[Congressional Record Volume 153, Number 10 (Thursday, January 18, 2007)]
[Senate]
[Pages S723-S724]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         DRUG BARGAINING POWER

  Mr. WYDEN. Mr. President, we all understand there has been an awful 
lot of heated rhetoric about this issue of Medicare and negotiating 
drug prices and how much savings will come about for the consumer.
  I and the distinguished senior Senator from Maine have been working 
for well over 3 years, in a bipartisan way, on this issue. I and 
Senator Snowe have been able to come up with an approach for dealing 
with this issue, helping the seniors of this country, helping the 
taxpayers of this country, and lowering the temperature of the debate 
about prescription drugs by showing how Medicare can be a smart shopper 
without setting up some kind of big Government price control regime.
  Throughout this discussion over the last 3 years, Senator Snowe and I 
have repeatedly put into the legislation that we have brought to the 
Senate a strict prohibition on establishing any kind of price control 
regime or any kind of uniform formulary, which is essentially a list of 
drugs that restricts the choices for those involved--seniors or anyone 
else.
  What Senator Snowe and I have tried to do is lower the temperature on 
this issue, to try to zero in, in a bipartisan way, on the areas where 
it is important for the Secretary of Health and Human Services to be in 
a position of trying to have some negotiations to get a break for the 
seniors and for the taxpayers. I will use those words specifically. We 
are talking about what could be a negotiation--not going in with some 
arbitrary price and throwing around figures of $1.20 a pill or 
something like that. We are talking about the opportunity for our 
Government to be a smart shopper, while steering clear of any price 
control regime. By the way, I know this was an important issue for the 
Presiding Officer as he campaigned to come here.
  Senator Snowe and I voted for the Medicare prescription drug program. 
I still have the welts on my back to show for it. But what Senator 
Snowe and I said from the very outset, from the very time of the 
original Senate debate, is we were going to go to work on a bipartisan 
basis to try to fix those areas, such as the one identified by the 
Presiding Officer, the distinguished Senator from Rhode Island. We have 
set out to do just that. And in 2004, the Congressional Budget Office 
sent us a letter saying we were heading in the right direction.
  Senator Snowe and I said from the beginning we have to make sure that 
seniors and taxpayers get a good deal when we have what are called 
single-source drugs, monopoly drugs. These are drugs where there isn't 
any ability to have the kind of leverage and clout we would like to 
have in the marketplace.
  In 2004, the Congressional Budget Office sent me a letter that there 
could be savings if negotiations were permitted on single-source drugs 
for which there is no therapeutic equivalent. It is common sense, it 
seems to me, when the Congressional Budget Office says there could be 
savings in one kind of area, we would want to add that. The 
distinguished chairman of the Committee on Finance, Senator Baucus, 
puts it pretty well. Senator Baucus says: Why don't you add that to 
your cost containment tool box? Senator Baucus has said what we need is 
a variety of ways to hold down the cost--he calls it, in my view 
correctly, a kind of tool-box approach to making sure seniors and 
taxpayers get a good deal. What Senator Snowe and I have said is let's 
make sure that tool box that Senator Baucus has been talking about

[[Page S724]]

zero in on this question of single-source drugs, where we do need some 
bargaining power.
  There are some who have said the only possible way to have 
negotiations is if you set up some kind of one-size-fits-all national 
formulary. They say: The VA has one. Gosh, you all in the Senate would 
not want to limit the drugs available to our country's seniors.
  Let me make it clear what Senator Snowe and I are doing rejects that 
approach. We are not talking about a nationwide formulary or some kind 
of list of drugs that restricts seniors' choices.
  By the way, when the former Secretary of Health and Human Services, 
Tommy Thompson, felt it was important to do the kind of thing Senator 
Snowe and I are talking about on the drug Cipro, Secretary Thompson did 
not go out and set up a nationwide formulary. He didn't say: We are 
going to say the price of the pill is $1.27. He did not set up some 
kind of arbitrary price-control regime. Secretary Thompson, in his last 
meeting with the press when he was leaving the Department, said he 
wished he had the power to bargain under Medicare.
  Secretary Thompson did exactly the kind of thing that I and Senator 
Snowe have been talking about. He said we have to make sure that the 
consumer and the taxpayers get a good deal for Cipro. Secretary 
Thompson did not set up a nationwide formulary. Secretary Thompson did 
not set up some price-control regime. Secretary Thompson did not say: 
It is going to be $1.27 per pill. He said: Let's negotiate, let's talk, 
let's go back and forth as everyone does in the marketplace in Rhode 
Island, Oregon and everywhere else across the country. Let's ask: What 
are we going to do to make sure that everyone gets a fair shake?
  That situation, of course, was an emergency, because we had anthrax. 
But as the Senator from Rhode Island has pointed out a number of times 
over the last few months, for a lot of seniors, trying to afford 
prescription medicine is kind of like having a new emergency every day.
  Secretary Thompson said: Yes, we have a big emergency on this anthrax 
situation. I think the Senator from Rhode Island knows exactly what I 
see when I am home in Coos Bay, John Day, Pendleton, or Gresham, 
Oregon, and everywhere else. For a lot of seniors in this country, 
every day is an emergency with respect to being able to afford their 
medicine. Those seniors ought to know that their Government, in the 
case of the single-source drug, for example, where there is monopoly 
power, can bargain in those kind of instances without price controls, 
without a nationwide formulary. That is what Senator Snowe and I and 
others, on a bipartisan basis, wish to stand up for--to help those 
seniors and those taxpayers.

  Now, some have argued that as seniors get a better deal for Medicare, 
that means higher prices for everyone else. They, also, argue that 
negotiations would not do anything. I don't know how one can make both 
arguments at the same time and make sense. Those two do not connect.
  What Senator Snowe and I wish to do is have a Medicare program that 
is a smart, savvy shopper. By being a better shopper, seniors and 
taxpayers are going to save. We know that no one goes to Costco and 
buys toilet paper one roll at a time. They shop smart. We ought to do 
that with Medicare.
  I was pleased with last week's Committee on Finance hearing. Chairman 
Baucus and others said it is valuable to have additional information to 
know whether markets for drugs are achieving the best price possible. I 
and Senator Snowe have been interested in that approach as well. We 
know there are a variety of pharmacies out there that can offer cheaper 
medicines to seniors without limiting the drugs available, and we find 
it hard to believe that Medicare cannot do exactly the same thing. Let 
us give Medicare the opportunity to do exactly the same thing that 
people do in New Hampshire, Texas, and Rhode Island; that is, to shop 
smart, look for a bargain, and don't set up nationwide price controls 
and don't set up a nationwide formulary that restricts the kind of 
drugs our seniors can get.
  If we work in a bipartisan way, which is what Senator Snowe and I 
have been trying to do on this issue for 3\1/2\ years, we can draw a 
line that promotes smart shopping in Medicare without going over the 
line to price controls and restrictive formularies. Let us try to lower 
the temperature on this particular debate by looking at ways to shop 
smart without price controls.
  In 2004, the Congressional Budget Office said it would make a 
difference in at least one key area I have been talking about today. I 
believe it would make a difference in other key areas. I am looking 
forward, as a member of the Senate Committee on Finance, to working 
under the leadership of Chairman Baucus, on a bipartisan basis, to get 
this issue resolved because, as the Presiding Officer of the Senate has 
noted over these many months, this is not an abstract issue for the 
people most involved. Those are seniors walking on an economic 
tightrope. We don't know what will happen to medical costs this year, 
but we can make sure we use every possible opportunity without price 
controls to make the Medicare Program a smart shopper.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. I ask unanimous consent to proceed as in morning business 
for 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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