[Congressional Record Volume 151, Number 143 (Wednesday, November 2, 2005)]
[Senate]
[Pages S12282-S12284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page S12282]]
MEDICARE PRESCRIPTION DRUG BENEFIT
Mr. WYDEN. Mr. President, as all Members of this body know, the
Federal Government is about to begin one of the biggest expansions in
Federal entitlement programs in our country's history. In a few weeks,
the senior citizens of our country will be eligible for a much-needed
prescription drug benefit, and I rise to talk about that program
tonight.
I am particularly troubled about the fact that the Federal
Government, in launching this program, is not going to be a smart
shopper. You would think, after Katrina, given the huge hemorrhaging in
our Federal budget, this would be a top priority for the Federal
budget, to shop smart, to squeeze every possible bit of value out of
the money that is being spent for critical programs, such as purchasing
prescription drugs for senior citizens. Unfortunately, that is not the
case. At a time when the costs for this program have escalated from
about $400 billion to over $530 billion, with a 10-year estimate for
this benefit projected to cost over $720 billion, what is locked into
current law is an inability to get the best value for the purchase of
those medicines.
It is well understood all across the country that anybody who goes
shopping in the private sector tries to get the most for their dollar
by stressing their bargaining power. Certainly, the senior citizens of
this country have a whole lot of bargaining power. You would think it
would be the position of the Federal Government to try to take
advantage of that bargaining power in order to strike the best deal for
older people and taxpayers. Notice that I emphasize the words
``bargaining power''--not price controls, not rules set in Washington,
DC, a one-size-fits-all approach, nothing that would discourage
innovation among pharmaceutical companies, but simply bargaining power.
Of course, that is what all the smart buyers do in the private sector
today.
Take, for example, a big timber company in my part of the world. They
represent a lot of workers. They go out and bargain with pharmaceutical
companies, insurance companies, and others. They get the most for their
dollar. The small company, on the other hand, doesn't have that kind of
leverage and, to a great extent in this country, individuals and small
companies basically end up subsidizing the big companies and people
with clout in the marketplace. Again, nobody is talking about price
controls. We are talking about economics 101. If you are buying in
volume, if you have the opportunity to use marketplace forces to get
the most for your dollar, you try to do it. You try to use the powerful
forces of economics 101, which is the market power of bulk purchasing.
Unfortunately, that is not going to be done in the area of purchasing
prescription drugs for older people in our country, beginning the first
of the year. In fact, what the Federal Government is doing is
essentially turning on its head the principle of smart shopping. What
the Federal Government would be doing, unless the Congress steps in, is
pretty much like somebody going to Costco and buying toilet paper one
roll at a time. The Federal Government isn't using its bargaining power
to hold down the cost of medicine. At a time when prescriptions are one
of the fastest growing forces in American health care, that defies
common sense.
Some errors are known as errors of omission; others are known as
errors of commission. The fact that the Secretary of Health and Human
Services is prohibited from using the power of bulk buying to hold down
the cost of medicine for seniors is, in my view, one of the most
outrageous errors of commission in the history of health care
legislation. The Medicare prescription drug statute didn't forget to
give the Secretary of Health and Human Services bargaining power to
hold down the cost of medicine; the statute specifically told the
Secretary he could not have such authority to get a fair deal for older
people. So what we have at a time when the cost of the program is going
through the stratosphere, at a time when seniors are trying to decide
whether to sign up, is we have a statute that denies the Secretary of
Health and Human Services the same marketplace tool that any consumer
has in our communities across the country--the power to leverage bulk
purchasing to get a better price. Federal law now denies the Secretary
of Health and Human Services what hundreds of other Federal officials
have--the power to get a better price for the taxpayer.
The Congress did not tell the Army they had to go out and buy one
tent at a time for our soldiers in Iraq. The Congress didn't tell the
Federal Emergency Management Agency they had to buy one mobile home at
a time for hurricane victims. But unbelievably, Congress told Medicare
they have to go out and buy one drug at a time as it relates to other
people. So Medicare can't do what any savvied shopper in our country
does, which is use their leverage in the marketplace to get lower
prices. I think it is outrageous to have this double standard that
prohibits Medicare from doing what all the other consumers in America
can do, and it is time, in my view, to fix that.
