[Congressional Record Volume 160, Number 154 (Monday, December 15, 2014)]
[Senate]
[Pages S6864-S6865]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GENERIC DRUG REPORT AND STUDY REQUEST
Mr. NELSON. Madam President, today I wish to call attention to a
report released by the Senate Special Committee on Aging, ``Medicare
Part D Prescription Drug Benefit: Increasing Use and Access of
Affordable Prescription Drugs.'' I have long been an advocate in the
fight for affordable prescription drugs for our seniors--in fact, when
this body was considering the legislation that created the Medicare
Part D benefit, I voiced concerns that we did not go far enough to
ensure that every senior had access to the lifesaving and life-
sustaining treatments they need.
During the debate in the Senate on the Affordable Care Act, I fought
to eliminate the so-called Medicare Part D doughnut hole because no
senior should have their drug coverage disappear when they need it
most. I believe that closing the prescription drug doughnut hole was
one of the best things we did in the Affordable Care Act, and in my
State alone seniors have saved more than $756 million on their drugs
since the law was passed.
Over the past 2 years, the Aging Committee has held hearings, drafted
legislation, solicited multiple reports from the Government
Accountability Office, GAO, and the Department of Health and Human
Services Office of the Inspector General, OIG, on selected topics, and
met with industry and beneficiary stakeholders. I requested a study by
the GAO on the Part D plan finder tool's accuracy of information on
plans and drug pricing.
I chaired a hearing to commemorate the 10th anniversary of the
creation of Medicare Part D. During that hearing, witnesses raised
issues of specialty drug costs, coverage denial, and customer service
issues. As a result, Senator Collins and I introduced the Part D
Beneficiary Appeals Fairness Act, S. 1365, to give beneficiaries the
right to appeal for a lower copayment for drugs on the specialty tier,
the tier on which the most expensive drugs are. I have worked hard with
my colleagues to rectify issues with the Medicare Part D appeals
process when I learned that seniors were still having difficulty when
coverage for needed medications was denied. I also requested a thorough
review by the OIG into beneficiaries' access to generic drugs in
Medicare Part D plans, the results of which are in the report submitted
today, as well as a continued review of the differences in prices for
drugs in the Medicaid Program as compared with the Medicare Program.
I will continue to improve the Medicare Part D Program, and that is
why my colleagues and I issued this committee report to inform the full
Senate on innovative ways to use the tools within the Part D program to
better control drug costs for seniors and taxpayers.
This report is the culmination of 2 years of work by the Senate
Special Committee on Aging to assess the status of the Part D program
and recommend improvements.
One undeniable factor that keeps costs down in the Part D program is
the use of generic drugs. Competition in the generic drug market
translates into real savings for both taxpayers and beneficiaries. The
Congressional Budget Office, CBO, estimated in 2010 that the use of
generic drugs in the Part D program saved beneficiaries and taxpayers
approximately $33 billion; approximately 72 percent--$24 billion--of
those savings accrued to the Medicare program and 28 percent--$9
billion--went to beneficiaries. CBO estimates that such savings are
shared by beneficiaries and the Part D program through a combination of
lower copayments and lower premiums than would have been charged
otherwise.
While the proportion of generic drug use has increased over time,
certain high-cost beneficiary groups continue to miss savings. The
committee's report finds four areas for improvement that should be
addressed in order to continue to improve on value-based prescription
drug use. These include:
Incentivizing and supporting plan sponsors to not only include
generic drugs on plan formularies but also to proactively promote the
maximum use of generic alternatives where appropriate. Currently, most
plan sponsors offer a full array of generic alternatives, but they are
not required to do so, leaving a small number of plan formularies that
do not maximize generic offerings. In addition, there are no mechanisms
that reward or incentivize plan sponsors that have undertaken
successful strategies to further increase generics use. Encouraging
value in Part D plans as much as possible will be increasingly
important in coming years.
Finding ways to increase the adoption of generic drugs among
beneficiaries that receive low income subsidy, LIS, benefits.
Generally, insurance companies have been successful at encouraging
enrollees to use generic alternatives when available in part because
there are large differences in copays between brand and generic drugs.
However, in the LIS population, these cost differences do not exist;
their copays are set by statute. Innovative methods to improve use of
generic drugs in this population, while still ensuring full access for
this vulnerable population, must be explored.
Improving education among beneficiaries and health professionals.
There continues to be a need to educate beneficiaries and health
professionals on the efficacy of generic medications and incentivizing
them to substitute brand-name drugs for generic drugs, when
appropriate.
Maximizing program integrity efforts at pharmacies. In some
situations,
[[Page S6865]]
questionable pharmacy billing practices could thwart efforts that have
been made to incentivize generics. HHS OIG, GAO, and others have
identified important program controls in the Part D program that could
be improved.
While the report deals only with those levers in the Part D program
that can be adjusted to incentivize the less-costly drug option where
appropriate, it is undeniable that recent reports indicate certain
situations where the price of a selected generic drug dramatically
increases. This trend--and the factors that contribute to this
disturbing trend--must be better understood. Generics have been
critical to overall fiscal sustainability of the health care system,
and we must understand and address volatility that results in
inexplicable price spikes for patients and taxpayers. I believe this is
a hugely complex and recent phenomenon but one that must be studied
further. That is why today, in addition to releasing this important and
timely report, I intend to request an investigation by the GAO into
those factors that underlie the recent price increases of certain
generic drugs.
It is my hope that these actions, taken together, are efforts that
both sides can agree to and will inform us on the best way to move
forward to achieve the maximum drug savings possible and provide
better, more affordable care for our seniors in coming years.
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