[Congressional Record Volume 153, Number 9 (Wednesday, January 17, 2007)]
[Senate]
[Pages S643-S644]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           PRESCRIPTION DRUGS

  Ms. STABENOW. Madam President, I felt it was important today to come 
to the floor and speak about the efforts of the House of 
Representatives to lower the cost of prescription drugs for our 
seniors. There has been a measure passed that will require that the 
Secretary of Health and Human Services negotiate prices. It sounds like 
something that is pretty straightforward and common sense: to negotiate 
the very best price for our seniors and people with disabilities.
  I know my distinguished colleague and friend, the now-ranking member 
of the Finance Committee, has spoken about his objection to that 
approach. I think it is important that we also have voices speaking out 
about why we believe this makes sense for Medicare, for taxpayers, for 
our seniors, and for the disabled.
  The facts really bear out that this makes sense. We are not talking 
about whether we do research and development on new breakthrough drugs 
versus being able to get prices that are affordable for our seniors. 
There is an ample way to be able to do both. In fact, we, as taxpayers, 
provide a tremendous amount of the money that is currently being spent 
on R&D, and it is important we know we can afford the medicine that we 
are helping to pay to have developed.
  A report by Families USA, released last week, looked at the prices of 
prescription drugs most commonly used by our seniors. The conclusion 
could not have been more clear. The report compared the prices the 
private Medicare Part D plans charge now and the prices charged by the 
Department of Veterans Affairs, the VA, which negotiates, as we all 
know, for the best price on behalf of America's veterans. The report 
showed, again, what we have been seeing over the past year. The lowest 
drug prices charged by the private Part D plans are significantly 
higher than the prices obtained by the VA.

  Among the top 20 most used drugs, the median difference between the 
lowest Part D plan and the lowest VA plan is 58 percent; 58 percent 
difference between what the VA is able to do for veterans and taxpayers 
versus what is happening under the Medicare Part D plan. In other 
words, for half of the drugs our seniors need most, the highest price 
charged by the private drug plans is almost 60 percent higher. That 
makes no sense. I hope we will act to change that.
  It can be a lot worse, however. When we look at half of the top 20 
drugs, the highest price charged by a private plan is twice as high as 
the average price through VA for the lowest priced drugs. Seniors and 
people with disabilities who get their drugs through Medicare are 
forced to pay more because the law actually prohibits the Secretary of 
Health and Human Services from negotiating the best price. It is not 
only that they are trying and are not able to do it; the law that was 
passed prohibits them from doing that. That does not make sense.
  We have all heard from seniors, from families, from people with 
disabilities across the country trying to wade through all of the 
private plans and the complexities and dealing with the doughnut hole, 
and so on. We know that, in fact, one of the reasons that there is that 
gap in coverage is that we are not using the purchasing power of the 
Federal Government through Medicare to get the best price so that our 
dollars and the dollars of the people on Medicare are stretched as far 
as possible to help people get the medicines they need.
  Mr. BENNETT. Will the Senator yield for a question?
  Ms. STABENOW. I am happy to.
  Mr. BENNETT. Is the Senator aware of the fact that there are well 
over 1 million veterans who have moved to Medicare Part D rather than 
the veterans plan because they find that the restricted formulary in 
the veterans plan has made it impossible for them to get the drugs they 
want? And one of the reasons the VA plan is cheaper is because they are 
rationing drugs? Is the Senator aware of the fact that many veterans 
have, in fact, moved to Medicare Part D for that reason?
  Ms. STABENOW. Yes, reclaiming my time, I am aware that, in fact, 
there are veterans who have moved to the Medicare system. One of the 
reasons the House bill that passed did not include a national formulary 
was because of those kinds of concerns. We are not talking about that. 
We are talking about the ability to negotiate to get the best price. I 
would also say, though, from the VA's standpoint, that there are 
millions of veterans who are getting much better prices as a result of 
the fact that they can negotiate the best price for veterans. We are 
working to find that balance to provide a choice so that you can get 
the specific prescription drug that you need but at the same time be 
able to get the best price. I don't know why we wouldn't want to do 
that. It makes absolutely no sense not to do that.
  We are seeing huge differences on prescription drugs that are 
commonly used by our seniors. Let me give an example. Zocor, which is a 
drug many seniors use for keeping their cholesterol levels under 
control, the lowest VA price is about $127 a month. But people under 
Medicare are paying $1,486. We are talking about a difference of over 
1,000 percent. If you account for an aggressive R&D budget, if you 
account for differences, there is a lot of wiggle room when you are 
talking about a 1,000-percent difference in price between someone going 
through the VA and someone going through Medicare. I don't understand 
why we would not say to the Secretary of Health and Human Services: We 
want you to negotiate a better price for Zocor.
  There were 7.5 million veterans enrolled in the VA health system in 
2005. The administration estimated that over 29 million seniors were 
enrolled in private plans last year. So there are four times more 
seniors enrolled in Medicare than there are people under the VA system. 
And I do not understand--to me it defies logic--why we would not give 
them the same negotiating power.
  I would also like to give the Secretary a chance to negotiate a 
better price for Protonix, a drug that is commonly used to treat 
heartburn. The lowest VA price for Protonix for a year is $214.52. 
Seniors paying the lowest private Part D price have to pay $934 more to 
get their heartburn treated. Again, that makes no sense. Older 
Americans are forced to pay 435 percent more for Protonix because the 
Secretary is forbidden from negotiating prices on behalf of our 
seniors. When we look at what is happening, the claim that private 
plans could actually negotiate a better price under Medicare but also 
under Medicaid has not borne truth.
  The Wall Street Journal, the New York Times, and expert testimony 
before the Finance Committee last week all indicated that, in fact, 
drug prices are now higher for these individuals, those who were before 
on Medicaid and now on Medicare. These are our poorest seniors and 
people with disabilities. Our seniors are being charged more than 
veterans for the same drugs and our poorest seniors are not getting the 
price break we had anticipated. It doesn't make sense to me why we 
would be paying more and why prices would have gone up once Medicare 
came into place for prescription drugs, why prices have gone up rather 
than down.

