[Congressional Record Volume 150, Number 74 (Tuesday, June 1, 2004)]
[House]
[Pages H3584-H3589]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      NEW PRESCRIPTION DRUG CARD PROGRAM TOO CONFUSING FOR SENIORS

  The SPEAKER pro tempore (Mr. Feeney). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from New Jersey (Mr. Pallone) 
is recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I listened both on TV and also here in the 
well in person to the previous Special Order delivered by my colleagues 
on the Republican side of the aisle. I realize that they are well 
motivated and have the best of intentions in trying to put forward this 
prescription drug discount card program, but I have to say that I never 
believed it would work or accomplish anything to help seniors with 
their drug prices. Certainly what has happened today and the fact that 
so few seniors have signed up is a strong indication that it is 
unlikely to be effective and that it is unlikely to even be tried by 
most of America's seniors because they realize it is not really going 
to do much in terms of offering them discounts or providing lower 
prescription drug costs.
  I think AARP was quoted in The New York Times today saying that they 
only had 400 seniors nationwide from the membership of their 
organization that had signed up for the prescription drug cards. Their 
card. What is that, about, I do not know, five or so per State? It is 
unbelievable how few. Overall, I think there was another group that 
said about a thousand seniors had signed up for their card. Most of the 
other card sponsors would not even give out numbers. But it is clear 
very few seniors are signing up for it.
  I think it is also true that when the Republican so-called 
prescription drug benefit kicks in in 2 years, in 2006, we will have 
the same phenomena, very few people will sign up, because it really 
does not provide much of a benefit.
  But before I get into the whole issue of the discount drug cards, I 
want to mention, because I think a lot of times we forget, that the 
Democrats in the Congress, when this prescription drug proposal was 
being put forward by the Republicans, basically had a very simple 
proposal. We recognized the fact that Medicare has not traditionally 
included a prescription drug benefit and that the best way to include 
such a benefit was simply to expand Medicare in the traditional way and 
provide for the prescription drug benefit.
  So our alternative to the Republican proposal essentially followed 
the outlines of Medicare part B. I think most seniors realize that 
their hospitalization is covered by Medicare part A and their doctor 
bills are covered by Medicare part B. Medicare part B is essentially a 
voluntary program.
  A senior pays, I do not know what it is now, say approximately $50 a 
month for the coverage of their doctors' bills, with a $100 deductible, 
a 20 percent copay, and with 80 percent of the cost provided by the 
Federal Government. They can go to any doctor they choose and basically 
have it covered, 80 percent of the cost, by Medicare.
  What we proposed, as Democrats, is to do the same thing with 
prescription drugs. Essentially, a senior would have a $25 per month 
premium, with the first $100 being deductible. Starting January 1, the 
first $100 the individual had to put out for prescription drugs they 
had to pay out of pocket; and then, after that, 80 percent of the 
prescription drug costs would be paid for by the Federal Government and 
the individual would pay a 20 percent copay. There was no restriction. 
A senior could go to any pharmacy and buy any drug, name brand, 
generic, whatever was desired or whatever the doctor ordered that was 
necessary.
  Also, we had a provision in our bill, in the Democratic bill, that 
said that the Secretary of Health and Human Services, the administrator 
of the Medicare program, would be required to negotiate lower prices. 
We estimate that that would result in price discounts of about 30 to 40 
percent. I did not just pull that figure out of the air. That is what 
the Federal Government does with the Veterans' Administration. That is 
what they do with the military, the active as well as the retired 
military. They negotiate price reductions, and they get reductions of 
something like 30 and 40 percent.
  So it sounded like a very good idea. Democrats put it forward, 
figured this is an opportunity to expand a very successful program like 
Medicare and to include prescription drug coverage.
  But the Republicans said, no, we cannot do that. Frankly, I think a 
lot of them do not even like Medicare. But, whether they like it or 
not, they are very much into the ideology, at least the House 
Republican leadership and the President are into the ideology that 
everything should be privatized and that Medicare is not a good program 
because it is a public, government-run program and the best thing is to 
privatize.
  So we got into this very confusing privatization of Medicare in order 
to provide some kind of prescription drug benefit, which does not even 
start until the year 2006. So I have all along said it is a very 
political thing to do. If you want to provide a benefit, you provide it 
immediately. You do not wait until after the next election, or really 
way beyond even the next election.
  I want to talk about the discount card program, but if we look at the 
benefit that is supposedly to be provided beginning in the year 2006, 
we find that you have to put more money out of pocket into it than it 
is worth in terms of what a senior actually gets. There is a huge gap, 
some call it a donut hole, where you do not get any benefits, but you 
keep paying the premium. There is no designated premium, and there is 
no guaranteed discount.
  In fact, there is a provision in the Republican-passed bill that was 
sponsored by the Republicans and supported by the President that says 
that the Secretary of Health and Human Services, the Medicare 
administrator, cannot negotiate prices because they do not want the 
Federal government negotiating prices or providing any discount. And, 
frankly, that is because the Republican bill was written by the drug 
industry; and they want to make money. They do not want to lose 
money by having discounts.

