gregg, but also Senators 
Schumer, McCain, and Kennedy, for all of their hard work on this 
comprehensive proposal.

  The amendment we are offering today will make prescription drugs more 
affordable by promoting competition in the pharmaceutical industry to 
increase access to lower priced generic drugs while at the same time 
protecting innovation and preserving the incentives for companies to 
make the investments necessary to develop newer, better, and safer 
pharmaceuticals.
  This amendment, which is based on legislation I joined Senators 
Schumer and McCain in introducing earlier this year, will make 
prescription drugs more affordable for all Americans. The Congressional 
Budget Office estimates that our original proposal would have cut our 
Nation's drug costs by some $60 billion over the next 10 years, and I 
understand this compromise proposal is

[[Page S8194]]

also expected to result in similar savings.
  I will repeat that. There are very few bills we are ever going to 
consider that will result in cutting our Nation's health care costs. 
This proposal, according to the CBO, will help reduce the cost of 
prescription drugs by some $60 billion over the next decade. At a time 
when we are modernizing Medicare to include a prescription drug 
benefit, it is very important that this legislation be passed to help 
moderate the cost of prescription drugs.
  Prescription drug spending in the United States has increased by 92 
percent over the past 5 years. These soaring costs are a particular 
burden for millions of uninsured Americans, as well as for seniors on 
Medicare who now lack prescription drug coverage. Many of these 
individuals are simply priced out of the market or forced to choose 
between paying the bills or buying the pills that keep them healthy.
  Skyrocketing prescription drug costs are also putting the squeeze on 
our Nation's employers, who are struggling in the face of double-digit 
annual premium increases to continue to provide health insurance for 
their employees. They are exacerbating the Medicaid funding crisis that 
all of us are hearing about from our Governors back home as they 
struggle to bridge shortfalls in their States' budgets.
  The 1984 Hatch-Waxman Act made significant changes in our patent laws 
that were intended to encourage pharmaceutical companies to make the 
investments necessary to develop new drug products while enabling their 
competitors to bring lower priced generic alternatives to the market.
  We should acknowledge that, toward that end, the Hatch-Waxman Act has 
succeeded to a large degree. Prior to the Hatch-Waxman Act passing, it 
took 3 to 5 years for generics to enter the marketplace after a brand 
name patent expired. Today, lower cost generics often enter the market 
immediately upon the expiration of the patent. As a consequence, 
consumers are saving anywhere from $8 billion to $10 billion a year by 
purchasing lower priced generic drugs.
  There are even greater potential savings on the horizon. Within the 
next few years, the patents on brand name drugs with combined sales of 
$20 billion are set to expire. If the Hatch-Waxman Act were to work as 
it was intended, consumers could expect to save between 50 to 60 
percent on these drugs as lower cost generics became available as these 
patents expired.

  Despite its past success, however, it has become increasingly 
apparent that our patent laws in the Hatch-Waxman Act have been subject 
to abuse. While many pharmaceutical companies have acted in good faith, 
there is mounting evidence that some manufacturers have attempted to 
game the system by exploiting legal loopholes in the current law.
  Too many pharmaceutical companies have maximized their profits at the 
expense of consumers by filing frivolous patents that have delayed 
access to the lower priced generics. Currently, brand name companies 
can delay a generic drug from going to market for years. A ``new'' 
patent for an existing drug can be awarded for merely changing the 
color of the pill or its packaging. There were examples cited by the 
Chairman of the Federal Trade Commission in testimony before the Senate 
Commerce Committee last year.
  One case involved the producer of a heart medication which brought a 
lawsuit for patent and trademark infringement against the generic 
manufacturer in early 1996. Instead of asking the generic company to 
pay damages, however, the brand name manufacturer offered a settlement 
to pay the generic company more than $80 million in return for keeping 
the generic drug off the market. In the meantime, the consumers of this 
heart medication, which treats high blood pressure, chest pains, and 
heart disease, were paying about $73 a month, while the generic would 