Tomorrow, the Senate will have a bipartisan opportunity to do just
that. Senator Snowe and I, along with Senator McCain and Senator
Stabenow and a number of others, will offer an amendment that will lift
the outrageous restriction on the Federal Government's ability to
bargain, and under our bipartisan amendment the Secretary of Health and
Human Services would have the authority to negotiate for lower drug
prices.
I particularly wish to thank Senator Snowe. She and I have worked on
this a number of years. Both of us voted for the prescription drug
legislation. We have the welts on our back to show for it, and even the
night of the vote we said we were going to come back and try to improve
this, particularly to improve it in a way that would make sense for
older people and for taxpayers. So we see our bipartisan amendment as
an effort to follow up on the promise we made to our citizens back
home.
I thank Senator Snowe, who is always trying to find common ground,
bipartisan common ground, which is, of course, the only way you get
important work done in the Senate.
I also want to say a special thanks to Senator McCain, who is
constantly focused on ways to expose waste, get more for the taxpayer
dollar, and also Senator Stabenow of Michigan. Senator Stabenow has
spent enormous amounts of time on a whole host of issues advocating for
older people and the cost of prescription drugs, and I am convinced
that this issue would never have gotten the visibility and the
attention that it warrants were it not for Senator Stabenow's focus on
it.
I also would like to say the same about Senator Feinstein. She and I
agreed on the night of the vote that we were going to join Senator
Snowe in a bipartisan effort to get a fairer and better deal for older
people, and I thank her as well for all of her effort.
Now, Mr. President, the Snowe-Wyden legislation includes specific
language that prohibits price controls and the setting of prices in
America. This is something I feel very strongly about, and I know the
Presiding Officer has a great interest in encouraging innovation and
research. I think we all understand what is going on in the
pharmaceutical field. We are seeing breakthroughs every single day, and
one of the most important steps we can take in the public policy arena
is to foster innovation and research even in my fair flat tax proposal
that I introduced this week, and I know the Presiding Officer has great
interest in tax reform, keeping the research and development tax break
because it is important. So I don't take a backseat to anybody in terms
of encouraging innovation and research, and one of the key ways to
promote innovation and research is to avoid price controls, the setting
of prices in Washington, DC, anything that would lead to policies that
freeze the Government's ability to encourage innovation.
So what we have done in this particular amendment is put in a
statutory restriction on price controls, on the setting of prices so
that it is clear to everyone in the Senate that all we wish to do in
our bipartisan effort is to untie the hands of the Secretary of Health
and Human Services and put Medicare in the position of being a smart
shopper. I cannot for the life of me think why Medicare should not have
the same power to negotiate what other programs and governments have,
that others in the private sector would
[[Page S12283]]
have, and with our bipartisan legislation, Medicare would have that
power.
This is particularly important because savings from negotiations are
only going to come about as it relates to single-source drugs if this
restriction is lifted. Without it, it seems to me we will not have
negotiations for these single-source drugs where there isn't the kind
of competition and marketplace forces. Many single-source drugs are
particularly important for older people. We are talking about drugs
such as Lipator, Zocor, and Prevacid. Lipator, for example, was at the
top of the list of drugs most often taken by older people, and all of
the drugs I mentioned were in the top 20 in terms of drugs used by
seniors.
So when it comes to savings--and this was noted by the Congressional
Budget Office in a letter to me and Senator Snowe last year--it seems
to me that you especially need the power to negotiate when you are
talking about single-source drugs. Given the importance of Lipator in
the marketplace, prevalence in terms of the older population, I hope
that as Senators look at this amendment, they will see the value of
giving the Secretary the power to negotiate. It is particularly
critical when it relates to single-source drugs.
In my view, it is disappointing that the way the underlying
legislation was drafted, the fundamental base bill is going to require
more than a simple majority for us to prevail. Certainly, there are a
lot of special interests in this town that do not want the Federal
Government to be a smart shopper. The number of lobbyists that are
working against this legislation, which I will tell you I think is just
about the most offensive restriction I have seen in health policy, the
number of lobbyists working against our bipartisan amendment is just
staggering. And make no mistake about what the special interests who
oppose our legislation want to do. They would rather soak the taxpayer
and add to the budget deficit than to have to negotiate with the
Federal Government like all other businesses. They are basically
saying: Look, we are special. Don't require us to have to go out and
bargain. We shouldn't have to do what everybody else does.
