[Congressional Record Volume 149, Number 144 (Wednesday, October 15, 2003)]
[Extensions of Remarks]
[Page E2041]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF THE MEDICARE PRESCRIPTION DRUG PRICE NEGOTIATION ACT

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                          HON. JOHN B. LARSON

                             of connecticut

                    in the house of representatives

                      Wednesday, October 15, 2003

  Mr. LARSON of Connecticut. Mr. Speaker, Hubert Humphrey once said, 
``The moral test of government is how that government treats those who 
are in the dawn of life, the children; those who are in the twilight of 
life, the elderly; and those who are in the shadows of life--the sick, 
the needy, and the handicapped.'' Right now we are failing this test.
  America has over 40 million elderly and disabled Americans who rely 
on prescription medication to maintain their way of life. Over the past 
few years, prescription drug costs have skyrocketed and a prescription 
drug benefit plan for seniors is long overdue. Many seniors are faced 
with the choice of paying for the medications they need or paying for 
the food on their table and the heat in their home. This is not a 
choice they should be forced to make. The Federal Government should not 
be turning its back on those who have done so much for this country.
  A prescription drug benefit should come under the traditional 
Medicare program that seniors know and are comfortable with, not placed 
in the hands of HMOs and private insurers. The experience with 
Medicare+Choice HMOs leaving Connecticut is proof that private insurers 
will not buy into this program. Few insurers will be willing to buy 
into this program, at least for an extended period, because drug costs 
are risky and expensive to cover and because it is not actuararily 
feasible for them to make a profit. But don't take my word for it, 
listen to the words of Chip Kahn, former president of the Health 
Insurance Association of America. He said, ``I don't know of an 
insurance company that would offer a drug-only policy like that or even 
consider it.'' He went on to say that it would be like ``insuring 
against haircuts.''
  Prescription drug prices are virtually unregulated in the United 
States, as opposed to most other nations. Internationally, seniors pay 
dramatically less for prescription drugs, while pharmaceutical 
companies are leaving other countries to enjoy the largely unregulated 
market in the United States. Nations like Canada are no longer 
developing innovative drugs. In the European Union, health care quality 
is dimishing and investors are wary of EU pharmaceutical companies 
because of the uncertainty of profits due to price controls. Thus, 
American seniors are shouldering the burden of pharmaceutical research 
and development for the entire world.
  The real problem lies in the cost of prescription drugs. American 
seniors pay drastically more than in any other place in the world. A 
solution needs to be identified that reduces this burden without 
stifling the innovative research that sets America's health care 
industry apart from the rest of the world.
  I believe the solution lies in an idea that is already being used by 
the Federal Government. Prescription drug prices have been successfully 
lowered for seniors enrolled in the Department of Veterans Affairs 
health care system. The secretary leverages the power of the VA 
purchasing population (6.9 million people) to negotiate substanially 
lower drug prices. The VA also makes heavy use of generic drugs and 
mail order purchasing. An investigation by the Inspector General of the 
Department of Health and Human Services in 2001 found that the VA paid, 
on average, 52 percent less for a list of 24 drugs than did Medicare.

  The legislation I am introducing today, the Medicare Prescription 
Drug Price Negotiation Act, would allow the Secretary of Health and 
Human Services, in conjunction with the Secretary of Veterans Affairs 
and the Secretary of Defense, to negotiate the prices of prescription 
drugs purchased by the Federal Government and by Medicare recipients. 
By using this successful model, seniors will be able to realize actual 
savings in their prescription drug costs.
  As I noted earlier, the United States is the home of major 
pharmaceutical innovation, due in part to its largely unregulated 
market. I think that it is vitally important for the United States to 
maintain its preeminence in this area and my legislation would require 
the Secretaries to take into account the goal of promoting the 
development of breakthrough drugs in negotiations with manufacturers. 
Pharmaceutical companies should be rewarded for their innovative work 
and their role in improving the lives of so many Americans. However, 
American seniors should not be the only ones shouldering this burden. I 
believe it is incumbent on the Federal Government to step in and 
provide some relief to seniors, many of who live on fixed incomes, who 
rely on these drugs to maintain their quality of life.
  Additionally, my legislation creates an ombudsman within the 
Department of Health and Human Services to ensure that savings are 
being passed along and resolve disputes between the manufacturers, 
sellers, and purchasers of prescription drugs. Additionally, the 
Secretary will be required to report to Congress regarding the 
effectiveness of this act in achieving reduced prices for Medicare 
beneficiaries.
  We now have an opportunity to pass the test Vice President Humphrey 
handed down to us. My legislation would provide seniors with the relief 
they need without stifling American innovation and the creation of 
lifesaving medications. I urge my colleagues to join me in supporting 
this legislation and treat those in the twilight of life with the 
respect they deserve.

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