have cost them only $32 a month.
  Last July, the FTC released a long-awaited report that found that 
brand name drug manufacturers had misused the loopholes to delay the 
entry of lower cost generics into the market. The FTC found that these 
tactics led to delays of between 4 and 40 months--that is over and 
above the first 30-month stay provided under the Hatch-Waxman Act--for 
generic competitors of at least eight drugs since 1992.
  The FTC report pointed to two specific provisions of our patent 
laws--the automatic 30-month stay and the 180-day market exclusivity 
for the first generic to file a patent challenge--as being particularly 
vulnerable to strategies that could delay the entry of lower cost 
generics into the market. And it is precisely those two provisions 
which this carefully crafted compromise, which the chairman of the HELP 
Committee, Senator Kennedy, Senator Schumer, and Senator McCain have 
crafted, it is precisely those provisions that would be solved, and 
those loopholes would be closed by the amendment we are offering today.
  The bipartisan amendment we are offering would restore the balance in 
the current laws. It would close the loopholes that have reduced the 
original law's effectiveness in bringing lower cost generic drugs to 
market more quickly.
  Again, I salute the chairman for the tremendous work that was done on 
this important proposal. I am delighted it is being offered. I am proud 
to be a cosponsor. This will make a real difference in the drug bill, 
not only for consumers, not only for seniors, but employers, State 
governments, or anyone who is purchasing prescription drugs.
  I urge my colleagues to support the amendment.
  Mr. FEINGOLD. Mr. President, I join my colleagues, Senators Gregg, 
Schumer, McCain, Kennedy and others in introducing the Gregg-Schumer-
McCain-Kennedy Amendment to the Medicare Prescription Drug Benefit 
bill.
  As we all know, the sky-rocketing cost of prescription drugs is a 
problem deeply affecting senior citizens across the country. During my 
listening sessions and travels around my State of Wisconsin, health 
care, and specifically the cost of prescription drugs, continue to be 
the number one issue on people's minds. The problem of access to 
affordable prescription drugs is particularly acute among Wisconsin 
senior citizens who live on fixed incomes. Nationally, prescription 
drugs are senior citizens' largest single out-of-pocket health care 
expenditure, and the amount they are spending is rapidly increasing: 
this year, the average senior spends $996 a year for their prescription 
drugs. This is expected to rise to $1,147 in 2004.
  I am pleased to be an original cosponsor of the bill on which this 
amendment is based, the Greater Access to Affordable Pharmaceuticals 
Act. This important legislation will improve access to prescription 
drugs, and make them more affordable for our Nation's seniors. By 
closing a series of loopholes that are hindering true competition in 
the prescription drug market, this legislation will bring lower-cost 
generic drugs to the market faster, passing on approximately $60 
billion in savings to consumers over the next ten years.
  A Medicare Prescription Drug Benefit is absolutely necessary, and the 
debate we are having on this bill is an important one. But there are no 
real cost-control measures for the rapidly escalating costs of 
prescription drugs. This amendment is truly a cost-savings measure for 
not only our Nation's seniors, but also all Americans who need 
prescription drugs. This amendment offers a way to help halt the rising 
costs of prescription drugs, without costing the taxpayers a dime.
  Drug companies have every right to profit from their innovations. We 
need drug companies to continue the important research that brings 
life-saving drugs to the market. But once a prescription drug patent 
expires, we cannot allow the drug companies to keep renewing their 
patents for frivolous reasons, denying consumers affordable access to a 
generic alternative.
  Mr. KOHL. Mr. President, I rise today in strong support of the 
amendment offered by Senators Gregg and Schumer, of which I am a 
cosponsor.
  We are all aware of the incredibly high cost of health care these 
days and the often prohibitive cost of prescription drugs. We have all 
heard the sad but true stories of the senior citizens who are forced to 
choose whether to buy food or buy the medicine they need. We have heard 
the stories of seniors who only take half a pill instead of a whole one 
in order to make their prescriptions last longer. We hear these 
stories, and we all struggle to find a solution to these problems.
  I believe this amendment is an incredibly important step towards that