  We can get into what is going to happen in 2006, in another couple 
years, because we have a lot of time. But, in the meantime, what the 
Republicans put in their bill was that, beginning June 1, which is 
today, and until the time that the so-called benefit kicks in, more 
than 2 years from now, that they would provide these discount cards. 
And that was, of course, the discussion by my Republican colleagues in 
the last hour and what I would like to get into tonight.
  I would say just the opposite of what my Republican colleagues said 
earlier, that there is no benefit to these discount cards. I do not 
even see how anyone will get a discount because the prices of drugs 
have gone up way beyond whatever discount might be provided. And this 
system is so terribly confusing, there is really no way to

[[Page H3585]]

even figure it out unless you have access to the Internet, which many 
seniors in my district do not. And when they do sit down on the 
Internet, seniors are going to be so confused trying to figure out 
which card to buy or whether to buy any card that, ultimately, they 
will not even bother. That is why so few seniors have signed up.
  Imagine, an organization like AARP, the largest senior organization, 
they are offering a discount card. A lot of people signed up for their 
health care plans, for their medigap plans, and only 400 people 
nationwide signing up for their discount card. That really shows that 
people have a lot of skepticism, as they should, about whether or not 
this is something that is really beneficial to them.
  Now, I just wanted to say that over the last month, in preparation 
for today, June 1, seniors faced the confusing tasks of shopping on 
line, looking on the Internet, and basically having to decide between 
73 discount cards for more than 60,000 prescription drugs at more than 
50,000 pharmacies around the country.
  Now, this chart, to me, kind of tells it all. This is what I call 
mass confusion. This basically describes President Bush's drug card: 
Fifty steps, no promises. Fifty ways of trying to figure out which card 
to buy and whether you are going to get a discount and how it might 
help you, with no promises you are going to get any kind of discount 
whatsoever.
  It is just unbelievable how difficult it is for seniors. There was a 
research firm that concluded, I think it was in today's New York Times, 
that the Medicare Web site was riddled with flaws that make it 
difficult for seniors to identify which card best fits their needs.
  And for those seniors who do not have access to a computer, and there 
are lots of them, they are forced to rely on a 1-800 Medicare number, I 
think my colleagues on the Republican side mentioned that. Now, I tried 
that number a couple of weeks ago. I sat on the line for 30 minutes 
going through different menus before I actually got the chance to talk 
to a human being.
  Does anyone think seniors should have to sit on a line for 30 minutes 
before they are able to even talk to someone about this or have to go 
on the Internet, when they may not even have a computer? The confusion 
is massive.
  The New York Times reported today that the discount cards are off to 
a slow start. Fewer than one million seniors have signed up, well off 
the Bush administration's prediction of 7.3 million. I do not even 
think it is anywhere near the million, to be honest. The New York Times 
reported that AARP said that, ``While it had received thousands of 
inquiries, only 400 people had signed up for its Medicare-approved 
discount card.''
  Prime Therapeutics, which manages drug services for seven Blue Cross/
Blue Shield plans offering cards, said fewer than a thousand people had 
signed up. And several other companies refused to tell The New York 
Times how many people have enrolled, probably because so few have 
enrolled.
  Now, one might ask why, are seniors not more enthused about signing 
up for these discount prescription drug cards? Basically, it is because 
there is no guarantee they are going to get any discount. Medicare 
discount cards are being marketed as providing a 10 to 25 percent 
discount, but there is no requirement in the new law that the card 
sponsors must offer any specific discount. The idea of a savings is 
simply illusory. Prescription drug costs rose 17 percent alone last 
year, and drug prices are reported to have increased dramatically 
between the beginning of the year and now. So any savings have been 
lost to drug cost inflation.
  In today's New York Times, Thomas Dickman, President of Prime 
Therapeutics, a pharmacy benefits company, said in many cases the rise 
in retail drug prices over the last year had wiped out savings already 
negotiated for members of Blue Cross plans his company helps manage.
  Secondly, Mr. Speaker, seniors discovered there is no guarantee that 
a particular card will offer discounts on all the medicines taken by 
seniors. Card sponsors are allowed to pick and choose which drugs will 
be discounted.
  In addition, card sponsors may change the discounted prices on 
medicines weekly. The discount on a senior's medicine that was 
advertised when he or she enrolled may change, but that senior will not 
be allowed to switch to a different card for one whole year.
  If I have not lost you already, Mr. Speaker, let me go on. Imagine 
that a card sponsor can change prices any time they want, but seniors 
have to stick with the card for a whole year. Over the last month, 
seniors have also discovered there is no guaranteed access to any 
particular pharmacy. Each discount card sponsor will determine which 
pharmacies will offer the discount advertised with the cards. A 
senior's usual pharmacy may not participate in the card he or she 
selects.
  Finally, after all this confusion, the actual price paid for 
prescriptions will vary by pharmacy. Because pharmacies can change the 
prices they charge, seniors must check with each of their local 
participating pharmacies to find out which offers the lowest price on 
the drugs covered under their card.
  I do not know how you could not be skeptical and wonder why so few 
seniors have signed up for the discount cards over the last month up to 
today.