Everybody else in America who has marketplace clout is allowed to use
it. That is what markets are all about. But because of the power of the
special interests, this restriction prohibits Medicare from using the
kind of marketplace forces that everybody else uses, and it is not
right.
I am sure that seniors and their families across the country are
going to be especially concerned about the fact that this legislation
is going to increase their Part B premiums. But it seems to me that at
a time when their part B premiums are going to go up, when they are
going to have to pay extra costs out of their pocket for copays and
deductibles and other out-of-pocket expenses, that alone would be a
reason why we would look to give Medicare more bargaining power to hold
down the cost of this program.
Seniors are going to have less in their pocket to pay for
prescription drugs and to sign up for this program. But the legislation
was carefully written to make it tough on us and to increase the number
of Senators we would have to have to pass this legislation. We are
going to need more than a simple majority, and I think it is
particularly unfortunate that at a time when seniors are going to see
their Part B premiums go up, that we are not going to give them this
opportunity to seek some real savings in what they have to pay for
prescription medicine.
I hope that Senators are going to be supportive of this legislation.
I am sure when a Senator goes home and discusses prescription drugs,
one of the first things that folks at home are going to ask is: How are
you going to keep the cost down? What are you doing, Senator, to hold
down the cost of medicine? The private sector is doing it, other
Government programs are doing it; what are you doing, Senator, to hold
down the cost of medicine?
Tomorrow, the bipartisan group of Senators I mentioned--Senator Snowe
leading our effort, myself, Senator McCain, Senator Stabenow, and
others--will be saying: Look, we have something that is going to
provide an opportunity for the Federal Government to be a smart
shopper, to use its marketplace clout, and to hold down the cost of
medicine when seniors are seeing an increase in their out-of-pocket
expenses.
The Congressional Budget Office estimates that there is going to be
an 8.5-percent increase in the cost of this program, and the Government
Accountability Office has shown that the prices for existing drugs are
increasing two and three times the rate of inflation.
This is a prescription for a program that does not work. That is a
failure, and I will tell you I don't want to fail our country's
seniors. I voted for the prescription drug law. I want to make it work.
But I will tell you, I am very troubled about the prospect that if
steps are not taken to hold down the costs of this program, there is a
real prospect that a great deal of money will be spent on a relatively
small number of people because we will not have the number of seniors
signing up that we need.
We need to make this program work. It is important. Prescription
drugs are a lifeline. Affordable prescription drugs are essential for
the Nation's older people. Too many of these drugs are simply priced
out of the reach of older people.
At the end of the day, the bipartisan legislation that Senator Snowe
will offer with myself and our bipartisan group is simply common sense.
Let's make Medicare a smart shopper by allowing bargaining power. Let's
stop this idea of forsaking our ability to be a savvy shopper, and let
us make sure that when Medicare goes out and tries to make sure that
the costs of this program are held down, that it has the tools it needs
in its cost-containment arsenal to get the job done right and to make
sure that the costs of this program, for both taxpayers and seniors,
are held down.
Mr. President, I ask unanimous consent that Senators Feinstein,
Dayton, Kohl, and Feingold be added as cosponsors of the legislation.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. Mr. President, this bipartisan measure will be voted on
tomorrow. My sense is that because the day will be very hectic, having
to vote on many amendments, that there will not be much time for
explanation of this measure. Senator Snowe, Senator Stabenow, and
others who spent so much time on this issue are going to want to speak.
I will tell the Senate tonight this is one of the most important issues
to come up in a long time. This program will be one of the biggest, if
not the biggest, expansions of Federal entitlement policy we have ever
seen. Why we wouldn't want to go about this right and make the
Government a smart shopper, a savvy shopper, why we wouldn't want to do
that is beyond me.
What we have is an error of commission. What you saw is, in this
legislation, very powerful special interests said we want a unique set
of rules to apply to us: We shouldn't have to negotiate, even though
everybody else negotiates with the Government and the private sector;
give us a free ride; restrict, as a matter of law, the ability of the
Secretary of Health and Human Services to make sure that seniors and
taxpayers got a square deal.
That is not right. This is about common sense. This is about the
Federal Government being a smart shopper. This is about standing up for
taxpayers and seniors.
I would like to wrap up tonight by reading a bit from the AARP letter
of endorsement for the legislation. Mr. President, I am going to read
briefly from this letter, but I ask unanimous consent that the AARP
letter endorsing the bipartisan measure to contain the cost of medicine
be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
AARP,
November 1, 2005.