[[Page S8195]]

solution. In 2001, Americans spent more than $130 billion on 
prescription drugs, and of this amount, only $11 billion of this was 
spent on generic drugs. What makes this statistic so important is that 
although only $11 billion out of $130 billion spent was on generic 
drugs, this $11 billion bought 45 percent of the total prescription 
drugs purchased in 2001. Generic drugs, as safe and effective as their 
brand name counterparts, cost up to 80 percent less than those 
counterparts, and this amendment will help make sure that these drugs 
are made available to the consumer as soon as possible.
  This important amendment will close the loopholes that brand name 
companies have been using to make sure that their drug is the only one 
on the market, keeping their profits, and consumer costs, high. It will 
prevent brand name drugs companies from listing frivolous patents with 
the FDA in order to keep generics from being able to enter the market, 
and if they do, it will give generic companies recourse options. It 
will limit brand name companies to one automatic 30-month stay 
automatically keeping a generic alternative off of the market, instead 
of unlimited stays, which have kept generics off the market for years.
  These provisions, and others in this amendment, will save significant 
money to States, large corporations, small businesses, senior citizens, 
and so many others--money we could all use in this economy. For 
example, at the State level, Wisconsin spent over $14 million dollars 
in 2001 as a part of its Medicaid Program on 17 popular drugs whose 
patents will expire in the next 2 years. If generics for those drugs 
are allowed to enter the market, the taxpayers in my State will save 
about half of that money. That is no small change.
  At the same time, however, this amendment will not force 
pharmaceutical companies to stop researching and developing new and 
improved drugs, and looking for the cure for cancer, Alzheimer's 
disease, Parkinson's disease, and so many other ailments we are so 
close to curing. Both of these goals--bringing generics to the market 
as soon as possible, and continuing to support companies in their 
research and development efforts--are vital, and I believe this 
amendment strikes a solid balance between the two.
  I would like to commend Senators Schumer, McCain, Kennedy, and Gregg 
for their hard work on this effort, and I encourage all Senators to 
vote in favor of this amendment.
  Mr. HATCH. Mr. President, I rise to speak on the Gregg-Schumer 
amendment. This is a revised and improved version of S. 1225, the 
Gregg-Schumer bill, ``The Greatest Access to Affordable Pharmaceuticals 
Act of 2003.'' The HELP Committee reported S. 1225 just last week.
  This bipartisan amendment was authored by Senators Gregg, Schumer, 
McCain, and Kennedy. I commend all of them for their hard work which, I 
believe has resulted in a bill that is vastly improved over legislation 
that passed the Senate last July, S. 812. Additionally, substantial 
improvements have been made between the version reported by the HELP 
Committee last week and the new draft of the amendment that I 
understand was only completed early this morning after an all night 
drafting session.
  While I am supportive of the efforts and leadership of Senator Gregg 
and his prime cosponsors, Senators Schumer, McCain, and Kennedy, I am 
not in position to support this extremely important but complicated 
amendment at this time.
  While I am mindful that the underlying bill is an attractive vehicle 
for this amendment, my experience teaches me that it is good to let the 
dust settle a bit, or at least let the ink dry, before making an 
informed judgment on an amendment that works at the complex 
intersection between the patent code and the Federal Food, Drug, and 
Cosmetic Act.
  I can say this for certain: Senators Gregg, Schumer, McCain, and 
Kennedy deserve credit for their effort to make drugs more affordable 
for the public without undermining the existing incentives for 
developing new medicine.
  On Tuesday, the Senate Judiciary Committee held a hearing on the 
issue of competition in the pharmaceutical industry. This hearing 
focused on the July 2002 Federal Trade Commission Study: Generic Drug 
Entry Prior to Patient Expiration, the recently-finalized Food and Drug 
Administration rule on patent listings and the statutory 30-month stay 
available in certain circumstances, and the new bipartisan Gregg-
Schumer legislation, S. 1225.
  At that hearing, I requested the Department of Justice to give us its 
opinion on the constitutionality of a provision of the legislation and 
asked the Patent and Trademark Office for their views on the patent-
related provisions of the bill. I want to learn more from DOJ and PTO 
and others about their views on this only recently developed piece of 
legislation.
  As well, at the hearing I discussed with the Chairman of the Federal 
Trade Commission, Tim Muris, and the Chief Counsel for Food and Drugs 
at the Department of Health and Human Services, Dan Troy, problems that 
may arise from the manner in which the bill addresses the granting of 
the 180-day marketing exclusivity incentive when patents are 
successfully challenged. The amendment appears to retain a feature of 
the current system that grants the 180-day marketing exclusivity period 
to first filers of generic drug applications rather than those 
applicants actually successful in defeating the patents of pioneer drug 
firms.
  I look forward to working with the proponents of this legislation and 
once again commend them for their efforts to bring innovative and 
affordable drugs to the American public.
  Mr. GRASSLEY. I commend Senator Gregg and Senator Schumer for their 
bipartisan efforts and leadership on this issue. This amendment would 
eliminate questionable practices that have emerged since passage of 
Hatch-Waxman. I applaud the responsible intent of this amendment.
  This amendment reduces the possibility for drug companies to play 
games and prevent competition. These drug companies have not been 
accountable to consumers. Simply stated, this bill helps to ensure that 
consumers have access to low-priced drugs. This is a good thing.
  This amendment reduces the cost of prescription drugs.
  I can't think of a better time to enact these improvements. The 
underlying bill, S. 1, will provide drugs to seniors and this amendment 
will ensure access to lower priced drugs to everyone.
  I support this amendment and appreciate the efforts of the HELP 
Committee on this issue.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. GREGG. Mr. President, I ask unanimous consent that Senator Gordon 
Smith of Oregon be added as a cosponsor of the amendment.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  If no one yields time, the time will be charged equally to both 
sides.
  The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, how much time remains on both sides?
  The PRESIDING OFFICER. The Senator from New Hampshire has 4 minutes. 
The Senator from Montana has 11 minutes.
  Mr. BAUCUS. Mr. President, I yield 5 minutes to the Senator from 
Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. Mr. President, I thank my friend and colleague from 
Montana, who is working hard overall on this legislation. We appreciate 
his work.
  I came to the floor today to join with colleagues to support this 
amendment and to commend the Senator from New Hampshire and the Senator 
from Massachusetts for their joint leadership on the committee of 
jurisdiction and on this very important amendment.
  I think one of the most important actions we can take to lower 
prescription drug prices for everyone is this amendment. Making the 
marketplace work, making competition work, allowing, once a patent is 
completed, for a generic drug--or, as we say in Michigan, an 
unadvertised brand--to have the opportunity to go on the market, to be 
able to manufacture that drug and drop the price, I think is very 
significant.
  It is very important that we adopt the provisions in this amendment 
that relate to enforcement and the 30-month stay.

[[Page S8196]]