                              {time}  2130

  President Bush says, and one of my colleagues from Ohio is here, but 
I will say just one more thing before I yield to the gentleman.
  The President has said that these cards will cut bills by 10 to 25 
percent. A new report out by Families U.S.A. shows prices on the five 
top-selling drugs for seniors increased 9.9 percent over the last year, 
wiping out any savings from the discount card.
  We cannot do anything to help seniors out with their prescription 
drug bills, in my opinion, Mr. Speaker, until we actually do something 
about the drug prices. Democrats are fighting to lower drug costs in a 
straightforward way. We should allow the government to use the 
purchasing power of millions of seniors to negotiate lower drug costs. 
This is what we do with the VA. The gentleman from Ohio (Mr. 
Strickland) has mentioned that before. This is what we do with the 
military, and also we should allow the safe reimportation of drugs from 
Canada and elsewhere.
  Until we do these things and address the price issue, these cards are 
not going to provide any meaningful relief. They are a sad commentary 
on the ruse being pulled by the Republicans and by the President on 
such an important issue for seniors.
  Mr. Speaker, I yield to the gentleman from Ohio (Mr. Strickland), who 
has talked about this many times.
  Mr. STRICKLAND. Mr. Speaker, we are told that these drugs will 
provide a 10 to 25 percent discount. There is no guarantee of that, 
obviously. But we are told that is likely to happen. But here is what 
has happened. The drug companies have raised their prices already. So 
as someone said earlier today, it is like going to a used car lot to 
buy a used car, and there is a sign on the windshield which says 
reduced $300. And the person buying the car does not realize, although 
they are buying a car that has a sign reduced $300, the day before the 
car dealer had upped the price by $400. That is what we are seeing 
here.
  The drug companies have dramatically increased the cost of their 
drugs over the last year. Even AARP has complained that drug companies 
have upped their price. Now these cards come along, and seniors are 
told you are going to get a 10 to 25 percent discount, when the prices 
have already gone up so far it has made any discount meaningless.
  I was here earlier, and I described something that obviously made 
some of my friends on the other side of the aisle quite upset. My 
colleague from Georgia was talking about the gentleman from Ohio, and I 
suppose he was talking about me. The fact is I described what happened 
in this Chamber. They do not like to hear what happened in this 
Chamber, but the American people need to know. This over-700-page bill 
was given to us on a Friday. We began to debate that afternoon and 
evening, debated until 3 a.m. when most normal Americans are asleep.
  Now there is nothing wrong with working late or throughout the night 
if it is necessary; but there was no reason for us to do it in the 
middle of the night, no reason at all. But at 3 a.m.,

[[Page H3586]]

we are considering what is perhaps the most important domestic piece of 
legislation that has come before this House in many, many years, a 
piece of legislation that affects senior citizens. Most senior citizens 
I know are not likely to be awake and paying attention at 3 in the 
morning. The press is not likely to be here at 3 in the morning. In 
fact, they are not here now. So it was done at a time when the American 
people were not able to pay attention and follow the debate.
  And at 3 a.m. in the morning, they called the vote. We are all here. 
A vote usually lasts 15 minutes, sometimes 17 minutes, occasionally as 
long as 20 minutes, but the usual time is about 15 to 17 minutes. At 
the end of that time period, this bill had failed. It had failed 
because it was a bad bill. It did not do what America's seniors wanted, 
and I believe those who were pushing it were quite frankly to have it 
debated in the afternoon.
  Mr. PALLONE. Mr. Speaker, I want to point out, at that point there 
were a majority who voted ``no.'' It was not even like we were waiting 
around to see who was left to vote. Sometimes we wait to see because 
Members have not voted. It was 218, which is a majority, voted ``no.''
  Mr. STRICKLAND. We were all here on the floor, and so the bill had 
failed. Boy, if the American people could have watched the shenanigans 
going on on the other side. Quite frankly, there were a few on our side 
that were stressed by this vote, as well they should have been. It was 
an important vote.
  The reports in the media indicate that they got the President out of 
bed in the morning at perhaps 4 a.m. to use his influence to perhaps 
change some votes. One hour passed and 2 hours passed, and it was 
approaching 6 in the morning.
  One of our colleagues indicated to the media that he had been 
approached. His son is running for his seat, as he is retiring; and it 
was indicated maybe if he would change his vote, his son would get 
$100,000. I do not know what that sounds like to the gentleman, but it 
does not sound like very good public policy practice to me. I think it 
would upset the American people if they fully understood what was going 
on here. So that kind of thing was happening on the floor of the 
people's House.
  A bill that should have had the support of nearly all of us, if it 
had been a good bill, and at 6 in the morning or about 5 minutes to 6, 
leadership finally convinced a couple of freshmen to change their vote. 
When a Member changes their vote after all of the time has expired, 
they cannot do it electronically. The Member has to walk down to that 
table and take a card and sign their name to it and turn it in to the 
Clerk and the vote changes on the wall. That is what happened. A couple 
of freshmen came down the aisle and took a card and signed it; and at 5 
minutes to 6 in the morning, they finally got this bill. It has turned 
sour on them, quite frankly.
  Mr. PALLONE. Mr. Speaker, the gentleman remembers when the votes were 
switched and there were now 218 for it, how long did they wait to close 
the board?
  Mr. STRICKLAND. Mr. Speaker, almost immediately. They finally were 
able to wring out a number of votes. And the reason it was so difficult 
to pass this bill is because it was not a bill that was written for the 
seniors; it was a bill that benefits the pharmaceutical companies and 
the insurance companies.