The Hon. Ron Wyden,
U.S. Senate,
Washington, DC.
Dear Senator Wyden: AARP supports your amendment to the
Senate fiscal year 2006 Budget Reconciliation bill to provide
for the ability of the Secretary of Health and Human Services
to participate in the negotiations between pharmaceutical
manufacturers and prescription drug plans under the Medicare
Part D program.
[[Page S12284]]
Prescription drug prices continue to rise much faster than
the rate of inflation. AARP's latest Rx Watchdog report
released this week found that prices for nearly 200 of the
most commonly used brand name medications rose 6.1 percent
during the 12 month period from July 2004-June 2005. At the
same time, the rate of general inflation was 3 percent. These
drug price increases particularly hit older Americans, who
use prescription drugs more than any other segment of the
U.S. population.
In two weeks, millions of older and disabled Americans will
have the opportunity to choose prescription drug coverage as
part of their 2006 Medicare benefit options. The new Medicare
prescription drug benefit will help millions of beneficiaries
afford needed medications. Improvements to the Medicare
Modernization Act are necessary to strengthen the benefit and
the Medicare program. We believe the first step is to keep
the drug benefit affordable for beneficiaries as well as
taxpayers.
While the competitive structure already existing in the MMA
may help to bring prescription drug prices down, we believe
that giving the Secretary the authority to participate in
negotiations may also help to make prescription drugs more
affordable for Medicare beneficiaries.
We look forward to working with you and your colleagues on
both sides of the aisle to ensure that the new Medicare Part
D benefit remains affordable over time. If you have any
further questions, please feel free to contact me, or have
your staff contact Anna Schwamlein of our Federal Affairs
staff at 202-434-3770.
Sincerely,
David P. Sloane,
Sr. Managing Director,
Government Relations and Advocacy.
Mr. WYDEN. Mr. President, the letter says, and I will read a bit of
it:
AARP supports your amendment to the Senate fiscal year 2006
Budget Reconciliation bill to provide for the ability of the
Secretary of Health and Human Services to participate in the
negotiations between pharmaceutical manufacturers and
prescription drug plans under the Medicare Part D program.
Prescription drug prices continue to rise much faster than
the rate of inflation. AARP's latest Rx Watchdog report
released this week found that prices for nearly 200 of the
most commonly used brand name medications rose 6.1 percent
during the 12 month period from July 2004-June 2005. At the
same time, the rate of general inflation was 3 percent. These
drug price increases particularly hit older Americans, who
use prescription drugs more than any other segment of the
U.S. population.
In two weeks, millions of older and disabled Americans will
have the opportunity to choose prescription drug coverage as
part of their 2006 Medicare benefit options. The new Medicare
prescription drug benefit will help millions of beneficiaries
afford needed medications. Improvements to the Medicare
Modernization Act are necessary to strengthen the benefit and
the Medicare program. We believe the first step is to keep
the drug benefit affordable for beneficiaries as well as
taxpayers.
While the competitive structure already existing in the MMA
may help to bring prescription drug prices down, we believe
that giving the Secretary the authority to participate in
negotiations may also help to make prescription drugs more
affordable for Medicare beneficiaries.
Mr. President, there is a bit more to the letter, but I think the
Senate can get the general drift.
The AARP, the organization that represents millions of older people,
explicitly tonight endorses our bipartisan amendment. They have pointed
out that the cost of these medications, the ones that are so important
to older people, are going up double the rate of inflation.
Let me emphasize that to the Senate. The drugs that seniors use, the
prices are going up double the rate of inflation.
So we need some serious tools to contain these costs. At a time when
the Federal Government ought to be using more effective tools to hold
down the costs of medicine, we have locked into law a restriction on
the ability of the Government to do what smart shoppers in America do
every single day, and that is to use their marketplace clout, bulk
purchasing power, to get the best value for them and their families. It
is time to lift this outrageous, offensive restriction that is now in
Medicare law that prevents the Federal Government from being a smart
shopper. It is now time to stand up for taxpayers and stand up for the
older people in this country. The Senate will have a chance to do that
when it votes on the bipartisan amendment tomorrow that has been filed
tonight, will be offered tomorrow, by Senator Snowe, a bipartisan
group. I hope my colleagues will support it resoundingly.
I yield the floor.
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