  We have had in Michigan for the last couple of years a very important 
coalition with Blue Cross and Blue Shield, the Detroit Regional 
Chamber, and the Grand Rapids Chamber. I just came from a meeting in my 
office with representatives from the chambers, with other businesses, 
and those in the community who understand we have to get a handle on 
the explosion of prescription drug prices, and it is critically 
important we have competition to bring those prices down.
  We know the average brand-name product is going up about three times 
the rate of inflation. We also know it is very costly to invest in new 
breakthrough drugs. We have many policies on the books to support and 
subsidize, through the taxpayers, new breakthrough lifesaving 
medication and to get it to market.
  There is important research done in my State of Michigan, of which I 
am very proud, through those working in Ann Arbor and Kalamazoo and 
many other parts of Michigan, which has made a real difference in our 
lives.
  Also, after we help fund the National Institutes of Health research, 
we allow companies tax deductions and credits for research, and we give 
them up to a 20-year patent so they can recover their costs from their 
investments in critical research and then the opportunity to bring 
these products to market.
  The deal with the American taxpayers is once that process of 
subsidizing and support is finished, that formula, that information is 
supposed to be available for companies that do not do research--
companies that have been called generic drug companies--to manufacture 
that medicine at a cheaper price. They do not do the research so, by 
definition, it can be done at a cheaper price. We know that anywhere 
from 30 percent--I have seen prices that were 70 percent lower. There 
is a wide range in the ability to bring down prices by having this 
system work.
  We also know that, unfortunately, there have been cases where the 
system has not worked, where companies have gamed the system or 
manipulated the system to stop these lower-cost medications from going 
on the market.
  This amendment will close the loopholes and hopefully better enable 
the system to work so we can have the benefit as consumers, as American 
taxpayers, of the investments we have made in helping to bring new 
drugs to the market and have the benefit of being able to afford those 
products once that medicine comes to the market.
  I am very pleased and appreciate the hard work everyone on both sides 
of the aisle has been involved in to bring this legislation forward. I 
have spoken many times on the floor about what I believe to be the two 
goals of Medicare prescription drug coverage and lowering prices for 
everyone. This amendment is part of lowering the prices for everyone.
  I commend everyone involved and urge support of the amendment.
  The PRESIDING OFFICER. The Senator's time has expired. The Senator 
from Montana.
  Mr. BAUCUS. Mr. President, it goes without saying we live in a very 
complicated era. That is especially true with prescription drug 
pricing, health care costs, new technologies, and new health care 
technologies. You cannot turn on the evening news without seeing a new 
technology, some way to help people lead higher quality lives, and you 
cannot turn on the TV without seeing an ad where essentially a 
prescription drug is being advertised as a new drug to help make 
people's lives better.
  It is very hard for people to know what to believe. It is also very 
difficult to know just what the right policy should be in Congress with 
respect to prescription drug benefits, more particularly what prices 
people should pay for drugs, and that is why we have deductibles, 
copays, and catastrophic coverage, and also what price Medicare should 
pay to the prescription drug companies when seniors are receiving 
benefits for drugs, and what the subsidy would be.
  It is not easy. I commend the Senators who put together this 
amendment because this amendment says: OK, the brand-name drug 
companies, the pharmaceuticals have their patent protection, and there 
is a good reason for patent protection: Because it takes a long time to 
develop drugs, and it is expensive. But there comes a time when enough 
is enough, when 17 years--I think that is the number of years of patent 
protection--is enough.
  Over the years, some of the drug companies have been able to prevent 
competition from working; that is, the generic companies come along to 
produce basically the same product, since the patent expired, but they 
are, in effect, denied the ability to sell at the much lower price 
because pharmaceuticals have multiple 30-month periods of stay. I am 
not saying this bill is perfect, but it is a great advance in helping 
beneficiaries and in helping the Federal Government get the best price, 
get the best buy for the drugs that are on the market that senior 
citizens are going to utilize and buy, one way or another, and Uncle 
Sam is going to buy.
  I highly compliment the authors of this legislation. We will see how 
well it works. My guess is it is going to work pretty well. There are 
many efforts, Mr. President, as you know, around the country; many 
States are figuring out ways, with volume purchasing, to get lower 
prices for prescription drugs under the Medicaid program.
  We do not want to kill the goose that lays the golden egg. The 
pharmaceuticals have provided our people with wonderful drugs. There is 
no getting around that. At the same time, everybody wants to get as 
much as he or she can for themselves--not everybody but a lot of people 
do. Certainly, in our competitive capitalistic system which works 
pretty well, companies are concerned about the bottom line, 
shareholders, quarterly reports, so they are going to try to make as 
much money as they can for the shareholders, and that is their 
responsibility.
  In so doing, brand-name companies have taken advantage of the patent, 
taken advantage of current law. They have found a loophole, and this 
legislation is designed to close that loophole, so that after 17 years 
and the patent period has expired, companies can offer generic drugs, 
lower-priced drugs. That makes the most sense once the patent period 
has expired. It is going to help. This is a bill which has many 
different provisions. It is very complicated. We are entering a whole 
new era of prescription drug benefits and a whole new way to get them 
out to senior citizens through Medicare, through private plans, through 
PPOs, through HMOs, and trying to find the right balance between value 
for beneficiaries--that is stability, so our senior citizens know what 
they are getting on the one hand and efficiency on the other; that is 
making sure it is the lowest price possible.
  This amendment before us does a pretty good job in striking that 
balance; that is, efficiency as a lower cost to seniors and the Federal 
Government because of generics, and also stability because it is done 
in a way that seniors have a better idea what they are getting.
  I commend the Senators, and I yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired. The 
Senator from Oregon.
  Mr. SMITH. Mr. President, I rise in support of this amendment. I 
commend Senators Gregg, Schumer, McCain, and Kennedy for their work on 
this carefully crafted and bipartisan amendment.
  Improved access to generic drugs is a policy that is, frankly, long 
overdue. Last year I voted in favor of this amendment, and I am pleased 
to say I believe today's vote will be on an improved amendment.
  The bill's sponsors have worked with the FDA, the drug industry, and 
the generics to reach the compromise that is before the Senate today. 
The result is a bill that will bring generics to the market in a timely 
way without stifling or shifting the process. Innovations that are 
vital to the American public and to health care consumers around the 
globe are, I believe, contained within this bill. By closing the 
loopholes that have allowed both the brand name drug companies and the 
generics to keep more affordable drugs off the market, all Americans 
win. I urge my colleagues to support this amendment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. SMITH. I suggest the absence of a quorum.

[[Page S8197]]

