[Congressional Record Volume 156, Number 163 (Friday, December 10, 2010)]
[Senate]
[Pages S8787-S8788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself and Ms. Snowe):
  S. 4024. A bill to reduce the costs of prescription drugs for 
Medicare beneficiaries and to guarantee access to comprehensive 
prescription drug coverage under part D of the Medicare program, and 
for other purposes; to the Committee on Finance.
  Mr. WYDEN. Mr. President, today, I am pleased to reintroduce the 
Medicare Enhancements for Needed Drugs Act, the MEND Act, with my 
colleague, Senator Olympia Snowe. One of the most important promises of 
the original Medicare Part D debate, and from the more recent health 
reform debate, is to drive cost containment in the field of 
prescription drugs. Allowing Medicare to negotiate for drug prices 
would be a groundbreaking cost containment measure for a senior who 
might otherwise be bankrupted by their prescription drug costs. The 
legislation introduced today clearly prohibits price setting or the 
creation of a uniform formulary. It simply allows the Medicare program 
to be a smart shopper by allowing Medicare to go into the market and 
use its clout just like any other big purchaser.
  Certainly, there is a significant group of special interests in this 
town that do not want the Federal Government to be a smart shopper. The 
number of lobbyists that have worked against this legislation over the 
years has been just staggering. For example, the Center for Responsive 
Politics estimated that last year the pharmaceutical industry spent 
over $250 million for lobbying to squash initiatives such as this. And 
make no mistake about what the special interests who oppose this 
legislation want to do. They would rather soak senior citizens and the 
taxpayers and add to the budget deficit than to have to negotiate with 
the Federal Government.
  According to CMS actuaries, the Medicare Part D drug benefit is 
already funded with over $50 billion a year in taxpayer dollars and 
will cost the country substantially more in the future. To be good 
stewards of taxpayer dollars, to be able to strengthen the program and 
to help seniors truly save, Congress must look toward using every 
logical tool to lower costs. The Congressional Budget Office has 
indicated that the type of targeted approach to negotiating drug 
pricing in the MEND Act could potentially generate cost savings for the 
Medicare program and for beneficiaries. It would be irresponsible for 
the Congress not to try and potentially achieve savings for a program 
that so many Americans rely on.
  The legislation that Senator Snowe and I put forward today is a 
commonsense proposal. Having the Secretary negotiate for more 
competitive drug pricing is an idea that has broad public support. An 
AARP poll reported that 87 percent of United States adult residents 
support government negotiation of prescription drug prices for the 
Medicare benefit. Young, old, rich, poor, Democrat, Republican--our 
citizens strongly support this approach and probably wonder why it has 
taken so long to implement it.
  Under the MEND Act, the Secretary could negotiate in any 
circumstance, but must negotiate in several instances: for single 
source drugs for which there is no therapeutic equivalent; drugs for 
which taxpayer funding was substantial in its research and development; 
and for any fallback prescription plan that Medicare must provide. In 
addition, this legislation requires the Secretary to provide a fallback 
plan if there is not comprehensive coverage, including coverage for the 
so-called ``doughnut hole'', available in a region.
  I have always believed that negotiating is not a one-size-fits-all 
proposition. That is why my good friend, Senator Snowe, and I have 
repeatedly proposed language that includes no uniform formulary. This 
legislation emphasizes the concept of ``bargaining power''--not price 
controls, not rules set in Washington, DC, not a one-size-fits-all 
approach, nothing that would discourage innovation among pharmaceutical 
companies, but simply ``bargaining power.''
  All Americans are affected by prescription drug costs. Particularly 
hard hit are older people, particularly low-income older people, and 
people with large prescription drug bills. AARP publishes an annual Rx 
Watchdog report. They note that for the nearly 200 brand-name 
medications most commonly used by older people, the costs of those 
medicines had gone up by 9.7 percent over a recent 12-month period, 
even though the general inflation rate was below 1 percent. This 
situation is unreasonable and unsustainable, and it is hurting our most 
vulnerable citizens. As noted by AARP, seniors are affected more than 
any other segment of the U.S. population by prescription drug cost. 
Every dollar we can save for a senior citizen is also a dollar saved 
for the taxpayers, and when you are talking about nearly 30 million 
seniors enrolled in Part D coverage, that starts to add up to real 
money for the Medicare program.
  If we can save even a little bit we owe it to seniors to do just 
that. There are seniors who have to pay thousands of dollars for a 
cancer drug when there are no other options for treatment. 
Interestingly, some of these life-saving drugs have been developed with 
our tax dollars, through research sponsored by Federal agencies such as 
the NIH. Whenever I am in Oregon at a town hall meeting, I am always 
asked, ``How many times do we have to pay for drugs? Our tax dollars go 
toward research and development, and then taxpayers have to pay again 
when the drug is patented and put on the open market.'' In cases where 
substantial Federal research dollars went into creating the drug, I 
believe the Secretary ought to step in and see what kind of a better 
deal can be garnered on behalf of seniors.
  I would like to acknowledge Senator Snowe's efforts on behalf of our 
Medicare beneficiaries and taxpayers. She and I have worked on this 
particular issue for a number of years. This bipartisan proposal is an 
effort to follow up on the promise she and I made to our citizens back 
home to improve the Part D drug benefit. I thank Senator Snowe, who is 
always trying to find common,

