[Congressional Record Volume 150, Number 128 (Saturday, October 9, 2004)]
[Senate]
[Pages S10981-S10983]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEDICARE MODERNIZATION ACT
Mr. HATCH. Mr. President, I have to respond to the outrageous charges
made by my colleagues on the other side of the aisle regarding the
Medicare statement I delivered yesterday.
I was disturbed by several remarks, especially that seniors have
flatly rejected the Medicare prescription drug benefit. How is that
even possible when the drug benefit doesn't even go into effect until
January 1, 2006?
How is that possible when many Medicare beneficiaries are
participating in the Medicare Drug Discount Card and have seen savings
in their drug costs up to 20 percent per drug? I do not see that as an
outright rejection at all.
My colleagues need to be careful about their charges, especially when
they do not have the facts to back them up. I also take issue with my
colleague's assertion that our prescription drug law is only a drug law
in name. What does he mean by that?
Let me remind the Senator from Illinois that because of this new
Medicare prescription drug law, 40 million Medicare beneficiaries will
have drug coverage if they want it. The bill provides generous
subsidies to low-income Medicare beneficiaries who, today, cannot
afford to purchase drugs.
Prior to enactment of the Medicare Modernization Act, these
beneficiaries had to make tough choices between buying their
prescription drugs and putting gas in their cars. Or buying
prescription drugs or putting food on the table. Or buying prescription
drugs or paying their rent. Once the Medicare prescription drug plan
goes into effect on January 1, 2006, those Medicare beneficiaries will
no longer have to worry. And another point that needs to be raised
regarding this matter--if there were any proposals that deserve to be
recognized as offering a drug benefit in name only, it's the two
Democratic plans of two years ago--plans supported by 50 and 45
Democrats respectively, including the Democratic Leader and Senator
Kerry.
My colleague, Senator Grassley, described those plans a few days ago,
but let me take a few minutes to recap. The first Democratic plan had a
drug benefit that lasted just six years. Talk about offering a drug
benefit in name only.
The second plan didn't even offer a benefit to the vast majority of
beneficiaries. Seventy percent of beneficiaries would not have received
any basic coverage. A plan that shuts out the vast majority of
beneficiaries--how can you call that a drug benefit? Guess what those
70 percent got.
[[Page S10982]]
You are not going to believe this--a five percent discount on their
drugs. Once they spent $3,300 out of pocket, they could qualify for
catastrophic coverage.
Some have taken issue with the MMA, saying that the ``benefit'' stops
after an initial coverage amount. I would like to remind my colleagues
on the other side of the aisle that their basic benefit would have
never even started for 70 percent of beneficiaries! Talk about a
doughnut hole; these beneficiaries didn't even get a doughnut!
The Congressional Budget Office estimated that 66 percent of
beneficiaries wouldn't meet the $3,330 threshold--again, for these
folks, the only help they would get was a five percent discount! A five
percent discount!
I was also extremely disappointed by the arguments made by the
Senator from Illinois and the Senator from California against what some
have termed the ``non-interference'' provision. As I outlined, this
provision has been included in the most prominent Democrat initiatives,
starting with the Clintons' Health Security Act over a decade ago.
Despite that fact, here we are again listening to arguments against it.
Apparently, what was good in a Democratic administration is bad in a
Republican one.
And what was good in a Democratic Senate is bad in a Republican
Senate during an election year. It is almost as if my colleagues were
not listening to what I said. The argument that there is no authority
for the federal government to bargain with the pharmaceutical companies
is getting to be a tired argument. Again, let me repeat myself from
yesterday.
First, the Democrat-sponsored bill from 2000, introduced by Senator
Tom Daschle and supported and cosponsored by 33 Senate Democrats, had a
specific provision which stated the following:
In administering the prescription drug benefit program
established under this part, the Secretary may not (1)
require a particular formulary or institute a price structure
for benefits; (2) interfere in any way with negotiations
between private entities and drug manufacturers, or
wholesalers; or (3) otherwise interfere with the competitive
nature of providing a prescription drug benefit through
private entities.
Again, this provision is from S. 2541, the Medicare Expansion for
Needed Drugs, a bill that was introduced by Senator Daschle and
cosponsored by 33 Democrats, including not only Senator Kerry but also
Senator Durbin and Senator Boxer who spoke against it on the floor
yesterday.
Now, it is every Senator's right to change his or her mind, but you
would think we would hear some discussion about the basis for this
flip-flop. Instead, there is much dialogue about the so-called ``evil''
pharmaceutical companies, and virtually no admission that many
Democrats, many prominent Democrats, have been on record in favor of
the provision they now castigate.
