[Congressional Record Volume 152, Number 31 (Monday, March 13, 2006)]
[Senate]
[Pages S2020-S2021]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   SNOWE-WYDEN AMENDMENT TO LIFT NEGOTIATION RESTRICTIONS ON MEDICARE

  Mr. WYDEN. Mr. President, on this difficult evening, I wish to take 
just a few minutes to talk about the budget.
  Last Congress, Senator Snowe and I, on a bipartisan basis, saw 51 
Members of the Senate support our bipartisan legislation to lift the 
restriction on Medicare so that program could bargain to hold down the 
cost of medicine. That vote, where a majority of Senators went on 
record in supporting the effort to hold down the cost of medicine, took 
place before the program went into effect. It seems to me everything 
that has happened over the last few months, since a majority of the 
Senate voted for our bipartisan amendment, supports our case for 
passing that legislation now.
  We will be offering our bipartisan proposal, the Snowe-Wyden 
amendment, later this week, and I wish to take just a few minutes to 
outline why it is so important.
  The American Association of Retired Persons says it all in a letter 
endorsing our bipartisan Snowe-Wyden proposal. I ask unanimous consent 
that the AARP letter endorsing the Snowe-Wyden legislation be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                         AARP,

                                                   March 13, 2006.
     Hon. Ron Wyden,
     U.S. Senate,
     Washington, DC.
       Dear Senator Wyden: AARP supports your amendment to the 
     Senate fiscal year 2007 budget bill to provide for the 
     ability of the Secretary of Health and Human Services to 
     participate in negotiations with pharmaceutical manufacturers 
     under the Medicare prescription drug program.
       Prescription drug prices continue to rise much faster than 
     the rate of inflation. AARP's latest Rx Watchdog report 
     released in February 2006 found that prices for nearly 200 of 
     the brand name medications most commonly used by older 
     Americans rose 6.0 percent during the 12 month period from 
     October 2004-September 2005. At the same time, the rate of 
     general inflation was 3.3 percent. These drug price increases 
     particularly hit older Americans, who use prescription drugs 
     more than any other segment of the U.S. population.
       Millions of older and disabled Americans now have the 
     opportunity to choose prescription drug coverage as part of 
     their 2006 Medicare benefit options. To date, millions of 
     Medicare beneficiaries have enrolled in the program and as a 
     result are realizing savings on their prescription drugs. 
     However, 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 we have seen that the current competitive structure 
     existing in the MMA has helped 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, as AARP notes--and they publish an Rx 
Watchdog report--they have noted that for the nearly 200 brand-name 
medications most commonly used by older people, the costs of those 
medicines have gone up twice the rate of inflation. So all Americans 
get hit by prescription drug costs. Particularly hard hit are older 
people, and low-income older people, and people with very big 
prescription drug bills. As noted by AARP, these seniors are hit more 
than any other segment of the U.S. population by prescription drug 
costs.
  At a time when the costs of this program and the costs of Government 
have gone through the stratosphere, one would think the Government 
would be doing everything possible to hold down costs. Yet, 
unfortunately, in the original prescription drug legislation, a bizarre 
restriction was put in place that literally bars the Government from 
being a smart shopper. Everybody else in this country tries to use 
their clout in the marketplace to get the best possible deal, but not 
Medicare--not Medicare, which offers a benefit to more than 30 million 
older people. They are not using the opportunity to go into the 
marketplace and hold down the costs.
  I compare the Government's approach to buying prescription drugs 
under Medicare to somebody going into Costco and buying toilet paper 
one roll at a time. Nobody would shop that way. No savvy shopper would 
ever give up, even before they walked into the store, the opportunity 
to hold down the costs. But that is what Medicare is doing, and that is 
what Senator Snowe and I want to change.
  Now, we have seen over the last couple of months older people and 
their families absolutely up in arms, up in arms about the frustrations 
of getting this prescription drug program out and usable in a 
commonsense kind of fashion. It is far too complicated. There are far 
too many alternatives. Some seniors say that even with a Ph.D. they 
can't sort it out. But what is especially troubling is at a time when 
the costs of the program continue to go up and up and up, the 
Government isn't even taking commonsense steps to hold down the cost of 
these medicines.
  So what Senator Snowe and I have tried to do in a bipartisan effort 
for going on 3 years now is to make sure that when necessary the 
Secretary of Health and Human Services can negotiate for the best 
possible prices of prescription drugs for older people.
  Now, this isn't price control. Specifically, our bipartisan amendment 
stipulates that the authority granted here

[[Page S2021]]

cannot be used to set prices or to set a uniform formulary. Nowhere in 
this amendment is there a call for price controls or anything that can 
be interpreted as price controls. This is about using marketplace 
forces. This is about using the market just as millions of Americans do 
every day to hold down the cost of medicine.
  Senator Snowe and I believe one of the most flagrant mistakes in the 
Medicare law--and both of us voted for that legislation--was to write 
into law that the Secretary could not have bargaining power under any 
circumstances at all. We have seen drug prices increase, as AARP has 
noted, far higher than the rate of inflation. The Wall Street Journal 
has reported price spikes. The Congressional Budget Office has 
indicated there can be savings from negotiations in the area of single-
source drugs that do not face competition, and suffice it to say, many 
of the single-source drugs are ones that are commonly used by Medicare 
patients, such as Lipitor and Zocor and Prevacid.
  I will wrap up, Mr. President, with only a couple of additional 
points because I know my colleague from Washington has been very 
patient. The authority that Senator Snowe and I seek to grant to the 
Department of Health and Human Services is the authority that Secretary 
Thompson at his last press conference as head of the Department of 
Health and Human Services, said he wished he had. So the last head of 
that agency, at a time when they were moving to implement the 
prescription drug law, said specifically he wished he had had this 
authority.
  The last point I would make, Mr. President, is that some have said: 
Well, seniors are seeing some savings already. If that is the case, we 
are glad to see it, but it comes about because the basic benefit covers 
75 percent of the cost of the drug after the $250 deductible. So the 
question for the Senate is where are you going to look in order to hold 
down the cost of this program? Are you going to look at taxpayer 
subsidies? Are you going to look at marketplace forces? Senator Snowe 
and I believe that at a time when the costs of Government are soaring 
and the costs of this prescription drug benefit are soaring, we ought 
to use commonsense marketplace principles to hold down the cost of 
medicine, not continue to rely on taxpayer subsidies, and that is what 
our amendment is all about.
  Mr. President and colleagues, I do not know of a single private 
sector entity, whether it is a timber company in my home State of 
Oregon, or a big auto company in the Midwest, that when they are buying 
something in bulk, say: What about the possibility of some discounts? 
So why shouldn't Medicare ask that question, just to have that 
authority so as to make marketplace forces work? Why wouldn't we want 
to assure that there is every possible tool to help seniors hold down 
the costs of medicine?
  We will debate this at greater length in the course of the week. As I 
noted, Senator Snowe and I received 51 votes, a majority of the Senate, 
for this legislation before the program went into effect. I would just 
say to our colleagues tonight, everything that has happened in the last 
few months suggests that there is an even better case for the 
bipartisan Snowe-Wyden amendment to hold down the costs of medicine.
  Mr. President, with that I yield the floor.

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