[Congressional Record Volume 151, Number 18 (Thursday, February 17, 2005)]
[Senate]
[Pages S1658-S1659]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. STABENOW (for herself, Mr. Carper, Mr. Kennedy, Mr. 
        Schumer, Mr. Bingaman, and Mr. Johnson):
  S. 445. A resolution to amend part D of title XVIII of the Social 
Security Act, as added by the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, to provide for negotiation of fair 
prices for Medicare prescription drugs; to the Committee on Finance.
  Ms. STABENOW. Mr. President, today I am introducing the Medicare 
Prescription Drug Price Reduction Act of 2005, and am pleased to be 
joined by my colleagues, Senators Carper, Kennedy, Schumer, Bingaman, 
and Johnson.
  This legislation is very simple and very straightforward: it would 
allow the Secretary of Health and Human Services to negotiate directly 
with pharmaceutical manufacturers on behalf of our seniors and the 
disabled to get the lowest possible prices.
  Last week we learned that the Medicare prescription drug benefit will 
cost more than 1 trillion dollars--$1.2 trillion to be exact--just for 
the years 2006 through 2015.
  Some of our colleagues are responding to the news of the $1.2 
trillion price tag with plans to reduce the benefit. But the benefit as 
currently structured is far from comprehensive. Seniors are responsible 
for $420 in premiums, and a $250 deductible before they get one penny's 
worth of help towards the cost of their prescription drugs. Once the 
benefit kicks in, they will face a hefty copayment, and many will fall 
into the infamous ``hole'' in the benefit and--at the same time they 
continue to pay premiums--not get any assistance at all.
  Even with a $1.2 trillion pricetag, our seniors will have to shoulder 
two-thirds of the cost of their prescription drugs. Neither the seniors 
and disabled, nor the taxpayers, should be paying so much for so 
little.
  Last week's news of the cost of the benefit makes it clear that we 
must give Medicare the ability to use the market power of 41 million 
people to secure the lowest prices possible for seniors, the disabled, 
and the American taxpayer.
  Our response to the new cost estimate shouldn't be to reduce the 
already meager benefit but to use our dollars more efficiently. The 
change that my colleagues and I are seeking would allow us to improve 
the drug benefit--by lowering the cost of the drugs, we could fill in 
the gaps in coverage and provide a more meaningful benefit.
  Former HHS Secretary Thompson said at his December 3rd resignation 
press conference that he would have liked to have had the opportunity 
to negotiate lower drug prices.
  I expect Secretary Thompson knows what every smart buyer knows: the 
more you are buying of anything, the better deal you get. We all know 
that Sam's Club gets the best prices on breakfast cereal, batteries, 
and paper towels because they represent a huge market.
  And now that Secretary Leavitt is tasked with running the program, we 
should give him as many tools as possible to run this program at the 
lowest possible cost.
  Today the only entity in this country that cannot bargain for lower 
group prices is Medicare. The States, Fortune 500 companies, large 
pharmacy chains, and the Veterans' Administration use their bargaining 
clout to obtain lower drug prices for the patients they represent.
  Medicare should have that same ability. It doesn't make any sense to 
prohibit the Secretary from using the clout of our 41 million seniors 
to help get them the best possible prices on prescription drugs.
  I urge my colleagues to join me in passing this commonsense approach 
to providing real savings for our seniors and the disabled, and 
ensuring the most efficient use of taxpayer dollars.
  I ask unanimous consent that the text of the bill be printed in the 
Record.

[[Page S1659]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 445

       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 
     Price Reduction Act of 2005''.

     SEC. 2. NEGOTIATING FAIR PRICES FOR MEDICARE PRESCRIPTION 
                   DRUGS.

       Section 1860D-11 of the Social Security Act (42 U.S.C. 
     1395w-111) is amended by striking subsection (i) (relating to 
     noninterference) and by inserting the following:
       ``(i) Authority To Negotiate Prices With Manufacturers.--In 
     order to ensure that each part D eligible individual who is 
     enrolled under a prescription drug plan or an MA-PD plan pays 
     the lowest possible price for covered part D drugs, the 
     Secretary shall have authority similar to that of other 
     Federal entities that purchase prescription drugs in bulk to 
     negotiate contracts with manufacturers of covered part D 
     drugs, consistent with the requirements of this part and in 
     furtherance of the goals of providing quality care and 
     containing costs under this part.''.
                                 ______