[Congressional Record Volume 165, Number 86 (Wednesday, May 22, 2019)]
[Senate]
[Pages S3022-S3024]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                        Prescription Drug Costs

  Mr. GRASSLEY. Mr. President, I am here to discuss with my colleagues 
issues dealing with the work of the Senate Finance Committee and 
possible legislation that hopefully will come up this summer to keep 
healthcare costs down, particularly prescription drugs.
  In the process of doing that, I want to set the record straight on an 
issue that affects every American who is eligible for Medicare. More 
specifically, I am here to talk about efforts to reduce the rising cost 
of prescription medicine.
  Prescription drugs save lives. Millions of Americans like myself wake 
up every morning and take their daily medication, but there is 
something that has become a very tough pill to swallow for an 
increasing number of Americans, and that is paying for the rising cost 
of prescription drugs.
  I applaud President Trump for turning up the volume on this issue 
last summer. That is when the President announced his administration's 
blueprint to lower drug costs for all Americans. He found out--and we 
all found out--that is a goal that has widespread support that includes 
Republicans and Democrats, as well as urban and rural Americans.
  Of course, the President can only do so much--whatever law passed by 
Congress allows the President to do and that doesn't solve all the 
issues. So even though I applaud the President, that doesn't mean I 
exclude in any way the responsibility of Congress to take action.
  There are many good ideas to build upon that share broad, bipartisan, 
bicameral support. There is one policy, however, that some Members are 
talking about that I don't agree with, and that is repealing what is 
the noninterference clause in Medicare Part D. I would like to explain 
why Congress kept the government out of the business of negotiating 
drug prices in the Medicare program. Some 16 years ago, when I was 
formerly chairman of the Finance Committee, I was a principal architect 
of the Medicare Part D program.
  For the first time ever, Congress, in 2003, added an outpatient 
prescription drug benefit to the Medicare program. Maybe I ought to 
explain for my colleagues why it took between 1965 and 2003 to include 
drug benefits in the Medicare program. Remember, in 1965, prescription 
drugs or drugs generally didn't play a very big role in the delivery of 
medicine like they do today, but over time, they have become more 
important.
  That is why great support at the grassroots, both bipartisan and 
bicameral, evolved into what we call the Medicare Part D program, 
adopted in that year, 2003. So we came to the conclusion that adding 
the prescription drug benefits for seniors was the right thing to do, 
but it needed to be done in the right way--right for seniors and right 
for the American taxpayers. By that, I mean allowing the forces of free 
enterprise and competition to drive costs down and drive value up.
  For the first time ever, Medicare recipients in every State had the 
voluntary decision to choose a prescription drug plan that fit their 
pocketbooks and their healthcare needs.
  The Part D program has worked. Beneficiary enrollment and 
satisfaction are robust. The Part D marketplace offers consumers better 
choice, better coverage, and better value; yet here we are again. It 
has been 13 years since Part D was implemented, and once again, I am 
hearing the same calls to put the government back into the driver's 
seat of making decisions on what you can take in the way of pills or 
what your doctor might be able to prescribe to you based upon what a 
formulary might be. We want the private sector to decide the formulary, 
not the

[[Page S3023]]

government. So these people happen to be the same backseat drivers who 
think that centralized government knows everything and knows best.
  As the Senator who, once again, chairs the committee with 
jurisdiction over Medicare policy, I am not going to let Congress 
unravel what is right about Medicare Part D. Remember, I was a 
Republican leading the charge to add a new benefit to a government 
program. A lot of people think that is very uncharacteristic of a 
Republican, but I told you why I did that: because medicine was 
becoming an increasing part of the delivery of quality healthcare. So 
you heard me correctly, I was a Republican chairman working with my 
Democratic ranking member, Max Baucus, to accomplish Part D. We 
negotiated an agreement to add prescription drug coverage for seniors.