[[Page S8788]]

bipartisan ground, which is, of course, the only way you get important 
work done in the Senate. This legislation certainly qualifies as 
important work. I urge my colleagues to join with us in supporting this 
bipartisan legislation to contain prescription drug costs for our 
Nation's seniors.
  Ms. SNOWE. Mr. President, I join with my colleague and friend. 
Senator Ron Wyden, to introduce legislation which we have sponsored 
since 2004 to ensure the sound fiscal management of the Medicare 
prescription drug benefit.
  Unquestionably, this new benefit marks a milestone for Medicare. 
Today millions of American seniors are at last receiving assistance 
with the high cost of prescription drugs. For so many, that will make a 
difference between choosing whether to take needed medications and 
providing the other necessities of life. We have indeed come a very 
long way. We look forward to realizing the many benefits of this 
coverage as we see the results of more affordable access to 
prescription drugs--better health for our seniors and substantial 
health care savings.
  At the same time, there is no doubt that this benefit can be 
improved. We have heard estimates that the average senior is saving an 
average of $1,000 per year, but we should ask how that saving is being 
achieved. The discovery by many seniors--when they reached the doughnot 
hole--that their cost of medications was the same or even higher than 
what they paid prior to enrolling in Part D--that should be a red flag 
that we may not be seeing the purchasing power of seniors harnessed for 
the savings they deserve.
  Our system is working well in terms of subsidy, but certainly needs 
to improve in terms of negotiating substantial discounts. As Senator 
Wyden and I learned from GAO reports we have received, the prices of 
drugs used by seniors have inexorably increased since 2000 at two to 
three times the inflation rate. According to the New York Times, last 
year's brand drug price increase average of over 9 percent represents 
the highest annual rate of inflation for drug prices since 1992.
  So the costs of this program will remain a concern. Most of us 
envisioned that not only would the taxpayer contribute to helping 
seniors with drug expenses, but we also would realize substantial 
savings from lower prices on prescription drugs.
  That is why Senator Wyden and I proposed to achieve some balance in 
the public-private partnership which is Part D today, and it is why 
today we are again introducing the Medicare Enhancements for Needed 
Drugs Act--the MEND Act. In this drug benefit the HHS Secretary should 
have a proper role in negotiation--negotiation, not price setting.
  It is clear that what the Congress intended to do was to create a 
true public-private partnership, utilizing competitive forces to bring 
more choices to seniors--in drugs, benefit plan designs, pharmacies, 
and more. So seniors can vote with their pocketbooks, and we can see 
their choices in the market influence the kind of benefit they receive. 
That is not the same as a system in which the government sets prices, 
and that is why our legislation specifically bans such a practice. 
Under our legislation, the Federal Government cannot set either prices 
or formularies--that is absolutely clear.
  What I believe most of us desire to do is give the current system the 
best tools to achieve success. That means that the Secretary must have 
an oversight role. Our legislation rescinds the noninterference clause 
and directs the Secretary to negotiate for any necessary fallback plan, 
and in addition, to respond to requests for help from plans which 
cannot obtain reasonable negotiation.
  We have also added two areas in which the Secretary must negotiate. 
First, as the CBO has stated that negotiation of single-source drugs 
could yield savings, our legislation directs the Secretary to engage in 
negotiation regarding those unique products. We also know that some 
drugs exist because the taxpayer provides substantial support to see 
them developed. The public deserves a fair price on those products it 
made possible, so the Secretary should weigh-in in those cases.
  Finally, our bill protects beneficiaries by assuring that seniors 
will have access to a comprehensive coverage option--at least one plan 
in each region must provide the option to avoid the coverage gap, 
dreaded doughnut hole. Today, 47 percent of plans offer no coverage, 30 
percent only cover generics, and 23 percent cover generics and some 
brand name drugs.
  The bottom line is that our bill protects both beneficiaries and 
taxpayers within the public-private partnership on which this benefit 
rests. I call on my colleagues to join us in this effort.

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