  If I can just take another moment before I yield back to my friend, 
there are two really terrible parts of this bill, and the first part 
the gentleman mentioned earlier. It explicitly forbids the Secretary of 
HHS from negotiating with the pharmaceutical companies to get cheaper 
drugs for our seniors.
  The Veterans Administration gets discounts for the veterans of this 
country. They are able to save between 40 up to 60 percent on the 
drugs, and yet this legislation specifically prohibits that. Why would 
that be? There is only one reason, and that is because the 
pharmaceutical companies insisted that language be in this bill.
  The second really terrible part of this bill, and it has been 
referred to earlier, it specifically prohibits the reimportation of 
cheaper drugs from Canada unless the Secretary gives his approval, and 
he said he is not going to do that. So what do we have here? We have a 
discount card that provides a level of discount that does not even in 
most cases match the increase that has occurred over the last few 
months.
  Seniors know what is going on. I go to senior groups in my district. 
And I explain to them the specific provisions of this legislation. When 
I talk to them about the big donut hole, the gap in coverage, when I 
explain to them that there is an assets test for an individual like 
$6,000, even a person's burial plot is included in the assets test, 
they audibly gasp and they gasp because they find it difficult to 
believe that their government, this President and the leadership of 
this House of Representatives, would do this. But it is the truth.
  My friends on the other side of the aisle may not want to hear it, 
but American seniors need to hear it because it directly affects their 
lives.
  Mr. PALLONE. Mr. Speaker, I want to follow up on two things that the 
gentleman mentioned with this chart. The gentleman spoke about the 
reimportation from Canada which is not allowed now, and the other is 
negotiating the prices, which the VA does. And the gentleman is a 
champion of the veterans; and even though the Republican Congress and 
the President have cut back on a lot of health care funding for 
veterans, they at least allow the negotiated discount, but they will 
not allow it for seniors.
  Earlier this year, the Committee on Government Reform senior 
Democrat, the gentleman from California (Mr. Waxman), conducted a 
comprehensive report comparing the new Republican discount drug cards 
with three other sets of prices; and what the gentleman did was compare 
the drug card prices to those that individuals pay for the same drug in 
Canada; and, second, compare prices of those for drugs purchased by the 
Federal Government on the Federal Supply Schedule, and those are the 
prices that are negotiated by the Department of Veteran Affairs and are 
available to a number of Federal agencies, including the VA, Department 
of Defense, and also the Coast Guard.
  Now, what this chart shows, and I just took some of the drugs, the 
prices are indicative of the prices available, and let me just show 
some examples. Some people may not know what these drugs are, so I have 
another little sheet which tells me what they are. The first one is 
Aricept, I do not know if I am pronouncing it right, which is basically 
for Alzheimer's. If we look across, some of the prices available 
through the new Medicare cards for Aricept, this drug, Pharmacy Care 
Alliance, $139; Walgreens, $135; RxSavings, $132. This is the Federal 
Supply Schedule which is the negotiated price that the VA uses, $76 
which is half, approximately, of what the discount cards are quoting. 
If we look at Canada, $119, less also than those three.
  I will just go through a few more. Celebrex which is for pain, again 
the discount cards, Pharmacy Care Alliance, $121; Walgreens, $81; 
RxSavings, $85; Federal Supply Schedule, which is negotiated with the 
VA, $62. So they are significantly less. Canada, $38.
  Mr. STRICKLAND. Mr. Speaker, as the gentleman shares these numbers, 
and I see the very significant savings that would be available to 
seniors if we were able to negotiate these discounts for them under 
Medicare, and when I see the great savings that are available to the 
people who live in Canada, I feel real anger because I really do not 
believe there is any way to justify what is happening here other than 
the fact that the pharmaceutical industry owns this Chamber and the 
administration is doing everything they can to protect them.
  Can the gentleman think of another explanation of why it would not be 
possible to have these drugs sold at these reduced rates for our 
seniors? If the veterans can get these prices and if the Canadians can 
get these prices, how can we justify a senior citizen having to pay two 
or three times as much as someone who lives in Canada? It just is one 
of those things that when I talk to my constituents and they bring up 
the subject, I do not have an answer for them because it is irrational. 
There is no rational explanation as to why this government should not 
protect our seniors and allow this discrimination, this unfairness in 
terms of pricing to continue month after month, year after year.
  I really do believe that the leadership of this House, my colleagues 
on the

[[Page H3587]]

other side and the President of the United States, have to answer this 
question to America's seniors: Why are you allowing this price 
discrimination to continue?
  The only reason that I can think of is because the pharmaceutical 
companies are asking them to or demanding them to, which is not right.
  Mr. PALLONE. There is no question about it. I went to a forum a 
couple of months ago, the Bloomberg Forum, a program on TV, and there 
was a professor from Princeton, and the rest of the representatives on 
the show were from the pharmaceuticals, and it was clear that they saw 
this prescription drug benefit and discount card as a way to make more 
money.