  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ENZI. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENZI. Mr. President, I ask unanimous consent that Senator Lincoln 
be added as a cosponsor to my modified amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENZI. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GREGG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, how much time remains?
  The PRESIDING OFFICER. Forty-five seconds.
  Mr. GREGG. Mr. President, that is just enough time for me to once 
again thank the people who have brought this bill to fruition, 
especially Senator Schumer, Senator McCain, and Senator Kennedy. It is 
very strong legislation which is going to do a lot to make drugs more 
affordable for all American citizens, and innovation for new drugs to 
care for the people in America.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. Mr. President, I know we are about to vote in a couple of 
minutes. I look forward to voting for this very important amendment. I 
commend the Senator from New Hampshire and the Senator from New York 
for their tireless work to bring this amendment to the floor in a way 
that it will receive broad support. It will achieve the objective of 
lowering the cost of prescription drugs, I believe, by bringing generic 
drugs to market faster. It will do so in a balanced, responsible way.
  I also want to take a second to applaud the Senator from Utah, Mr. 
Hatch, who really showed remarkable foresight in the original Hatch-
Waxman bill that has done so much to maintain balance between fostering 
research and innovation of new drugs on the one hand and expanding 
accessibility of more affordable generic drugs on the other. The 
success of that particular bill has been remarkable.
  I do have several concerns about the amendment. I will be voting 
proudly for this amendment, but I will state the few concerns I have 
that I hope we can address over the coming days.
  The intent of the amendment is clear: To improve competition, to 
bring high-quality, cost-efficient, and generic alternatives to the 
market sooner; and this amendment does just that.
  Mr. President, I want to address the amendment before us offered by 
Senator Gregg and to commend him for his tireless work to lower the 
cost of prescription drugs by bringing generic drugs to market faster.
  Last year, the Senate considered, and I voted against, a proposal to 
disrupt a system that has worked relatively well for almost 20 years--
the landmark Hatch-Waxman law. And I want to express my respect and 
admiration for the tremendous commitment and foresight shown by Senator 
Hatch in sponsoring and authoring--along with other colleagues in this 
body--the original Hatch-Waxman bill that has done so much to maintain 
a balance between fostering research and innovation of new drugs on the 
one hand and expanding the accessibility of more affordable generic 
drug copies of existing medicines on the other.
  Under Hatch-Waxman, generic competition has flourished. In 1984, when 
the law was passed, generics represented less than 20 percent of the 
market. Today, generic drugs represent nearly 50 percent of the entire 
market.
  Yet because of some abuses of the law, S. 812 last year proposed to 
address the conditions under which generic drugs come to market. 
Although the bill was intended to speed this process and bring cheaper 
drugs to the American consumer, I voted against this proposal for a 
number of reasons, including concerns about the impact the bill would 
have on public health as well as its possible effect on the development 
of new, innovative drugs. I shared the concern about abuses to Hatch-
Waxman and agreed with issues related to rising drug costs, but the 
proposal last year simply went too far, way beyond the recommendations 
contained in the Federal Trade Commission's 2-year study.
  Therefore, I commend Senator Gregg for the good work he has done on 
today's amendment. This represents significant improvement from last 
year's bill in an attempt to address ongoing concerns with last year's 
proposal.
  Currently, we are working to provide Medicare recipients access to 
prescription drugs, and that debate will continue into next week. 
During this discussion, we must address the cost issue, what current 
changes we must invoke to maintain the long-term sustainability of this 
added benefit by ensuring that the cost of drugs are appropriate, 
reasonable, and not beyond the reach of Americans. The Hatch-Waxman law 
has almost 20 years of balance, and now is the time to go back and 
readjust and make sure that balance is well situated going forward.
  As we look at the overall skyrocketing cost of health care, the cost 
of prescription drugs is dramatically increasing. But in the name of 
cost savings, never should we threaten public health. Furthermore, 
never should we threaten the research and innovation that has made us 
the envy of the world in terms of health care--the great breakthrough 
drugs, the investment in research and development, which eventually 
will deliver a cure for diseases that are not curable today.
  Let me make clear that today's amendment is much improved over last 
year's proposal, which took a heavyhanded approach to this very real 
problem and would have dealt a serious blow to pharmaceutical research 
and innovation. My colleagues, Senators Gregg, Schumer, McCain, and 
Kennedy, should be commended for their progress. Nevertheless, the 
amendment still has some significant flaws. Let me briefly outline 
several of my concerns. Even though these concerns will not prevent me 
from voting for this amendment, I believe that we must address these 
issues and I hope my colleagues will work with me in this regard.

  First, I am concerned by questions that have been raised regarding 
the constitutionality of a key provision allowing generic drug makers 
to seek declaratory judgment that the brand's patent is not valid or is 
not infringed. At the least, it seems likely that this question will 
generate significant litigation; at the worst, it raises the prospect 
that all of the work put in on this point may ultimately be for naught 
if the courts decide that it is unconstitutional.
  Next, under current law, if the court finds that a person has 
willfully infringed a patent, then the court awards treble damages. The 
amendment states that the court need not award treble damages in some 
circumstances--an alteration of patent rights that would apply only to 
drug patents and that removes the disincentive for generic companies to 
willfully infringe patents.
  While this amendment seeks to codify the recently finalized FDA rule 
limiting innovators to one 30 month stay, I am concerned that it fails 
to include a clarification of the Food and Drug Administration's, FDA, 
current policy that an amendment or supplement to an abbreviated new 
drug application, ANDA, cannot cover a drug other than the original 
drug indicated in the ANDA. Without closing this obvious loophole, we 
are only creating additional problems with the appropriate 
administration of the 30-month stay and leaving in place a possible 
manner by which to game the system.
  The intent of the amendment is clear, to improve competition and 
bring high-quality, cost-efficient generic alternatives to market 
sooner. If improving competition is achieved, I believe costs will 
decrease. However, I believe changes could be made to better improve 
competition, for example,

[[Page S8198]]

by allowing a generic firm that may not have been the first to file but 
is the first to have an approved drug ready for market to obtain the 
180-day marketing exclusivity. This would be more proconsumer because 
it would reward the generic company that actually gets their drug to 
market fastest, rather than the one that simply was first in line.
  However, I do comment Senator Gregg for including a ``use it or lose 
it'' provision to discourage anticompetitive behavior. This is a 
significant advancement from last year's ``rolling exclusivity'' 
provision, and will protect consumers from anticompetitive behavior on 
the part of both brand drug companies and generics.
  I will support this amendment. However, I believe we must continue to 
work to ensure the workability of the amendment, to provide that this 
does not inadvertently increase the health and safety risks to 
patients, and to avoid setting precedents that could lead to greater 
confusion and litigation in this area. I thank Chairman Gregg for his 
work on this issue and look forward to continuing to work with him on 
this as we move forward.
  Again, I commend the Senator from New Hampshire for his tremendous 
support in authoring, sponsoring, and amending this amendment.
  I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the question is on 
agreeing to amendment No. 932, as modified and amended.
  Mr. ENZI. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards), the Senator from Florida (Mr. Graham), the Senator from 
Hawaii (Mr. Inouye), the Senator from Massachusetts (Mr. Kerry), and 
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea''.
  The PRESIDING OFFICER (Mr. Smith). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 95, nays 0, as follows:

                      [Rollcall Vote No. 228 Leg.]