And what is even more outrageous is the fact that they are the ones
who first came up with the concept.
When I hear my colleague from California talk about how the Medicare
drug law does not do much for seniors, let me just remind my colleagues
on both sides of the aisle that she is sadly mistaken.
On the contrary, the Medicare prescription law improves health care
coverage for Medicare beneficiaries by first, giving them the option to
have prescription drug coverage, something that they do not have today
and something Medicare beneficiaries have wanted for close to 40 years!
In addition, the MMA provides beneficiaries new preventive health
benefits including a first-time, Welcome to Medicare Physical
Examination, cardiovascular and diabetes screening and improved
payments for mammography.
It also provided rural health care providers with increased
reimbursement so they may continue to provide Medicare beneficiaries
living in rural areas with quality health care. I don't know about
California or Illinois, but that is most welcome in Utah!
It also provides beneficiaries with a choice in coverage. Seniors
will be able to choose the drug benefit that best suits their needs,
rather than be forced in a one-size fits all government plan which is
what many of my colleagues on the other side of the aisle support.
Another important provision in the bill helps all Americans by
offering them Heath Savings Accounts, HSAs. HSAs are tax-advantaged
savings accounts which may be used to pay for medical benefits. The
inclusion of these new accounts is a significant part of the Medicare
law.
Allowing individuals to take charge of their own savings for future
health care expenses is an important and necessary change in the
direction of our health care policy, and is one that I support
strongly.
Another point raised by my colleague from California is the doughnut
hole. I think she called the doughnut hole a ``benefit shutdown.'' I
agree that the MMA law is not perfect and, yes, this is an area I wish
we could have improved upon. But calling it a ``benefit shutdown'' is
not only wrong, it is deceptive.
The reason it is wrong to call the doughnut hole a ``benefit
shutdown'' is that it would not affect the majority of seniors, and
since our first responsibility is to take care of the very poor
beneficiaries, that is entirely fitting. In fact, the Congressional
Budget Office told us that only one-quarter of Medicare beneficiaries
will have spending that actually reaches the non-coverage window of the
doughnut hole.
Finally, let me remind my colleague from California that the Medicare
prescription drug amendment the Democrats brought to the floor in 2002
sunsetted the Medicare prescription drug program. My good friend from
Iowa, Senator Grassley, the Chairman of the Senate Finance Committee
was talking about this irony the other day on the floor.
Let me recap what Senator Grassley said.
When we were considering the Medicare Tripartisan bill on the Senate
floor on 2002, the first Graham-Kennedy Medicare proposal was not
permanent. Let me read the language from their proposal:
``No obligations shall be incurred, no amounts shall be appropriated
and no amounts expended, for the expenses incurred for providing
coverage of outpatient drugs after December 31, 2010.''
Isn't that just remarkable? And they are calling the MMA a drug plan
in name only? Who are they trying to kid?
The fact that the Graham-Kennedy proposal offered a drug benefit that
ended 6 years after it started is unbelievable. But they sunsetted the
benefit to hide the true cost of their proposal.
At the time, the Congressional Budget Office said it would cost over
$100 billion each year to extend the Graham-Kennedy drug benefit past
the sunset--$100 billion a year without a plan to pay for this enormous
cost!
And the argument made about the MMA not going into effect until after
the election is just more election year political jabber. That is a
ridiculous charge, one that does not even warrant a response. But I
will respond to it by saying that it takes time to put together a
benefit that will cover over 40 million Americans.
It takes time to do it correctly. The agency in charge of the
Medicare program needs time to implement the MMA regulations, accept
bids from plans that wish to participate in the Medicare Advantage
programs and, most important, it takes time to educate Medicare
beneficiaries about the options that will be offered to them.
And let me remind all of you that even the Democrat proposals that
have been considered in the past did not have the Medicare prescription
drug programs go into effect immediately, so that is just a ludicrous
charge.
In addition, I will remind my colleagues that both the Democratic
plans under consideration in the summer of 2002 didn't go into effect
until 2005 because they recognized the same thing we did--that it will
take some time to get a new program like this up and running.
And so, there's no subterfuge behind the 2006 date in the MMA.
Moreover, at least the MMA offers immediate assistance through the drug
card program. Their plans offered nothing until 2005 and then very
little after that!
I would also like to respond to my colleague from California's
comments about the Veterans Administration system and the deficiencies
of which I described this yesterday morning. If she's surprised at the
Republicans for not using the VA model, then my only guess is that
she's even more surprised that her own party didn't.
[[Page S10983]]
No--they wanted to have private plans negotiate with drug companies--
the same approach taken in the MMA. The VA system was not a model for
any Medicare prescription drug plans considered on the Senate floor.