                              {time}  2145

  That is all it was.
  I wanted to mention, I am not going to go through all these, because 
you can just generally see how much cheaper it is with the negotiated 
VA price or even lower with the Canadian price, but we keep talking 
about seniors because we care about seniors, and that is what this 
Medicare program is supposed to be all about. But I would like to 
remind people that these figures for Canada, that is for the public at 
large. That is not just for senior citizens.
  In other words, we have to remember I think constantly that people 
who are not seniors are totally subject to whatever the price is, 
whereas in other countries, like Canada, these discount prices are 
available to the general public.
  Mr. STRICKLAND. Mr. Speaker, if the gentleman will yield further, I 
want to thank the gentleman for reminding me and all of us of that 
fact.
  I talk to people frequently in my district who suffer from various 
kinds of arthritis, osteoporosis and other kinds of chronic illnesses 
and diseases, and some of them are unemployed. We have lost a lot of 
jobs in Ohio, especially a lot of manufacturing jobs, jobs that at one 
time provided good health coverage for the worker and the worker's 
family. Many of those jobs are now gone. So these folks, who are maybe 
45, 55, 60 years old, they do not even qualify for Medicare yet, and 
they are out of a job and have lost their health care and need these 
medicines.
  So I want to thank the gentleman for bringing that reality to this 
debate tonight, because there are people who are not seniors who are 
terribly, terribly in need of help with their medications.
  Mr. PALLONE. Mr. Speaker, reclaiming my time, the other thing I 
wanted to point out, and not to necessarily keep pointing to this 
chart, but I think it says so much, you can look on the Internet, we 
have made an issue, and the gentleman and I know well that a lot of 
seniors do not have access to an Internet, but if you do have access, 
what do you need the cards for?
  You can look on the Internet for a Drugstore.com, Costco.com, and 
there are a lot of other Internet sites, where they have the same drugs 
for either about the same cost or slightly less.
  Mr. STRICKLAND. And, if the gentleman will yield, you do not have to 
pay $35 for the card.
  Mr. PALLONE. So one of the things that a number of my seniors told 
me, they said, I have finally got the Web site, and I got on it, and I 
compared the prices to figure out whether or not I wanted to take one 
of these cards; and then I went to one of the other Internet sites, and 
the prices were less. So why buy a card at all?
  It is so absurd. I listened to my colleagues on the Republican side 
tonight, and I know they mean well. I am not suggesting they do not. I 
know they feel strongly about this issue, as we do. But it is either 
their ideology or allegiance to the pharmaceuticals, as the gentleman 
says, or something that is getting in the way of reality here, and it 
should not.
  This is important. We have got to do something that is helpful to 
seniors, not worry about the ideology or whether or not you have got a 
prescription drug company in your district or all these other things 
that they seem to be concerned about.
  Mr. STRICKLAND. Mr. Speaker, if the gentleman will further yield, I 
sometimes wonder if the leadership of this House and the President of 
the United States understand the pain that is being felt by people 
throughout this country.
  I can only speak for my State and my district, but Ohio is part of 
the heartland of this country. It is a State that I think is a 
microcosm of the larger Nation. We have got large cities such as 
Columbus, Cleveland, Toledo, Akron, Cincinnati and Youngstown. We have 
the urban areas. We have large agricultural operations. We have got a 
huge part of Appalachia that is contained in Ohio in small towns.
  What I am trying to say is, I really do believe that, because of the 
State and the district that I represent, that I have an understanding 
of the kind of pain and struggle that people are encountering today.
  With regard to the loss of living-wage jobs, many of the jobs being 
created to replace the manufacturing jobs pay 35 percent or less than 
the jobs that have been lost, and these new jobs oftentimes do not 
provide the kind of health care coverage. So there is a lot of pain 
throughout this country, and I just sometimes think that the President, 
coming from a privileged background as he did, and I do not fault him 
for that, but sometimes I wonder if he actually knows what life is like 
for someone who has an income of $13,000 or $15,000 or $16,000 a year 
and is trying to pay bills and raise kids and especially if they do 
have medical problems. It is a huge, huge issue.
  One of the reasons that I most opposed this bill that passed here in 
the House in the middle of the night was I see it doing nothing to 
really bring down the cost of prescription drugs for seniors. The way 
to bring down the cost is to increase the competition, and you increase 
the competition by allowing less costly drugs to be imported from 
Canada. That would bring down the prices overnight.
  Another way to bring down the cost is to have Medicare be able to 
negotiate for the senior population. If Medicare had a prescription 
drug program that was part of the traditional Medicare operation, 
Medicare would be the largest buyer of prescription drugs probably in 
the entire world, so Medicare would be able to negotiate and bring down 
the price of these drugs.
  But I see nothing in this bill, which has been passed here in the 
middle of the night after a lot of arm twisting, I see nothing in this 
bill that actually deals with what I think is the core problem, and the 
core problem is the cost of the drugs and the fact that they escalate 
17 to 27 percent in a year's time. So you give someone a 10 percent 
discount, and if the drugs have gone up 17 to 27 percent, what have you 
accomplished?
  It seems to me like we are playing games here. Why do we not just say 
that Medicare works? Seniors trust Medicare. They know they have 
hospital coverage through part A, they have physician coverage through 
part B. Medicare part C is for the managed care portion. Why do we not 
just add Medicare part D and make that a prescription drug benefit and 
allow the Secretary to negotiate discounts for all of the seniors? That 
could bring down prices immediately, and it would be easy to 
administer. Seniors could understand how to access the benefit.
  We have created a huge bureaucracy here. My colleagues were talking 
earlier about the hundreds and hundreds and hundreds of new people that 
Secretary Thompson has had to hire just to answer the phones to try to 
get people a timely response.
  Mr. PALLONE. The gentleman might also want to mention the cost paid 
for the ads. They had an initial ad campaign that was $20 million and 
another one subsequent, I think another $18 million, that basically 
promotes the prescription drug cards. In my opinion, they are not 
really honest about what people would get.
  I guess it was the week before the break, a couple of weeks ago, the 
GAO came out and said it was probably illegal to spend the money 
because it was essentially a ruse, it was really propaganda, it was not 
really informational, and they should not have been spending taxpayer 
dollars on it.
  So between the ad campaign and the extra people hired on the phone, 
the cost has got to be unbelievable. I do not know what the cost is, 
but it is huge.
  Mr. STRICKLAND. If the gentleman would yield further, I keep 
referring to my friends on the other side of the aisle and the fact is 
I do think this is an honest debate and there are honest differences, 
but why would we have to