                                YEAS--95

     Akaka
     Alexander
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carper
     Chafee
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kennedy
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                             NOT VOTING--5

     Edwards
     Graham (FL)
     Inouye
     Kerry
     Lieberman
  The amendment (No. 932), as modified and amended, was agreed to.


                           Amendment No. 939

  The PRESIDING OFFICER. There are now 10 minutes equally divided prior 
to the next vote.
  Who yields time?
  The Democratic leader.
  Mr. DASCHLE. Mr. President, the amendment that is now pending before 
the Senate addresses a concern that many of us have with regard to the 
volatility of the premium.
  As everyone knows, currently, the Medicare Part B premium is $58.70. 
That is across the board, across the country. Regardless of where you 
live, regardless of the circumstances, a senior pays $58.70. We do not 
know what the premium for this prescription drug benefit will be. We 
are told the average cost is anticipated to be $35. But there is the 
average national weighted premium that is supposed to be about $100, 
which comprises both what the beneficiary pays and what the Government 
pays. If that is off by $10, if it is going to be $110 rather than 
$100, that $10 is going to be added to the $35, requiring a 30-percent 
increase in the cost of the premium for the beneficiary.
  So we are very concerned, first, about the unpredictability of the 
premium, and, secondly, about the volatility of the premium because we 
really do not know what the national weighted average is going to be.
  We also know because of utilization, there could be dramatic changes 
from region to region. Currently, in a Medicare+Choice program, 
including prescription drug benefits, a benefit package in Florida 
costs $16 and a package costs $99 in Connecticut. So you get a wide-
ranging variance with regard to regions of the country.
  This amendment simply says: Look, of all the factors you have to be 
concerned about; at least on the premium you are going to have some 
understanding that it is not going to vary as dramatically and as 
wildly as it might because there will be a cap of 10 percent over that 
national average for the beneficiary's contribution. If the national 
average is $35, it cannot exceed 10 percent more in any 1 year. It 
might exceed more than that year after year, but each year it would be 
within 10 percent of the average. It can go below that, but it just 
cannot go above 10 percent.
  When you look at all of the concerns that seniors have with regard to 
the unpredictability of this plan, the co-pay, the coverage gap, the 
stop loss, the benefits package itself--all of those concerns, in 
addition to the variance of the premium--we are simply saying, let's 
do, at least in part, what we do with Medicare Part B. If Medicare Part 
B can be $58.70, let's say the prescription drug benefit can be $35 
plus 10 percent regardless of what circumstances may be out there.
  Let's give a little more certainty, a little more stability to 
seniors as they begin to pay their premiums. As it as a result of this 
bill, they are going to be paying $100 a month now for Part B as well 
as for this new prescription drug benefit per month. I think we have to 
be concerned about how high those costs can go and how much economic 
challenge these seniors are going to have to take on as they face the 
real prospect of being in a position of not being able to afford the 
benefit at all.
  Mr. President, I yield to my dear friend and colleague from Nebraska, 
Senator Nelson.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. NELSON of Nebraska. Mr. President, the purpose of insurance is to 
help stabilize the market and spread costs and risk over an entire 
group of people. This amendment will help achieve that goal. It will 
reduce significantly the unpredictability of the premium and the 
unpredictability of the disparity of State premiums. It will bring 
certainty to the process. People will know that their rate cannot be 
greater than 10 percent of the national average.
  If we are going to manage care, we need to manage competition as 
well. This is one way of being able to do it. Just such as in Medicare, 
the insurance companies here, providing the new drugs, would decide 
what premiums to charge seniors based on experience within the State. 
What we would say is they have to take into account the national 
statistics and data in determining the rates.
  I think it will even it out, and the disparity between State 1 and 
State 2 will be significantly lower. Unpredictability will be reduced 
and the certainty that will be established will be beneficial to the 
people. It will give seniors peace of mind, as well, with the ability 
to pay and know what the future will bring.
  Stability and predictability is important in this particular program. 
We hope our colleagues will take a look at this and understand that the 
difference in the rate in New York should not be significantly 
different than the rate in Florida or Nebraska or wherever we may 
reside.
  I think we all have an interest in making sure this program works, 
that

[[Page S8199]]

