[Congressional Record Volume 149, Number 167 (Tuesday, November 18, 2003)]
[House]
[Pages H11504-H11505]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     BAD DEAL FOR AMERICA'S SENIORS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon (Mr. DeFazio) is recognized for 5 minutes.
  Mr. DeFAZIO. Mr. Speaker, there is a lot of confusion from the debate 
earlier tonight about what the so-called pharmaceutical benefit for 
seniors is or is not. Let us just clarify things a little bit.

[[Page H11505]]

  First off, there are two bedrock principles in this provision of law. 
It prohibits the Federal Government of the United States from 
negotiating lower drug prices on behalf of Medicare beneficiaries. It 
prohibits the government from doing that.
  We heard a discussion from the gentlewoman from New Mexico (Mrs. 
Wilson) about people who will be put together in groups and they will 
negotiate lower prices as much as 15 or 20 percent. Well, the 
government has done that with our veterans and they have lowered prices 
up to 60 percent for those drugs and the veterans group is much smaller 
than the Medicare group. So if we were to aggregate all of seniors 
voluntarily into a group without them paying a penny or premium of any 
sorts and have the government negotiate on their behalf for price 
reductions, one could expect that they might even exceed those of 
Veterans Administration. Maybe we would see prices even lower than in 
Canada.
  That is the second bedrock principle of this legislation. Not only 
does this legislation at the behest of the pharmaceutical industry 
prohibit the government from negotiating lower prices in the 
extortionate cost of prescription drugs, the highest in the world here 
in the United States, secondly, it actually would say that not only can 
you not do that but it is going to stop the importation or really 
restrain the importation of less expensive drugs from Canada and other 
countries because it has a provision that says the Secretary of Health 
and Human Services will have to say that those drugs are safe, in his 
opinion.
  Well, he has already rendered an opinion. He has already said they 
are not safe in his opinion. Now, there is a little problem with that. 
Actually, the supply chain in Canada has more integrity than the supply 
chain in the United States. In the United States we have a whole host 
of people who are out there. We have these closed-door pharmacies. We 
have unregulated middle men and wholesalers. The drugs really are not 
tracked and a whole lot of counterfeit drugs are getting injected into 
the system in the United States. But in Canada the Government of Canada 
negotiates on the behalf of the Canadian people very substantial price 
cuts from U.S. manufacturers of FDA-approved drugs; and when the drugs 
go to Canada, they are always within the purview of the government 
there. They track them much more carefully than in the United States.
  So arguably you could say that FDA-approved, U.S.-manufactured 
pharmaceuticals returning to the United States from Canada directly to 
a consumer would be less likely to be adulterated or counterfeit than 
many of those in the supply chain in the United States of America. That 
is very well documented. It was particularly well documented in a 
recent series in The Washington Post.
  So what is really at risk here? If it is not the health of seniors, 
which is suddenly of tremendous concern to the majority party here at 
the behest of the pharmaceutical and insurance industries, what is 
really at risk? Well, what is really at risk is the extortionate price 
they are able to extract from the American people for pharmaceuticals. 
Americans pay far more than any other developed nation in the world for 
pharmaceuticals. This bill will do nothing to help that. In fact, this 
bill will guarantee that price gouging will be continued.
  The other big benefit is that seniors would be allowed under this 
bill to go and buy private insurance at a price that is not yet totally 
determined but with substantial deductibles. And under the optimistic 
estimates, and these are only estimates because God forbid the 
government even after giving a $20 billion subsidy under this bill to 
the private insurance industry should mandate they do anything, we are 
hoping that they would offer an affordable benefit; and the estimates, 
optimistic, are that a person who has a drug bill of $1,000 a year 
would get a benefit of $109 a year after they pay their premiums, 
copayments, and deductibles. A person with a drug bill of $5,000 a year 
would get a benefit of $1,024. They would pay 80 percent of the cost. 
The person at $1,000 a year would pay 77 percent of the cost.
  If those same people were just allowed to purchase their drugs from 
Canada, the price would be 50 percent or less. If the government 
negotiated on their behalf using the market power of the people in 
Medicare to reduce the price, it would likely be 50 or 45 percent. So 
what we are really doing here is providing a huge subsidy to the 
private insurance industry setting up the pharmaceutical industry to 
continue price gouging and setting up seniors for a very big fall; and 
this is such a great benefit, it will not even begin until year 2007.
  This is really not a good deal for America's seniors, and AARP should 
be ashamed that they have lent their endorsement to this. I do not know 
what they got in return. I know what that side got and that was huge 
contributions from the pharmaceutical and insurance industries.

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