Finally, let me address the idea of importing cheap drugs from
Canada.
First, nobody has a greater desire than I to make prescription drugs
more affordable, particularly for our seniors and the disabled, who
depend so heavily upon pharmaceuticals for their quality of life. I co-
authored the 1984 bill which, in essence, brought generic drugs to the
marketplace to become the force for competition and affordability that
they are today.
My colleagues seem to forget that the MMA does include a provision to
permit the importation of prescription drugs from Canada once a program
is in place that is approved and certified for safety and cost by the
Secretary of the Department of Health and Human Services (HHS). The law
also calls for the Secretary to establish a 13-member task force that
will study proposals to make re-importation safe and cost effective.
HHS Secretary Tommy Thompson has stated he is hopeful the panel's
study will be completed by the end of this year. We shouldn't overlook
the fact that the FDA has documented many cases of what appeared to be
FDA-approved imported drugs that in fact were contaminated or
counterfeit, contained the wrong product or incorrect dose, were
accompanied by inadequate directions, or had outlived their expiration
date.
These drugs would be at a minimum ineffective, and could actually be
harmful or fatal.
The FDA is also concerned with the safety of allowing companies which
are not licensed by states to practice pharmacy to sell prescription
drugs without any limitation on the amount or frequency of drug imports
permitted for individuals.
In addition, reimportation legislation as it is written would allow
risky drugs that are currently available in the U.S. only under strict
safety controls to reimported at any amount or frequency to anyone--
even those who are at high risk to be seriously injured by the
medication.
The FDA underscored these concerns in the Judiciary Committee's
hearing on drug importation last July. The agency stressed that opening
our tightly regulated, closed system of prescription drug distribution
will open the door to counterfeit and otherwise adulterated or
misbranded drugs being widely distributed to an unwitting American
public.
Mr. William K. Hubbard, the Associate Commissioner for Policy and
Planning for the FDA testified before the Senate Judiciary Committee on
this important matter. I would like to take this opportunity to read
some of his testimony to my colleagues:
FDA remains concerned about the public health implications
of unapproved prescription drugs from entities seeking to
profit by getting around U.S. legal standards for drug safety
and effectiveness. Many drugs obtained from foreign sources
that either purport to be or appear to be the same as U.S.
approved prescription drugs are, in fact, of unknown quality.
Consumers are exposed to a number of potential risks when
they purchase drugs from foreign sources or from sources that
are not operated by pharmacies properly licensed under state
pharmacy laws.
Patients also are at greater risk because there is no
certainty about what they are getting when they purchase some
of these drugs. Although some purchasers of drugs from
foreign sources may receive genuine product, others may
unknowingly buy counterfeit copies that contain only inert
ingredients, legitimate drugs that are outdated and have been
diverted to unscrupulous resellers, or dangerous sub-potent
or super-potent products that were improperly manufactured.
Furthermore, in the case of foreign-based sources, if a
consumer has an adverse drug reaction or any other problem,
the consumer may have little or no recourse either because
the operator of the pharmacy often is not known, or the
physical location of the seller is unknown or beyond the
consumer's reach. FDA has only limited ability to take action
against these foreign operators.
These safety concerns are real, and I strongly believe that if we
truly care about seniors and other patients who depend upon
prescription drugs, we should not expose them to what currently amounts
to pharmaceutical Russian roulette.
Now the FDA is working with some of my colleagues on legislation that
would give the FDA greater resources, limit the scope of imports, and
provide greater power to the FDA to police imports. In recent public
comments, former Commissioner Mark McClellan has said these measures
would give the agency the ability to assure the safety of prescription
drugs imported by Canada.
In addition to these safety concerns, however, I am also concerned
that reimported drugs pose a threat to the innovation Americans--and
the rest of the world--have come to expect from our pharmaceutical
industry. Canada and other countries with lower drug prices generally
import superior American products, but impose price controls to keep
costs down.
However, it can cost as much as $1 billion to produce a new drug,
test it, win FDA approval, educate doctors, and make the drug available
to patients. No pharmaceutical company could go through this immensely
expensive process without a chance to recover some of its costs, which
will not be possible if we impose in America--however indirectly--
Canadian-style price controls. I do not believe that sacrificing the
safety and future supply of our drugs by reimportation is the right
answer to the high cost of prescription drugs.
I hope that I have cleared up any misunderstandings that Medicare
beneficiaries have about the MMA law. Again, we gain nothing by
spreading mistruths about the Medicare bill.
The only thing that results from those types of charges is confusion
of Medicare beneficiaries--the very people who all of us are trying to
help. And that is regrettable.
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