it is sustainable, and, therefore, I ask colleagues to be supportive of 
this amendment. I think it is in the best interests of the insuring 
public, and, in this particular case, our seniors.
  Mr. HATCH. Mr. President, I rise in opposition to the amendment 
offered by the minority leader, Senator Daschle. This amendment would 
mandate a nationwide cap on the premium for the stand-alone 
prescription drug plans.
  Although at first this amendment might seem attractive, a closer look 
reveals blemishes and flaws in this approach, flaws that would spell 
disaster for the stand-alone prescription drug benefit and for Medicare 
beneficiaries were we to adopt this amendment.
  S. 1 provides for a stand-alone prescription drug plan premium that 
would average $35 nationwide. The amendment offered by Senator Daschle 
would cap the premium at $38.50.
  Although it may sound trivial, the difference between these two 
approaches is an important distinction to make if we are to implement a 
successful program.
  S. 1 provides for at least two, and perhaps many more, private 
entities to bid for and provide stand-alone prescription drug coverage 
in each region. The plans may provide either the standard drug benefit 
or a drug benefit that is actuarially equivalent to the standard drug 
benefit.
  The actuarially equivalent plans will have some flexibility in 
determining the specific prescription drugs that they provide and how 
they provide those drugs to beneficiaries. Some plans may be more 
efficient. These plans may find that they are able to provide 
prescription drugs at a lower cost and charge a premium that is less 
than $35. Others may choose to offer enhanced coverage or use delivery 
systems that require a premium that is higher than $35. It may be 5 
percent higher. It may be 10 percent higher. It may be 15 percent 
higher. Or, it could also be lower.
  So why should we lock ourselves in? We would be negating the very 
flexibility around which S. 1 was designed.
  The point is that by providing for an average nationwide premium and 
stipulating that the plans may be actuarially equivalent, we allow 
plans to offer choices. And that is what Americans and particularly 
Medicare beneficiaries want.
  S. 1 provides Medicare beneficiaries with the opportunity to choose 
plans based on price, service, and within certain mandated limits, the 
prescription drugs that are provided.
  Let me mention something that I addressed also a few days ago in my 
opening remarks. This pertains to the provision in the bill ensuring 
that Medicare beneficiaries will have affordable prescription drug 
coverage.
  S. 1 gives the Secretary of Health and Human Services the discretion 
to make adjustments in geographic regions so there will not be a large 
discrepancy in Medicare prescription drug premiums across the country.
  This is very important to me, because I do not want Utahns paying 
significantly higher premiums than Medicare beneficiaries living in 
Miami or New York.
  That being said, I believe it is better to give the Secretary of HHS 
the discretion to make those important decisions. If we cap the monthly 
premium in legislation, we are taking away plan flexibility--one of the 
fundamental principles of S. 1.
  If we adopt the Daschle amendment and cap the stand-alone drug plan 
premium nationwide, Medicare beneficiaries will lose choices. The plans 
will not have the flexibility to offer improved service; they may find 
that they are unable to offer different services at all. There could be 
little to distinguish plans from each other. And beneficiaries may not 
be able to find a plan that offers the services or the particular brand 
of drug that they prefer.
  This is not what Medicare beneficiaries want and it is certainly not 
what we in the Senate should offer them. My Finance Committee 
colleagues and I have worked hard during the last several months to 
provide Medicare beneficiaries with choices; choices that allow them to 
determine which prescription drug plan works best for them.
  My colleague from South Dakota is concerned also about the complexity 
of variable premiums in S. 1. He has claimed that differences between 
plans will be confusing to our Nation's seniors.
  I share Senator Daschle's desire that our seniors understand the 
terms of the plans that they are offered. However, I must disagree that 
the stand-alone prescription drug plans provided for in S. 1 will 
confuse seniors because the choices offered to them will be clear. 
Differences between plans will be obvious; seniors will choose a plan 
based on the factors that are important to them. It seems to me that 
this promotes the kind of transparency in public policy that a 
democratic, open society is all about.
  Let me mention another problem that will certainly occur if the 
Senate were to mandate a national prescription drug premium.
  If we mandate a specific, nationwide premium dollar amount, Congress 
will be back here every year debating whether that amount reflects the 
true cost to deliver prescription drugs. Since we all know how quickly 
the Government moves, this seems like a decidedly inefficient process.
  This is not how the American people want their elected officials to 
spend our time, and it certainly is not how I think we can best use our 
time. This is an instance when Congress should trust the American 
people to determine what is best for them by making choices in the 
marketplace.
  Furthermore, providing for a nationwide average premium allows plans 
the flexibility to design prescription drug benefit packages that 
reflect modern health care--not just what makes sense today, but what 
will make sense in 10 to 20 years.
  If plans do not have this flexibility, we may in 10 years find 
ourselves in the same situation that we are in today, needing to revise 
a system that no longer provides the up-to-date options that Medicare 
beneficiaries need and deserve.
  The private health insurance market and the Federal Employees Health 
Benefit Plans operate in this manner.
  These plans provide benefits that have evolved over time in response 
to enrollees' needs to keep pace with modern health care innovations. 
Flexibility enables these plans to adjust quickly to meet their 
enrollees' needs and flexibility will allow the stand-alone 
prescription drug plans to meet Medicare beneficiary needs quickly and 
efficiently over time.
  It is important also that we recognize that the Congressional Budget 
Office has said that prescriptive benefits, those spelled out in 
statute, will cost more and will provide lower quality and less 
efficient health care. Setting limits usually means that plans provide 
the minimum benefit at the lowest cost. Providing flexibility enables 
plans to be innovative and to offer multiple coverage options that 
reflect what Medicare beneficiaries want.
  I urge my colleagues on both sides of the aisle to resist the 
temptation to vote for this amendment. Although it may sound enticing, 
capping the prescription drug premium will result in an outcome that 
none of us desire and that no one intended.
  Capping the prescription drug premium will result in a one-size-fits-
all approach, an approach that will leave us in a few years with a 
tired old prescription drug plan that doesn't meet anyone's needs.
  This bill, S. 1, is about providing people with choices--choices that 
are affordable, but choices that also provide Medicare beneficiaries 
with what they need and want.
  When the Government limits prices, Americans lose choices. In 
establishing a national average premium, not a nationwide premium, S. 1 
will provide Medicare beneficiaries with the prescription drugs that 
they need and the choices that they want today and in the future. That 
is what Medicare beneficiaries tell us that they want and that is what 
my Finance Committee colleagues and I have worked so hard to provide. 
And that is why I will oppose this amendment and why I urge my 
colleagues to do the same.
  The PRESIDING OFFICER. Time in support of the amendment has expired.
  Who yields time in opposition?
  The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I yield time to the Senator from Montana.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I just want to inform my colleagues that 
this

