[Congressional Record Volume 151, Number 14 (Thursday, February 10, 2005)]
[Senate]
[Pages S1272-S1273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  S. 345. A bill to amend title XVIII of the Social Security Act to 
deliver a meaningful benefit and lower prescription drug prices under 
the medicare program; to the Committee on Finance.
  Mr. DURBIN. Mr. President, I would speak for a moment, if I could, on 
an issue which is near and dear to not just seniors but their families.
  Last night, CMS Administrator Mark McClellan acknowledged the 
cumulative cost of the Medicare prescription drug program between 2006 
and 2015 will reach $1.2 trillion. Although Mr. McClellan said the 
number would be reduced to $724 billion after seniors pay their 
premiums and the Federal Government is reimbursed by States for 
coverage of their Medicaid populations, it is still much higher than 
originally thought. As recently as September, Mr. McClellan said this 
program would only cost $534 billion.
  Remember this program? This was President Bush's Medicare 
prescription drug program.
  Now, we all understand that Medicare did not cover prescription 
drugs. Seniors need that coverage because drugs are so expensive, and 
drugs are essential for them to maintain their health and stay 
independent and strong for a long period of time. But when we got into 
this debate on the floor of the Senate about creating this program, the 
pharmaceutical companies lined the hallways around the Senate with men 
in expensive three-piece suits and Gucci loafers and said: Whatever you 
do, don't touch the profits of the pharmaceutical companies.
  Too many Senators on both sides of the aisle decided that the profits 
of the pharmaceutical companies were more important than the cost of 
the drugs for seniors. So, in the bill we included a provision that 
prohibits Medicare from negotiating with the pharmaceutical companies 
to get lower prices for drugs for seniors.
  What does it mean? It means every single year the cost of 
prescription drugs under this Medicare program will inflate like the 
cost of prescription drugs for people across the United States.
  Take a look at the drug price comparisons, just for the years 2005 
and 2016, on some common drugs listed on this chart--what we 
anticipate, using the Bush Administration's calculations for the rate 
of increase for prescription drugs, will happen to their costs.
  Look at Norvasc. It will go from $170 to $525 in 2016; Plavix, $230 
to $710; Prevacid, $120 to $374; and Zocor, $124 to $383.
  So in this period of time, if you want to know why the prescription 
drug program's costs are going through the roof, it is because the cost 
of the drugs is going through the roof. Unless and until Medicare can 
negotiate the price of these drugs, and keep them reasonable for 
seniors, there is no way in the world this program is going to be cost-
effective. It is interesting to me that when this estimate of cost came 
out, Senator Judd Gregg of New Hampshire, the Republican chairman of 
the Budget Committee, said $400 billion was the original cost of this 
program, and we have to cut the benefits back to hit that cost, instead 
of saying, why don't we find a way to reduce the pharmaceutical company 
profits so we can keep the drugs seniors across America are buying at 
reasonable prices.
  Drug prices are going to continue to rise. The price of 26 drugs most 
commonly used by seniors increased 21.6 percent, on average, over the 
last 3 years, and they will continue to increase in the future.
  I have gone through some basic drugs on this chart, but I want to 
tell my friends who are following this debate, this is no surprise. 
Those of us who voted against the bill said exactly this would happen: 
If you do not contain the cost of drugs, you cannot afford this 
program. It will explode in the outyears, and future Members of 
Congress and Presidents will decide to cut back on the benefits under 
the program rather than face the reality of what we did in passing this 
legislation.
  Medicare actuaries estimate the prescription drug benefit premium 
will increase from $35 a month under the President's plan in 2006 to 
$68 a month in 2015. Deductibles will increase. I think we are at a 
point where we have to acknowledge the obvious.

  Let me say a word about pharmaceutical companies. We want the 
pharmaceutical industry to be strong and profitable because in their 
profits is the money for research for new drugs. That is essential for 
America's health and the world's health. But what we find now is that 
pharmaceutical companies in America are spending more money on 
advertising than they are on research. You cannot turn on the 
television without finding another ad for another drug. Why? Because 
they want the consuming public to walk into their doctor's office and 
say: Doctor, I beg you, give me the little purple pill. And doctors do. 
It is an expensive pill. It may not be the necessary and required pill, 
but doctors do it. And if you sell more of those little purple pills, 
the pharmaceutical companies do quite well.
  Take a look at the profitability of the Fortune 500 drug companies 
versus the profits of all Fortune 500 companies in the year 2002. When 
you take a look at the drug companies on these red bars, and the other 
companies on the yellow bars, you can see exactly the difference. 
Profits as revenues: 17 percent for drug companies, 3.1 percent for 
other companies. Profits as a percentage of equity: 27.6 percent for 
pharmaceutical companies, 10.2 percent for the rest of the Fortune 500 
companies.
  They are extremely profitable companies. We want them to make 
profits, but not at the expense of seniors who cannot afford to pay.
  Mr. President, I want to give my colleague an opportunity to speak 
here. I would say the most important thing I can tell you today is 
there is an answer. I am reintroducing a bill today that I believe will 
go a long way to reducing the cost of prescription drugs. The Medicare 
Prescription Drugs Savings and Choice Act instructs the Secretary of 
HHS to offer a nationwide Medicare-delivered prescription drug benefit 
in addition to the current PDP and PPO plans available in the 10 
regions. It instructs the Secretary of HHS to set a uniform national 
premium of $35 for the first year, and it instructs the Secretary of 
HHS to negotiate group purchasing agreements on behalf of Medicare 
beneficiaries.

