[Congressional Record Volume 153, Number 13 (Tuesday, January 23, 2007)]
[Senate]
[Pages S904-S905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 VA and Medicare Drug Price Negotiation

  Mr. AKAKA. Mr. President, much has been said recently about the way 
in which VA purchases drugs and the manner in which medications are 
provided to beneficiaries. This discussion has been a part of the 
ongoing debate to allow Medicare to negotiate for drugs on behalf of 
its beneficiaries.
  Concerns have been raised about veterans' access to drugs, the 
quality of the benefit, and VA's formulary and pricing. Veterans 
medication coverage has been misunderstood. I would like to take this 
opportunity to set the record straight about the process by which VA 
achieves drug cost savings and the level of care afforded to veterans.
  VA is different than Medicare for a variety of reasons, there is no 
doubt, but I believe some lessons can be applied to address Medicare 
drug prices.
  While there is no question that VA's formulary is an important 
component of VA pharmacy management, decisions about which drugs are on 
the formulary are not made by bureaucrats nor are they made by those 
solely concerned about the bottom line.
  VA employs a scientific review process to select drugs to be 
available to beneficiaries and to ensure quality care. Physicians and 
clinical pharmacists from the VA's regional offices manage the 
formulary.
  While some concern has been expressed that the VA formulary covers 
only 30 percent of the 4,300 drugs available on Medicare's market-
priced formulary, this is not the case. Rather, it is my understanding 
that VA actually offers 11 percent more drugs than are available under 
Part D of Medicare.
  VA offers 4,778 drugs by way of a ``core'' national formulary which 
requires that they must be made available at all VA medical care 
facilities. If a drug is needed which is not on the formulary, VA has a 
quick process to ensure that the drug will be prescribed. This off-
formulary process is so robust, in fact, that last year, VA dispensed 
prescriptions for an additional 1,416 drugs. So, to put a finer point 
on this, when a non-formulary medication is clinically needed--it is 
provided.
  To those who argue that VA's formulary is ``among the most 
restrictive in the marketplace,'' I would only say that the Institute 
of Medicine took a good long look at VA and found that in many respects 
it is actually less restrictive than other public or private 
formularies.
  The chairman of the IOM committee said that if VA did not have a 
formulary process like it has, they would have indeed urged that one be 
created just like it.
  Some have suggested that veterans receive substandard care because of 
the VA drug benefit The literature says otherwise. Veterans get better 
pharmaceutical care than private or public hospitals, according to a 
study last year published in the Archives of Internal Medicine.
  VA's mail order pharmacy has been criticized, as well. VA employs 
nearly 10,000 pharmacists and technicians and is regarded by many 
pharmacy organizations as excellent. VA also operates 230 outpatient 
pharmacies. VA also trains more doctors of pharmacy than any other 
single organization in the U.S. And most significantly, while the error 
rate for prescriptions in the U.S. is between 3 and 8 percent, the 
error rate in VA is less than one one-hundredth of one percent.
  In VA, new drugs are reviewed on their merits and are made available 
quickly if they provide distinct benefits. Safety and how well a drug 
works are the most important considerations in the review process, 
followed by cost.
  I could go on. We know that VA gets the best prices, but I think the 
essential question is: Do veterans get the necessary drugs to promote 
the best health care? The answer--based on peer-reviewed studies--is a 
resounding yes. The quality of medical care in VA is significantly 
higher for overall quality in chronic care and preventative care.
  And if some believe that veterans aren't happy with their drug access 
and pricing, it is news to me, and to the administration. Just last 
week, VA announced results of a survey done by an independent reviewer 
of customer satisfaction. For the seventh straight year, the Department 
of Veterans Affairs has received significantly higher ratings than the 
private health care industry. VA's marks keep continuing to rise.
  When veterans' groups testify before Congress about their needs and 
desires, the only thing they say about their drug coverage is that they 
want to keep it the way it is.
  Peer-reviewed studies, veterans service organizations, polls, and 
consumer reports consistently testify to the superiority of VA health 
care over private sector care. The VA formulary has been repeatedly 
reviewed and approved by Congress, GAO and the Institute of Medicine. 
Consumer choice provides clear insight into the success of the VA 
pharmacy management system.
  We can learn a number of lessons from the VA as we consider Medicare 
price negotiations. I support drug price negotiation by Medicare. As 
chairman of the Veterans Affairs Committee, I will closely monitor the 
evolution of this issue to ensure VA retains access to affordable 
drugs. The gains that can be made in Medicare--and the improvement of 
quality--are just too great to do nothing.
  I ask unanimous consent that the VA's summary of the study to which I 
previously referred be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page S905]]

 Journal Article Praises VA Health Care--Secretary Nicholson: Further 
                     Proof of VA's Top Quality Care

       Washington.--``One of the most striking examples of 
     American health care success''--that is one medical journal's 
     recent assessment of the health care system operated by the 
     Department of Veterans Affairs (VA).
       The most recent tribute to VA's health care system came in 
     an article in the medical journal Neurology.
       ``The quality of VA's health care system is recognized by 
     medical professionals and, most importantly, by veterans,'' 
     said Secretary of Veterans Affairs Jim Nicholson. 
     ``Repeatedly, the medical community holds up VA's health care 
     system as a model.''
       ``The VA has achieved remarkable improvements in patient 
     care and health outcomes, and is a cost-effective and 
     efficient organization,'' according to the journal. For 
     example, the article cited VA's comprehensive coverage and 
     said it is especially suited to manage chronic disease.
       Dr. Michael J. Kussman, VA's Acting Under Secretary for 
     Health, said the article underscores the Department's 
     commitment to high quality patient care.
       ``This shows that VA's health system is recognized 
     internationally as the benchmark for health care services,'' 
     Dr. Kussman said. ``It further demonstrates that our 
     commitment to high quality care is benefiting the men and 
     women who have earned the best possible care through service 
     to our country.''
       The Neurology article is the second recent study citing the 
     quality of VA health care. In December, a comprehensive study 
     by Harvard Medical School said federal and military 
     hospitals, such as those run by the VA, provide the best care 
     available anywhere for some of the most common life-
     threatening illnesses.
       In 2006, VA received the prestigious ``Innovations in 
     American Government'' Award from Harvard's Kennedy School of 
     Government for its advanced electronic health records and 
     performance measurement system.

  Mr. AKAKA. I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I thank the Senator, my friend from 
Hawaii, for his excellent presentation. I pay tribute to him for his 
extraordinary work on behalf of the veterans of this country. He has 
been the real leader in the Senate on this issue, particularly for 
those who have suffered the wounds of war. He has been a tireless 
advocate to make sure we get the very best focus and attention to them. 
We have listened to him frequently. I hope the Senate will pay close 
attention to his words and his findings and his urging for this body.
  I thank him for his comments, as always.

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