[Congressional Record Volume 150, Number 60 (Tuesday, May 4, 2004)]
[Senate]
[Pages S4784-S4786]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                MEDICARE

  Ms. STABENOW. Mr. President, I rise today to speak about the Medicare 
law that we passed and the newly announced Medicare discount card.
  I, first, raise deep concerns about a recent report that has come 
forward from the Congressional Research Service which was made public 
yesterday. I read from an AP story and report made public on Monday by 
the nonpartisan Congressional Research Service that efforts to keep 
Richard Foster, the chief Medicare actuary, from giving lawmakers his 
projections of the Medicare bill's costs--$100 billion more than the 
President and other officials were acknowledging--probably violated 
Federal law.

  It goes on to say:

       Foster testified in March that he was prevented by then 
     Medicare administrator, Thomas Scully, from turning over 
     information to lawmakers. Scully, in a letter to the House 
     Ways and Means Committee, said he told Foster ``I, as his 
     supervisor, would decide when he would communicate with 
     Congress.''

  Congressional researchers chided the move. Such gag orders have been 
expressly prohibited by Federal law since 1912, Jack Maskell, a CRS 
attorney, wrote in the report.
  I hope we are going to pursue this. We have a specific report 
indicating the administration may have violated a law that has been in 
place since 1912 that relates to information not given to us about the 
Medicare bill and about an employee, a Medicare actuary, who was told 
he could not share information, even though that was his job, even 
though he was asked to do so, another very troubling part of the whole 
Medicare saga as we look at this legislation.
  Sadly, our seniors now must endure another major disappointment as 
they cope with the implementation of last year's flawed Medicare bill. 
Since the final agreement was hashed out in the middle of the night 
last year, seniors across this country have heard more and more 
frustrating news about the new Medicare law. The latest is the new 
Medicare discount card or, as some would say, nondiscount card.
  Prior to the launch of the prescription drug card Web site last week, 
seniors discovered one outrage after another. First, they found out 
this bill had an undesirable benefit. For example, if you have $5,100 
in prescription drug costs in a year, you still have to pay 80 percent 
of that--over $4,000. That is not the kind of benefit people in 
Michigan desire. When the benefit is explained to them in public forums 
where I have been participating, people are very upset. This is not the 
kind of benefit they have been asking for.
  Second, they began to understand this legislation will undermine 
private health insurance and almost 3 million retirees will lose their 
private prescription drug coverage. About 183,000 people in Michigan, 
as a result of this bill, are predicted to lose the private coverage 
they worked for their whole lives and count on now in retirement.
  Third, they realize approximately 6 million low-income seniors will 
have to pay more under this new plan than they did under their existing 
Medicaid coverage or their coverage will be more restrictive. Think of 
that for a minute. For the folks who are lowest income seniors, whom we 
all speak about having to choose between food and medicine, under this 
new law they will have to pay more--maybe only a little bit more, but 
every dollar counts when you are choosing between food, medicine, 
paying the electric bill, or cutting pills in half or taking them every 
other day. It is astounding the bill that was passed actually increased 
the costs for our poorest seniors.
  Fourth, our seniors discovered there were no provisions to actually 
lower the prices of prescription drugs. That is amazing. Despite the 
House of Representatives overwhelmingly passing a bipartisan 
prescription drug reimportation bill to open the borders and bring back 
lower priced prescription drugs--

[[Page S4785]]

in most cases, American-made or American-subsidized drugs--instead of 
that, which would lower the costs of some drugs up to 70 percent, it 
was summarily dropped in conference committee under pressure from the 
White House and the pharmaceutical lobby.