[[Page H3588]]

spend tax dollars to try to convince seniors this is a good thing if in 
fact it is a good thing?
  The General Accounting Office, as the gentleman pointed out, is the 
arm of the Congress that actually oversees the expenditure of tax 
dollars to make sure that they are spent properly and in accordance 
with the law. And it is true they have said, wait a minute, this is 
probably an illegal expenditure of funds because it was not 
informational in nature, it was an attempt to convince seniors that 
this was a good deal when in fact many of us are convinced that it is 
not a good deal for seniors.
  I have had seniors say to me, Congressman, what should I do about 
this card? What card should I choose?
  I have said to them, go talk to your local pharmacist, because I do 
think your local pharmacist may be in the best position to really 
advise you. But many of my local pharmacists are very upset with this. 
They know it is not a good deal.
  As I think about this, something else just came to mind that I think 
the American people need to know. Many already know, but some may not 
have heard. When this bill was first presented to us by the President, 
many conservatives on the Republican side of the aisle were terribly 
concerned that it was going to cost too much; and they in fact 
apparently drew a line in the sand and said, if it costs more than $400 
billion, we simply will not support it. So the President said, it will 
not cost more than $400 billion.
  Then, after the bill passes, we find out that the chief actuary at 
the Department of Health and Human Services had actually determined 
that it was not going to cost $400 billion, but it was more likely to 
cost I think about $551 billion, and he indicates that he was basically 
told if you inform the Congress of the true cost, you lose your job.
  Those kinds of actions are indefensible. I think they are shameless.
  Mr. PALLONE. Reclaiming my time, there is still an investigation 
within the Department as to whether or not that was a violation of law, 
too, because the actuary is supposed to be nonpartisan and give out 
true figures. The fact he was told if you reveal those figures to 
Congress, which he is required to do, that you will lose your job, may 
also have been a violation of the law. We are still waiting for the 
result of that investigation.
  Mr. STRICKLAND. If the gentleman will yield further, it was important 
for those of us who were faced with casting a vote to have that 
information but equally important that the American people deserved to 
know. It is their money that is being spent.
  If we get to the point where we have an administration that 
purposefully works to keep information away from the people, then I 
think that is quite serious. I hope this investigation continues, and I 
hope whoever is responsible is held accountable. Because one of the 
terrible things that can grow out of a situation like this I think is 
people come to distrust what they hear from their government, and if 
this is allowed to happen without being investigated and fully exposed, 
and those responsible punished for such misbehavior, then I just think 
it does great damage to our governmental processes.
  Mr. PALLONE. I do not want to belabor the point, but I just wanted to 
say a few more things before we conclude tonight, and that is that when 
we talk about the reimportation from Canada, and we are going to 
continue to fight to try to get that, we realize it is only a stopgap 
measure, that really what we should have is a comprehensive program 
that provides for lower cost drugs. But it certainly is something that 
could be done in the interim in order to create, as the gentleman said, 
true competition.
  What we are seeing on this chart with these discount drug cards is 
not true competition. This is just a ruse. But, as the gentleman said, 
if you had reimportation from Canada, you would have true competition.
  I have to say I have been a little disgusted with the way that the 
Bush administration has treated this issue. Because from time to time 
the Department of Health and Human Services gives the impression that 
they would maybe allow reimportation. We have even heard some of our 
Republican colleagues come on the Floor and suggest that Republican 
leadership might allow reimportation. But they always put an obstacle 
in the way.
  The argument that they use most frequently is that it is a health or 
safety problem to reimport the drugs. I laugh at that. Not that I 
laugh, it is a serious thing. But it is not a problem. Because, as we 
know, the bill that we tried to pass basically said that you could only 
import drugs from FDA-approved facilities. These are the same 
facilities that are now being used to import the drugs that the name 
brand companies here are using.
  I tried to explain this to one of my constituents the other day. When 
I finally explained it, they just said, how can that be?
  One of the drugs that is on here, I forget which one it is, but one 
of the drugs on here, actually the majority of the raw material is 
manufactured in Ireland, something like 60 or 70 percent, and it is 
packaged in Ireland and sent over here for the major brand companies, 
and then they sell it in the United States. That is an FDA-approved 
facility, where the FDA goes in, inspects it, does the same type of 
thing they would do at a facility in the United States, and it is being 
used now.
  So how in the world, if you say that these drugs have to come from an 
FDA-approved facility in Ireland or France or Italy or wherever it 
happens to be, that there is a safety problem? It is just absurd. We 
are using them now.
  Mr. STRICKLAND. If the gentleman would yield further, I would like to 
point out to my friends that, to my knowledge, the FDA has not 
identified a single death that has occurred as a result of a senior or 
an American taking one of these drugs imported from Canada.