  There are two arguments that I am hearing all the time. One is that 
we can't possibly rigorously negotiate for lower prices for seniors and 
people with disabilities because we will see prices go down so much 
that the companies will not be able to conduct research and development 
on breakthrough drugs. At the same time, we hear also that negotiating 
would not make a difference; it would not lower prices. It is

[[Page S644]]

impossible to argue both of those positions at the same time. If 
negotiating will, in fact, not lower prices, then it certainly can't 
affect R&D expenses. But yet both of those assertions are being made at 
the same time.
  We are all committed. This Congress last year appropriated $29 
billion for research and development through NIH. And I know the 
distinguished Chair has been involved in advocating for those efforts 
as well as for Medicare. The fact that we have put into place $29 
billion of taxpayers' money indicates our commitment to R&D and to work 
with the industry. The research that is done through that effort is 
available free of charge to the industry. They are able to take that 
information. They are able to deduct as a business expense their R&D 
efforts, and they get a 10-percent tax credit for R&D efforts on top of 
that for breakthrough drugs, all of which I support. We then give about 
an 18-year patent to protect a company from a particular drug. They 
have to be able to recoup their costs and not have full competition 
from the private marketplace or from generic drugs. I, also, support 
that.
  All we are asking--all the people of the country are asking, 
particularly our seniors and disabled--is that when one gets through 
with the process they have invested in, they should be able to afford 
to buy the medicine. Medicine that is not affordable is not available, 
and health care today is becoming more and more a question of treatment 
through medicine.
  I am hopeful we will move quickly. I know the chairman of the Finance 
Committee has held a hearing. We are grateful for that. I am hopeful we 
will move forward together on a bill that will mirror what the House of 
Representatives has done in order to say that the Secretary should 
negotiate the best price for medicine for our seniors, for people with 
disabilities, and certainly for the taxpayers who are paying a 
substantial amount for this benefit.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. COLEMAN. I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COLEMAN. Madam President, I would like to respond to my colleague 
from Michigan. I wish to talk a little bit about the minimum wage, but 
I would love to debate drug rationing. And that is what we are going to 
get to. That is what we are talking about. We are talking about 
adopting the VA system. For those seniors out there listening, you have 
a limited list of drugs which are available. And by the way, you get 
them through the VA. You get about 80 or 90 percent through mail order, 
the rest at the VA, where my dad goes. I think he, also, may have an 
addition tied into Part D. I have seniors in Minnesota who like to go 
to the local pharmacy. I am struggling and fighting every day to keep 
rural pharmacies alive. You want to put a stake through the heart of 
rural pharmacies, of small business, talk about doing what the House is 
talking about. We will have that debate another day.
  Americans and Minnesotans like choice. Under Medicare Part D, the 
poorest of the poor are dual eligibles, and it is a program that is 
working. Most of the seniors in my State who have Medicare Part D are 
pretty happy. We have some challenges with the doughnut hole. But going 
to a system of limited choice, limited options and somehow saying that 
that is going to be better than a system where you have millions of 
consumers and, in effect, the bargaining goes on every day, if you 
don't like one plan, you can go to the next, this plan has cost us less 
money. It is giving great choices. Our challenge is to keep our rural 
pharmacies alive. This is not going to make that any better.

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