  Fifth, at the last minute, the pharmaceutical companies pressured 
their allies in Congress to put in a provision that actually prohibits 
Medicare from negotiating bulk prices. Amazing. We are not even using 
the full leverage of Medicare to negotiate group prices. As a result, 
the Medicare Program cannot use its market power to get lower prices 
for prescription drugs, unlike the VA. We all know the Veterans' 
Administration negotiates deep discounts on behalf of our veterans. We 
actually have a situation now in the case of a husband and wife who are 
retired. The husband is a veteran and he is getting a major discount, 
possibly up to 40-percent discount in his prescription drug prices, and 
his wife, who is on Medicare, has to pay higher rates. That is not fair 
and it is not right. It needs to be fixed.
  Sixth, a month after the bill was signed, all Americans discovered 
the administration deliberately hid certain cost estimates from 
Congress and the American people. These figures contain what some 
thought all along, that this bill would cost more than the $400 billion 
projected. Perhaps the lack of any provisions to help lower prices led 
to its higher cost. And now we hear from the Congressional Research 
Service that, in fact, the administration has likely broken the law in 
keeping that information from us.
  Finally, to add insult to injury, our seniors are now seeing 
political television commercials promoting the new Medicare Program, 
paid for by American taxpayers, during the middle of an election 
campaign, and the ads are not accurate. The ads are not accurate and 
complete and they leave out some of the biggest problems with our new 
private card.
  Let me speak now specifically to the card. First of all, this chart 
is not meant to be a joke. This demonstrates 50 different steps in the 
process of getting a Medicare prescription drug card. You do not 
necessarily have to take all 50 steps, but it is a very confusing 
process to wade through over 30 different cards to determine whether 
one of them is best for you. Your region may have access to other 
regions and may be able to apply for very complicated low-income 
assistance. I should say the low-income assistance is the one positive 
in this card. If you do manage to move through the complexity and a 
senior or a disabled person does qualify, it does provide $600 to help 
them pay for medication. This is very positive.
  The Families USA study looked at this and indicated the application 
process for low-income drug subsidies is unusually cumbersome and is 
built on an untried application infrastructure. As a result, they 
estimate of the 7.2 million low-income seniors who would actually be 
eligible for the extra help--and we want each and every one of them to 
receive it--only 4.7 million will actually receive it because of this 
complexity.
  The latest development is misleading. These so-called discount cards 
may actually mean higher prices also for seniors than they would 
otherwise get now without any new Medicare Program.
  For example, seniors can get lower prices for prescription drugs by 
simply getting their prescriptions filled through a number of sources 
they have right now. There are a number of very good county programs in 
Michigan that I encourage seniors and families to take a look at that 
cost less than the Medicare discount card and actually provide more 
benefit.
  We also found by a study just completed in the House of 
Representatives that purchasing through the Internet can be a less 
costly way to receive discounts. Let me give an example. Go to a Web 
site for the top 10 most used drugs by our seniors, for example, at 
drugstore.com. The yearly cost is $959. There is no annual fee. The 
total cost would be $959. Two other Web sites, the same thing: $990 and 
$993. If you go to one of two of the over 30 different private Medicare 
discount cards, one is called RXSavings, to get the same 10 drugs, 
supposedly at a discount, would cost more--$1,046, and you have to pay 
an annual fee of $29.95 in order to have the privilege to pay more. The 
end result would be $1,075.95. The same is true with Pharmacy Care 
Alliance. It costs you more than what is out there right now as 
discount cards, but you have to pay $19 to get the card, and in the end 
you are paying more. This is not a good deal for our seniors.

  Let me give another example and actually suggest what we ought to be 
doing. I should mention that the average discount card is $30 for a 
senior. You have to have it for a year, and even though you cannot 
change your card for a year, the company giving you the card can change 
the list of the drugs that are discounted every 7 days. So you look at 
all the complexity, through all the cards, you pick the card that 
covers the drugs you use because you need that discounted amount, you 
pay your $30, and then 7 days later the drugs you need are not on that 
card anymore. This is not a good deal for our seniors.
  What is a good deal for our seniors is legislation we have in front 
of us right now to allow us to open the border to safe FDA-approved 
prescription drugs coming back to our local pharmacy from Canada or 
other countries with similar safety precautions where we can literally 
drop prices in half. That is a good deal.
  We have a bipartisan bill in front of us. A very large coalition of 
Senators has been working together. It is time to bring that bill 
forward to the Senate floor and to pass it.
  Now, why is that better? Well, as an example, under one of the 
private cards, after you purchase your private card, Lipitor is listing 
at $71.19. It costs you $74.72 to get it under another card. But if we 
simply passed that bill, it would allow us to bring back those lower 
prices from Canada to the local pharmacy. You could pay $49.85. That is 
true over and over.
  The real way to lower prices is to allow us to get the lowest price, 
whether it is in Canada or the U.S. or other countries where we can 
make sure that the safety is there, and bring back the prescription 
drugs to our local pharmacy. The other way is to give Medicare the 
clout to truly negotiate, as the VA does, to be able to lower prices 
for our seniors.
  This law has so many flaws. I believe we ought to go back to the 
drawing board. We need to pass a meaningful prescription drug benefit. 
We can do so before the law takes effect in 2006. We can do better. I 
encourage our seniors to think very carefully and cautiously before 
proceeding with one of these private discount cards.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I thank my colleague from Michigan who has 
been tireless in her efforts to educate the Senate as well as the 
American people about the prescription drug issue. I don't think there 
is another Senator who has dedicated herself or himself to this issue 
as much as Senator Stabenow. I thank her. She has done a lot in terms 
of letting us all know what is at issue.
  We all understand the basic problem: Prescription drugs cost too much 
money--not just for seniors, but for almost everyone. Unless you are 
one of the fortunate few who has some sort of prescription drug 
coverage that takes care of the cost, you have to reach into your 
pocket, pay out substantial sums of money for drugs and medicines that 
the doctor tells you are absolutely necessary for your health. For some 
who are in strong income positions, this is not a hard choice; you just 
write the check or hand over the credit card and don't think twice. But 
for a lot of people living hand to mouth, trying to count the pennies 
and get by from month to month, it becomes an impossible choice. To be 
told that it is your money or your life is the worst possible choice, 
and that happens over and over again.
  Forty million seniors on Medicare end up paying higher drug prices 
than any other group of Americans. Let me repeat that. Forty million 
seniors under Medicare pay higher drug prices than any Americans. How 
can I say that? I can say that because these are people on fixed 
incomes, many of whom don't have insurance protection for prescription 
drugs. They find themselves in a position where they have to pay the 
full price while someone--their son or daughter who is fortunate to

