[Congressional Record Volume 152, Number 128 (Tuesday, November 14, 2006)]
[House]
[Pages H8613-H8614]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  AUTHORIZING GOVERNMENT TO NEGOTIATE LOWER PRICES WITH DRUG COMPANIES

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 31, 2006, the gentleman from New Jersey (Mr. Pallone) is 
recognized during morning hour debates for 5 minutes.
  Mr. PALLONE. Madam Speaker, last week America went to the polls and 
sent Washington a message that they wanted a new direction. 
Unfortunately, when it comes to the Bush administration, it seems as 
though the voters' call for change has fallen upon deaf ears.
  Yesterday, the New York Times reported that the President and the 
Secretary of Health and Human Services, Mike Leavitt, were 
``strenuously opposed to legislation that would authorize the 
government to negotiate with drug companies to secure lower drug prices 
for Medicare beneficiaries.''
  This is not groundbreaking news. They have said all along that they 
oppose negotiated prices in the Medicare program. Still, given the 
outcome of last week's election, it is disappointing that this 
administration would not even take a moment to reconsider its misguided 
policies.
  Mr. Levitt went on to say, ``I don't believe I can do a better job 
than an efficient market.'' I agree that the secretary hasn't done such 
a good job so far, but he shouldn't get too down on himself, he is not 
entirely to blame. His Republican friends here in Congress have kept 
him from realizing his potential by legally prohibiting him from 
negotiating with drug makers.
  However, if a Democratic Congress passed a law granting him authority 
to negotiate prices with drug manufacturers, I am certain we could 
achieve enormous savings in the Medicare program which could be passed 
on to America's elderly and disabled in the form of more generous 
coverage. Indeed, there is a lot of evidence to support this 
conclusion.
  Take, for instance, a study considered earlier this year by the 
consumer group FamiliesUSA. They compared prices under private 
prescription drug plans participating in Medicare part D to the prices 
available through the Department of Veterans Affairs' health system. 
Their research showed that the government could help lower costs 
substantially. From November 2005 to April 2006, FamiliesUSA found that 
virtually all of the part D plans raised their prices for the majority 
of the top 20 drugs in this study. The median price increase among part 
D plans for the top 20 drugs prescribed to seniors was 3.7 percent.
  Furthermore, for all of the top 20 drugs prescribed to seniors, VA 
prices in April were lower than the lowest prices charged by part D 
plans. The median price difference was 46 percent. In other words, 
Madam Speaker, for half of the 20 drugs, the lowest price charged by 
any part D plan was at least 46 percent higher than the lowest price 
secured for the VA. This is what the secretary must be referring to 
when he talks about the magic of the market.
  My Republican friends argue that allowing the secretary to negotiate 
lower drug prices cannot actually work because the government will act 
to set prices. This is just more of the same old excuses we have been 
hearing all along. The truth of the matter is that the President, 
Secretary Leavitt, and Republicans in Congress are opposed to 
negotiated prices simply because they want to preserve the profits of 
the pharmaceutical industry which this program was really written for.
  I have to be honest here. The American taxpayer is being ripped off 
by the Republican prescription drug law. Pharmaceutical companies have 
reaped record profits since Medicare part D was implemented while the 
American taxpayer has been left holding the bill.
  Before the Republican law went into effect this year, more than 6.5 
million low-income Americans received help for their prescription drug 
bills through Medicaid. Under the Medicaid system, however, States can 
purchase drugs at the lowest available prices or the best price. While 
this was good news for the taxpayer, it certainly cut into the profit 
margins of the pharmaceutical industry. So now those same 6.5 million 
Americans have been moved into the Republican prescription drug plan. 
They are no longer receiving the lower prices, and the higher costs, 
adding up to as much as $2 billion this year alone, will be passed on 
to the American taxpayer.
  This is why American voters rejected the Republican platform last 
week. Republican policies over the past decade have served special 
interests like the pharmaceutical industry, and now the American 
taxpayer is paying the price. Clearly voters are fed up, and they

[[Page H8614]]

want us in Washington to implement change. Democrats are going to heed 
their call, Madam Speaker.
  We have said from the beginning of our campaign for a new direction 
that one of the first things we will do when we take back the House is 
to pass a law that will authorize the government to negotiate lower 
drug prices. We intend to live up to that promise. The savings from 
that program can be used to help eliminate the infamous ``doughnut 
hole'' that millions of seniors have fallen into over the past few 
months.
  While the President and his cronies are threatening to oppose such 
legislation, I think they would be better served to reconsider. It is 
time for us to take a long and hard look at the Medicare part D program 
and see where we can make some improvements. Democrats are not calling 
for repeal of this law, but we are calling for some changes, changes 
that the American voters clearly support. I hope that my Republican 
friends will join us as we work together to improve the Medicare 
program on behalf of America's seniors.

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