                              {time}  2200

  Not a single case. Now, we have had several deaths occur as a result 
of onions being imported from Mexico, and I do not see any attempt to 
block the importation of food into this country from Mexico and other 
countries.
  It is crystal clear to me as to why this is happening. The 
pharmaceutical companies know that if Americans can get these drugs 
from Canada, pay less for them, that their profitability will be 
affected. I mean, it is as simple as that. So here we have citizens in 
Belgium and France and Germany and England and Italy and wherever, 
Canada, buying drugs and paying less for them than citizens in the good 
old United States of America; and the pharmaceutical companies say, 
wait a minute. If you do anything that is going to interfere with our 
profits, then we will not be able to put adequate resources into 
research, and we will not be able to bring new and better drugs on 
stream. And I say bull feathers, quite frankly, for a couple of 
reasons.
  Much of the research that is used by the pharmaceutical industry to 
develop these new and better drugs is research that is paid for already 
by the American taxpayer through the NIH and other agencies of the 
Federal Government. So the pharmaceutical companies benefit from that 
taxpayer-funded research, and then they get very generous tax benefits 
for the research they do. So here we have a situation where the 
American taxpayer is paying for much of the research, the American 
taxpayer is providing certain very generous tax benefits to 
pharmaceutical companies for the research they do, and the American 
taxpayer is paying two or three times as much for the drugs that those 
companies produce, as do citizens in nearly any other country on the 
face of this Earth. It is gross discrimination against the American 
consumer. We are, in fact, as American consumers, subsidizing the 
pharmaceutical companies, and we are subsidizing the cost of drugs for 
citizens in all of these other countries. That is really a shameful set 
of circumstances.
  Mr. Speaker, I just wish I could have the President to take him to 
Belpre, Ohio, or down in Lawrence County or Marietta or up in 
Youngstown, throughout my district, to sit down with seniors and have 
him try to explain to them why this is a fair system. How can it be 
fair when our citizens are paying the cost, much of the cost that goes 
into producing these drugs and, at the same time, paying more for them 
when they go to buy them to use them. It just does not make sense.
  Mr. PALLONE. Mr. Speaker, I just wanted to say one more thing if I 
could

[[Page H3589]]