[[Page S4786]]

have a plan at work--may have a lower cost or a reduced price for 
prescription drugs. Someone who is disabled and on Medicaid, for 
example, has the benefit of the Government bargaining to bring in lower 
prices. Right on down the line you see that person after person has 
protection, but for the senior citizens, they end up paying the highest 
prices.
  I have heard colleagues repeatedly say, that is just the price you 
have to pay in America. We have to have somebody pay inflated prices 
for drugs so the companies have enough money for research.
  Keep in mind that pharmaceutical companies are the most profitable 
economic sector of our economy. They make a lot of money. Though they 
need to make a profit--that is why they exist--though they need money 
for research, the fact is most of these companies pay more money for 
advertising their product than they do for research to find new cures 
for diseases.
  We tried to pass a prescription drug bill that would have finally 
given Medicare the power to bargain down prices and make them 
affordable for seniors. It was rejected by the overwhelming majority of 
the other party and even a few on our side of the aisle because the 
pharmaceutical companies don't want to face any customer with 
bargaining power. Forty million seniors under Medicare would be the 
strongest bargaining unit possible. Instead, we passed a bill which, 
frankly, is going to delay the implementation of a very poor 
substitute, a Medicare drug program, until long after the election. 
Conveniently, this disastrous bill will not go into effect until long 
after the election. In the meantime, though, the Bush administration is 
anxious to tell the seniors that we haven't forgotten you.
  Yesterday they rolled out a discount card to give seniors a break on 
the cost of drugs. Take a look at what that discount card means when we 
actually compared it to the town of Evanston, IL, to what people are 
paying at the pharmacy.
  Lipitor, the largest selling drug in the world, $10 billion in annual 
sales, $6.5 billion in the United States, lowest retail price is 
$68.99. With this great new discount card the Bush administration 
rolled out yesterday, $67.07--a savings of 3 percent. Celebrex, savings 
of 2 percent. Norvasc, it turns out the discount card price is higher 
than the price of the pharmacy.
  The bad part about this new Medicare drug discount card is, once a 
senior signs up for it, they are stuck for a year. That means they pay 
the annual fee and can't go to another private discount card. 
Meanwhile, the company offering the discount can change the number of 
drugs covered and the price of the drug on a weekly basis. So you are 
stuck having paid your membership fee with a situation where the drug 
companies can keep raising prices way beyond what you think they are 
going to be.
  Are they likely to raise prices? Take a look at what has happened to 
the increases in prices since we started debating this: Celebrex has 
gone up 23 percent in cost; Coumadin, very common, 22 percent; Lipitor, 
19 percent; Zoloft, 19 percent; Zyprexa, 16 percent; Prevacid, 15 
percent; and Zocor, 15 percent.
  So when you are saving 2 or 3 percent on the card today and no 
guarantee that it will be there tomorrow and prices are going up in 
this fashion, is it any wonder that seniors are skeptical of this 
administration's commitment to lowering drug prices?
  Secretary of Health and Human Services Tommy Thompson said last week: 
I want to warn seniors; on May 1 we are going to roll out this new 
card, but hold back. Don't commit yourself early. There is still more 
information coming in.
  There certainly is. The information is troubling. These discount 
cards being offered by the Bush administration, frankly, could be a 
bait and switch for seniors. They could end up with a discount today 
that disappears tomorrow. They are stuck with it. They could end up 
signing for a discount card for a drug that is discontinued by that 
same company offering the card next week.
  Take a look at what we could be doing instead of these bait-and-
switch phony discount cards. Take a look at what we could be doing on 
Lipitor: With the Medicare discount card, $67.07. Do you know how much 
they pay in a veterans hospital for that same drug? Thirty-six dollars 
and 48 cents. Why? Because the VA bargains with Pfizer and it brings 
the price down dramatically. This Senate passed a bill prohibiting us 
under Medicare from bargaining with pharmaceutical companies to get the 
best price for seniors. They specifically prohibited it. Why? So the 
drug companies could make more money and seniors would pay more money. 
If you have to go to Canada for that same Lipitor, it is about $50. 
Look at this. America's seniors are paying the highest prices, even 
with the discount card, in comparison to veterans and the price of the 
same drug in Canada. Prevacid is $111 under the Medicare card; it is 
$53.90 in the VA hospitals; it is $56 in Canada. Zocor is $101 under 
the Medicare card; it is $69 in a VA hospital; it is $63.98 in Canada.

  Seniors understand this. I met with them in Chicago yesterday. They 
understand what is happening here. This is an election year push to 
tell seniors across America they are going to get a discount. But they 
know better. They are wise in their years. They have seen a lot of 
politicians come and go. They are not going to be swayed by a discount 
card that offers little or no hope to bringing down the cost of these 
expensive drugs.
  I have written a letter, along with a dozen colleagues, to Secretary 
Thompson, saying, For goodness sake, give seniors a grace period here. 
Don't tie them down with a card that could be disastrous for them and 
their families. With a grace period, if they find out it is not a good 
deal, that would be fair to seniors--something the Medicare discount 
card is not.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Enzi). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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