[[Page S1273]]

  This is the way to lower the costs of drugs. I am honored that my 
proposal, the legislation which I am introducing, has been endorsed by 
the AFL-CIO, AFSCME, the Alliance for Retired Americans, the American 
Federation of Teachers, the American Public Health Association, the 
American Nurses Association, Campaign for America's Future, Center for 
Medicare Advocacy, Consumers Union, Families USA, and a host of other 
groups. It is an indication to me that they know, for their membership 
and seniors and Americans in general, this legislation is going to be 
an important step forward.
  I invite my colleagues to join me in sponsoring this legislation so 
we can bring the cost of drugs within the reach of senior citizens and 
keep a prescription drug program that is affordable.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Mr. President, I commend my colleague for his leadership 
on this issue. As I travel around my State, as he does his, too, the 
No. 1 issue I hear about from people is the cost of health care today.
  We had an opportunity when we passed the Medicare prescription drug 
bill to deal with that issue. We did not. He has introduced legislation 
today that will focus on that incredibly important issue for our 
country. I thank him for his leadership.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 345

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Prescription Drug 
     Savings and Choice Act of 2005''.

     SEC. 2. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG 
                   PLAN OPTION.

       (a) In General.--Subpart 2 of part D of the Social Security 
     Act is amended by inserting after section 1860D-11 the 
     following new section:


           ``MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION

       ``Sec. 1860D-11A. (a) In General.--Notwithstanding any 
     other provision of this part, for each year (beginning with 
     2006), in addition to any plans offered under section 1860D-
     11, the Secretary shall offer one or more medicare operated 
     prescription drug plans (as defined in subsection (c)) with a 
     service area that consists of the entire United States and 
     shall enter into negotiations with pharmaceutical 
     manufacturers to reduce the purchase cost of covered part D 
     drugs for eligible part D individuals in accordance with 
     subsection (b).
       ``(b) Negotiations.--Notwithstanding section 1860D-11(i), 
     for purposes of offering a medicare operated prescription 
     drug plan under this section, the Secretary shall negotiate 
     with pharmaceutical manufacturers with respect to the 
     purchase price of covered part D drugs and shall encourage 
     the use of more affordable therapeutic equivalents to the 
     extent such practices do not override medical necessity as 
     determined by the prescribing physician. To the extent 
     practicable and consistent with the previous sentence, the 
     Secretary shall implement strategies similar to those used by 
     other Federal purchasers of prescription drugs, and other 
     strategies, to reduce the purchase cost of covered part D 
     drugs.
       ``(c) Medicare Operated Prescription Drug Plan Defined.--
     For purposes of this part, the term `medicare operated 
     prescription drug plan' means a prescription drug plan that 
     offers qualified prescription drug coverage and access to 
     negotiated prices described in section 1860D-2(a)(1)(A). Such 
     a plan may offer supplemental prescription drug coverage in 
     the same manner as other qualified prescription drug coverage 
     offered by other prescription drug plans.
       ``(d) Monthly Beneficiary Premium.--
       ``(1) Qualified prescription drug coverage.--The monthly 
     beneficiary premium for qualified prescription drug coverage 
     and access to negotiated prices described in section 1860D-
     2(a)(1)(A) to be charged under a medicare operated 
     prescription drug plan shall be uniform nationally. Such 
     premium for months in 2006 shall be $35 and for months in 
     succeeding years shall be based on the average monthly per 
     capita actuarial cost of offering the medicare operated 
     prescription drug plan for the year involved, including 
     administrative expenses.
       ``(2) Supplemental prescription drug coverage.--Insofar as 
     a medicare operated prescription drug plan offers 
     supplemental prescription drug coverage, the Secretary may 
     adjust the amount of the premium charged under paragraph (1).
       ``(3) Requirement for at least one plan with a $35 premium 
     in 2006.--The Secretary shall ensure that at least one 
     medicare operated prescription drug plan offered in 2006 has 
     a monthly premium of $35.''.
       (b) Conforming Amendments.--
       (1) Section 1860D-3(a) of the Social Security Act (42 
     U.S.C. 1395w-103(a)) is amended by adding at the end the 
     following new paragraph:
       ``(4) Availability of the medicare operated prescription 
     drug plan.--
       ``(A) In general.--A medicare operated prescription drug 
     plan (as defined in section 1860D-11A(c)) shall be offered 
     nationally in accordance with section 1860D-11A.
       ``(B) Relationship to other plans.--
       ``(i) In general.--Subject to clause (ii), a medicare 
     operated prescription drug plan shall be offered in addition 
     to any qualifying plan or fallback prescription drug plan 
     offered in a PDP region and shall not be considered to be 
     such a plan for purposes of meeting the requirements of this 
     subsection.
       ``(ii) Designation as a fallback plan.--Notwithstanding any 
     other provision of this part, the Secretary may designate the 
     medicare operated prescription drug plan as the fallback 
     prescription drug plan for any fallback service area (as 
     defined in section 1860D-11(g)(3)) determined to be 
     appropriate by the Secretary.''.
       (2) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w-
     113(c)(3)) is amended--
       (A) in the heading, by inserting ``and medicare operated 
     prescription drug plans'' after ``Fallback plans''; and
       (B) by inserting ``or a medicare operated prescription drug 
     plan'' after ``a fallback prescription drug plan''.
       (3) Section 1860D-16(b)(1) of such Act (42 U.S.C. 1395w-
     116(b)(1)) is amended--
       (A) in subparagraph (C), by striking ``and'' after the 
     semicolon at the end;
       (B) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(E) payments for expenses incurred with respect to the 
     operation of medicare operated prescription drug plans under 
     section 1860D-11A.''.
       (4) Section 1860D-41(a) of such Act (42 U.S.C. 141(a)) is 
     amended by adding at the end the following new paragraph:
       ``(19) Medicare operated prescription drug plan.--The term 
     `medicare operated prescription drug plan' has the meaning 
     given such term in section 1860D-11A(c).''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     101 of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2071).
                                 ______