in conclusion tonight. One of the things that the Republicans keep 
saying is that they wanted to put this 2-year program with the discount 
drug cards in effect first, before the larger so-called benefit, 
prescription drug benefit, came into effect in 2006 because they wanted 
to show that privatization and the kind of competition, if you will, 
that is created under this very confusing system was the way to go, 
rather than the traditional Medicare; and that was supposedly to show 
the public that what was to come was going to be a good thing.
  I have always said, and that is why I think today, June 1, is so 
significant, that when the public actually sees what this benefit is 
that the Republicans are offering them, they are just going to talk 
with their feet and not participate in it. I think that today, the fact 
that we found out today that for AARP there were like 400 of their 
members who signed up and for the other one I mentioned, with Blue 
Cross and Blue Shield, there were less than 1,000, that that is exactly 
what is happening.
  People have clearly looked into this. If they have a computer, they 
have looked on the Web site and they decided not to participate. And I 
think that is very telling, because what it says to me is, if the 
seniors are not going to participate in this program because they 
realize it is not worth anything, hopefully that sends a message that 
the larger program to come in 2006, which is no less beneficial, in my 
opinion, also is not going to be helping any seniors. I hope that we do 
not have to wait until 2006 and that we can get rid of all of this 
garbage, really, this experiment in confusion before then, before 2006 
and actually get the political wherewithal to pass a real prescription 
drug benefit.
  The gentleman from Ohio and I, because we are on the Committee on 
Commerce and we are on the Health Care Task Force, and we were part of 
the group that put together this alternative proposal that would just 
expand Medicare, and I am just going to say one more time, because it 
is so simple. It is just like part B. Part B is voluntary for their 
doctor bills, and 99.99 percent of seniors participate. Most seniors do 
not even know it is voluntary, because they would not think of not 
participating in it. In that program, you have a $100 deductible, 80 
percent of the cost is paid for by the Federal Government, 20 percent 
co-pay, you go to any doctor you choose. We are just saying do the same 
thing with prescription drugs. Have a $25 month premium. If you cannot 
afford it, then you would not pay it, but most seniors would pay it; a 
$100 deductible, 80 percent paid for by the Federal Government, 20 
percent co-pay and, most important, that there is a negotiated price 
reduction which will bring the cost down, as the gentleman said happens 
in the VA, 40 percent, 50 percent, sometimes even more.
  I am just hoping that when the seniors see that this is worthless and 
they do not participate in it, that we can build some political 
momentum over the next few months or the next year to actually put in 
place a good program, because I would like to see this whole Republican 
plan just repealed. There is nothing to be saved here, no money to be 
saved and no benefit.
  Mr. STRICKLAND. Mr. Speaker, I was listening to my friend on the 
other side earlier, and the chairwoman of the Subcommittee on Health 
indicated that those of us who oppose this bill wanted to do nothing. 
Well, that is so far from the truth. We had an alternative; we just 
were not allowed to present it.
  Our alternative would have provided a prescription drug benefit that 
was a part of traditional Medicare, easily administered, easily 
understood, a program that seniors could trust just as they trust 
Medicare today; and it would have happened, but for the other side who 
just are so into privatization and, quite frankly, many of them do not 
believe in Medicare and consider it socialized medicine. It has even 
been referred to by some Members on the other side as a Soviet-style 
health care system. Well, I think most seniors in this country feel 
pretty comfortable with it, confident in it. They think it is a good 
program, and there is just simply no reason why we could not add a 
prescription drug benefit.
  One of my fears regarding what has happened here is that I do believe 
that this is an attempt on the part of the Republican Party to begin 
the full privatization of Medicare, so that in the years to come, 
Medicare will no longer be a guaranteed benefit with a guaranteed 
premium, but seniors will be forced to face the private sector and all 
that that involves.
  I think this is a very clear-cut choice. I do believe that this is 
going to be a big issue this November. As seniors go to the polls to 
vote, I think they are going to have to choose between those who would 
want to privatize Medicare and those who want to strengthen Medicare 
and to expand it to include a prescription drug benefit.
  Mr. PALLONE. Mr. Speaker, if the gentleman would yield, he will 
remember that when they first proposed the Medicare bill, they had a 
privatization component for not only the prescription drug program but 
the whole of Medicare; I think it was by the year 2010. Essentially, 
you were going to get a voucher, and you would just be given a certain 
amount of money to go around, and it would be the same type of thing. 
You would probably go on some Internet site and you would see what kind 
of programs were available that you could use your voucher to buy. But 
if you wanted to do something that cost more than the voucher, then you 
had to pay out of pocket. And there was so much opposition to that, 
that they ended up making it just a pilot program. But under the law 
that was passed that includes the discount drug card, that pilot 
program does go into effect in 2010 in a number of, I think, 20 percent 
of the different regions of the country. We are not talking just about 
prescription drugs now; we are talking about the entire Medicare 
program.
  Mr. STRICKLAND. Mr. Speaker, if my friend would just yield for a 
final comment, the seniors of this country, the senior citizens in this 
country need to understand that what we are dealing with here is an 
administration that appears to want to obliterate, to get rid of, 
Medicare as we know it, to make it more of a privatized system where 
the government no longer has the ultimate responsibility to carry out 
the promises to provide this defined benefit, guaranteed benefit, 
guaranteed premium, to all seniors, so that regardless of where the 
senior lives, they are going to pay the same premium; regardless of 
where the senior lives, they are going to be entitled to the same 
benefit. We could just mongrelize, if that is a word, this program so 
that depending on what State you lived in or what city you lived in, 
you may have to have a higher premium, you may be denied certain 
medical benefits and so on.
  I do not think that is what America's seniors want, quite frankly. I 
think they want Medicare to be strengthened, to be expanded to include 
a prescription drug benefit; but they want Medicare to remain, and they 
do not want it privatized.
  Mr. PALLONE. Mr. Speaker, I just wanted to say that we are going to 
be down here, and we are going to continue to fight for what we think 
is right on this issue. I know today is June 1, which is the first day 
that this discount drug program goes into effect; but it is very 
important to point out that it has so far failed, and the reason it has 
failed are the same reasons that I think that the larger program itself 
does not make any sense; and we need to keep fighting to make sure that 
the public understands.

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