  For me and other Republicans--namely President George W. Bush--there 
were a few key caveats. First, it must be voluntary. Second, 
beneficiaries would share the cost with the taxpayer because having 
skin in the game keeps check on spending and on utilization. Third, we 
must allow competition--not government mandates--to drive innovation, 
curb costs, expand coverage, and improve outcomes. It wouldn't work if 
the Federal Government interfered with delivery of medicine and dictate 
which drugs would and would not be covered. That is why we wrote a 
noninterference clause in the law.
  My friend, Senator Wyden, the current Democratic ranking member of 
the Finance Committee, voted for final passage in 2003. By the way, we 
are having very good bipartisan cooperation in our Finance Committee 
on, hopefully, legislation to be debated in our committee in June in 
regard to lowering drug costs.
  The noninterference provision expressly prohibits Medicare from, one, 
negotiating drug prices; two, setting drug prices; and, three, 
establishing a one-size-fits-all list of covered drugs. That list is 
called a formulary. I remember that many of my friends on the other 
side of the aisle voted for this policy; yet some are now pushing for 
repeal of that provision.
  Here is a list of Democrat leaders who supported and voted to ban 
Medicare from negotiating drug prices: when he was in the Senate, 
Senator Biden; Senator Kennedy; Senator Baucus; Senator Reid, the 
former majority leader; Senator Schumer now in the Senate; Leahy; 
Durbin; Stabenow; Cantwell. On the other side of the Capitol, the list 
included Speaker Pelosi and chairman of the Ways and Means Committee, 
Chairman Neal.
  There is something else that I have learned in all my years talking 
healthcare policy with Iowans at my annual 99 county meetings where I 
enjoy a Q and A with whatever agenda my constituents call upon me to 
discuss with them.
  At the end of the day, Iowans don't want the government prescribing 
lifesaving medications. Iowans want to make those decisions with a 
physician who is treating them. Last year, 43 million out of 60 million 
Medicare recipients were enrolled in the Medicare Part D program. That 
is the vast majority of Medicare beneficiaries nationwide that don't 
have coverage through a past employer or similar coverage from another 
source.
  Plan sponsors design different plan choices and compete for 
beneficiaries based on what those plans cover and what they cost. 
Beneficiaries can pick from many options, with over 3,000 plans offered 
across 34 geographic areas. In other words, you don't have one plan 
dictated by the government. Most beneficiaries were covered by a 
prescription drug plan, and a growing number were covered by a Medicare 
advantage prescription drug plan.
  The Part D base premium amount is low and has remained stable over 
many years. Looking back to our negotiations in 2003 to get this bill 
to the President of the United States, we wondered how high these 
premiums would go, and we were fearful they would just go out of the 
atmosphere and that they would not be stable like they have been over a 
long period of time. So the noninterference clause ensures that plan 
sponsors create plan options that respond to what the beneficiaries--
not the government--says it should be.
  The nonpartisan congressional scorekeeper, the Congressional Budget 
Office, has repeatedly stated that repealing this noninterference 
clause would not save money, unless there was a restricted formulary. 
As I stated, we wrote this bill in 2003 so the government wouldn't get 
between you and your doctor on what you ought to have in the way of 
prescription drugs. So in regard to the cost, I asked CBO to update, 
and they did. CBO sent me a letter stating the same thing.
  Mr. President, I ask unanimous consent to have printed in the Record 
the May 10, 2019, letter from the CBO.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                         Committee on Finance,

                                     Washington, DC, May 10, 2019.
     Keith Hall, Ph.D.,
     Director, Congressional Budget Office,
     U.S. Congress, Washington, DC.
       Dear Dr. Hall: As an author of the Medicare Part D program 
     enacted in the Medicare Modernization Act of 2003, I support 
     the statutory provision that prohibits the Secretary of the 
     Department of Health and Human Services (HHS) from 
     interfering with negotiations between drug manufacturers, 
     pharmacies, and plan sponsors. The Part D program structure 
     that uses private entities to negotiate and compete to enroll 
     beneficiaries has worked. Program spending has been lower 
     than estimated at the time the program was enacted. 
     Beneficiary enrollment has been robust, and enrollee premiums 
     have remained low and stable. Enrollees are largely satisfied 
     with their plan. The statutory ``non-interference'' clause is 
     a key reason for the program's success.
       While the Part D program has provided beneficiaries with a 
     crucial lifeline through access to prescription medications, 
     improvements are needed to lower high out-of-pocket costs and 
     to realize better value for the taxpayer-supported Medicare 
     program. Some have suggested that allowing the Secretary to 
     negotiate for the price of drugs will achieve those aims. I 
     believe that talk of eliminating the non-interference clause 
     is misguided and counterproductive. I ask that you answer the 
     questions below as to inform the policy debate on this 
     matter.
       If the Secretary was given authority to negotiate by 
     Congress and used that authority, would it be possible to 
     obtain savings in Medicare?
       Could negotiating by the Secretary over drug prices obtain 
     savings for the Medicare program if those negotiations were 
     limited to selective instances?
       Thank you for your attention to the Part D program that has 
     benefited millions of Medicare beneficiaries. Please contact 
     my staff if you have questions.
           Sincerely,
                                              Charles E. Grassley,
     Chairman.
                                  ____