[[Page S8200]]

is a balanced bill. It has been very difficult to achieve that balance. 
I fear it is becoming more fragile as the days pass by. I think it 
would be very unfortunate if this bill fell apart.
  I am not saying, by any stretch of the imagination, that the 
amendment offered by my very good friend from South Dakota is going to 
tip the balance of the bill, but I am saying--knowing of other 
amendments that are coming up, and the views that various Senators are 
taking on the amendments they may offer later on--this balance, this 
bill which I think we all want to support, is not in jeopardy yet but 
it is somewhat tenuous.
  There are protections in the bill for premiums. A couple quick 
points: One, under the bill, there are large geographic areas, which 
will tend to force the premiums to not fluctuate but to be according to 
insurable principles.
  Second, there are very strong consumer protections that are basically 
the FEHBP protections which provide premiums have to be in line with 
benefits. That is under FEHBP. We incorporated that in the bill.
  There is also a geographic adjustment in the bill. Right now, the 
Secretary has discretion to make the geographic adjustment. That might 
be strengthened later on in the proceedings.
  I am sympathetic with the purpose of this amendment, but my judgment 
is, at this time, we should not adopt this amendment because there are 
sufficient protections in the bill, and I do not want this bill--I do 
not think any Senator wants this bill--to go south because of other 
amendments that may be adopted that may cause that to happen.
  This is a historic moment. We are on the eve, the cusp of passing 
prescription drug benefit legislation. We should not take that lightly. 
I know we don't. I think we want a big vote. Medicare passed by a large 
margin back in 1965. Many Senators are saying there is a chance this 
underlying bill could get 60, 70, 80 votes. I say to my colleagues, I 
think we owe it to ourselves to try to find a way to help pass this 
legislation by a large margin.
  The PRESIDING OFFICER. Who seeks recognition?
  Mr. BREAUX. Mr. President, how much time remains?
  The PRESIDING OFFICER. Two and a half minutes.
  The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I urge my colleagues to vote against this 
amendment. Competition is the key to holding down costs. That is common 
sense. This amendment is anticompetitive because it constrains 
competition. I think we should oppose it.
  According to CBO, the competitive policies in our bill ensure that 
premiums and cost sharing for drug coverage will be affordable. Under 
S. 1, prescription drug plans that do a poor job of negotiating drug 
prices will have to charge a higher premium. The same goes for plans 
that are inefficient and wasteful. Plans that do a good job negotiating 
will be able to charge lower premiums. That is the marketplace. We 
should not micromanage it. This amendment does just that. I urge my 
colleagues to oppose it.
  I remind my colleagues, a similar amendment capping premiums at 5 
percent was defeated in the Finance Committee last week by a vote of 7 
to 14.
  I yield to my friend from Louisiana.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I would just say, in conclusion, 
protections in this bill are exactly the same we have as Members of the 
Senate. The Administrator could not approve a premium unless it 
reasonably and equitably reflects the value of the prescriptions they 
are getting. A Government agency makes the decision on whether it is a 
reasonable premium.
  When you have a deductible that is fixed, it cannot be varied at all. 
And the catastrophic cut-in cannot be raised. It can be lowered. You 
have to have something left to compete on, and the premium will be one 
thing, although it still has to be approved by the Administrator.
  So I think the balance we have in the bill is a good one. It is 
equitable, and I think it can work.
  Mr. DASCHLE. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to amendment No. 939, as modified. The 
clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards), the Senator from Florida (Mr. Graham), the Senator from 
Hawaii (Mr. Inouye), the Senator from Massachusetts (Mr. Kerry), and 
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Florida (Mr. Graham) and the Senator from Massachusetts (Mr. Kerry) 
would each vote ``yea''.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 39, nays 56, as follows:

                      [Rollcall Vote No. 229 Leg.]

                                YEAS--39

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carper
     Clinton
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Hollings
     Johnson
     Kennedy
     Kohl
     Lautenberg
     Leahy
     Levin
     Lincoln
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--56

     Alexander
     Allard
     Allen
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Chambliss
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Landrieu
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner

                             NOT VOTING--5

     Edwards
     Graham (FL)
     Inouye
     Kerry
     Lieberman
  The amendment (No. 939) was rejected.
  Mr. STEVENS. Mr. President, I move to reconsider the vote and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from New Hampshire.


                           Amendment No. 945

  Mr. GREGG. Mr. President, what is the regular order?
  The PRESIDING OFFICER. The Gregg amendment, on which there are 2 
minutes of debate evenly divided.
  Mr. GREGG. Mr. President, I ask unanimous consent that Senator Talent 
be added as a cosponsor of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GREGG. Mr. President, I will just say this amendment is a good 
idea. I yield back the remainder of my time.
  The PRESIDING OFFICER. Who yields time in opposition?
  If all time is yielded back, the question is on agreeing to the 
amendment of the Senator from New Hampshire.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  Mr. REID. I announce that the Senator from North Carolina (Mr. 
Edwards), the Senator from Florida (Mr. Graham), the Senator from 
Hawaii (Mr. Inouye), the Senator from Massachusetts (Mr. Kerry), and 
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea''.
  The PRESIDING OFFICER (Mr. Cornyn). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 94, nays 1, as follows:

                      [Rollcall Vote No. 230 Leg.]

                                YEAS--94

     Akaka
     Alexander
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carper
     Chafee
     Chambliss
     Clinton
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn

[[Page S8201]]


     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hagel
     Harkin
     Hollings
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kennedy
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Pryor
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--1

       
     Hatch
       

                             NOT VOTING--5

     Edwards
     Graham (FL)
     Inouye
     Kerry
     Lieberman
  The amendment (No. 945) was agreed to.

                          ____________________