                                      Congressional Budget Office,


                                                U.S. Congress,

                                     Washington, DC, May 17, 2019.
     Re: Negotiation Over Drug Prices in Medicare.

     Hon. Chuck Grassley,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: You asked for updated answers to two 
     questions that CBO addressed in a letter to Senator Wyden in 
     2007. Those questions relate to the Medicare Part D 
     prescription drug benefit and options for allowing the 
     Secretary of Health and Human Services to negotiate over the 
     prices paid for drugs under that benefit. Under current law, 
     the Secretary is prohibited both from interfering in the 
     negotiations between drug manufacturers and the prescription 
     drug plans (PDPs) that deliver the Medicare benefit and from 
     requiring a particular formulary or instituting a price 
     structure for the reimbursement of covered drugs.
       The questions and the key conclusions from CBO's response 
     in 2007 are below. CBO continues to stand by those 
     conclusions.
       If the Secretary was given authority to negotiate by 
     Congress and used that authority, would it be possible to 
     obtain savings in Medicare?
       The key factor in determining whether negotiations would 
     lead to price reductions is the leverage that the Secretary 
     would have to secure larger price concessions from drug 
     manufacturers than competing PDPs currently obtain. 
     Negotiation is likely to be effective only if it is 
     accompanied by some source of pressure on drug manufacturers 
     to secure price concessions. For example, authority to 
     establish a formulary could be a source of pressure. In the 
     absence of such pressure, the Secretary's ability to issue 
     credible threats or take other actions in an effort to obtain 
     significant discounts would be limited. Thus, CBO concluded 
     that providing broad negotiating authority by itself would 
     likely have a negligible effect on federal spending.
       Could negotiating by the Secretary over drug prices obtain 
     savings for the Medicare program if those negotiations were 
     limited to selective instances?
       The authority to engage in negotiations limited to a few 
     selected drugs or types of drugs under exceptional 
     circumstances could potentially generate cost savings. For 
     example, negotiations could be focused on drugs with no close 
     substitutes or those with relatively high prices under 
     Medicare that are needed to address a public health 
     emergency.

[[Page S3024]]

       In such cases, CBO expects that the effect of the 
     Secretary's actions--if he or she took advantage of the new 
     authority--would primarily reflect the use of the ``bully 
     pulpit'' to pressure drug manufacturers into reducing prices. 
     Thus, CBO concluded that the overall impact on federal 
     spending from negotiations targeted at selected drugs would 
     be modest. Beyond that general conclusion, the precise effect 
     of any specific proposal would depend importantly on its 
     details.
       If you would like further information on this subject, we 
     would be happy to provide it. The CBO staff contact is Tom 
     Bradley.
           Sincerely,
                                                       Keith Hall,
                                                         Director.

  Mr. GRASSLEY. Mr. President, repealing the noninterference clause 
means a restricted formulary, which places limits on the drugs that are 
available to seniors, maybe excluding some drugs that your doctor wants 
to prescribe for you. I don't believe that Medicare beneficiaries want 
the government interfering in that process.

  Then, as policymakers, we must keep in mind that we are making 
decisions that affect healthcare choices for the people whom we are 
elected to represent.
  Let's all remember to first do no harm. Repealing the noninterference 
clause may sound good, but not even a spoonful of sugar will help that 
bad dose of policy medicine go down.
  I come to the floor today to hope that I can put this issue to rest 
and, as we try to work in a bicameral and bipartisan way to reduce drug 
costs, that we don't get held up by people who want to do something 
different by having the government more involved, when it isn't going 
to save any money and will restrict formularies. It will get the 
government between you and your doctor.
  In other words, I am trying to save Part D. It has been a great 
success. It is accepted by the people. Let's keep drug costs down 
without having this issue interfere with our process.
  We need to preserve the foundation of private enterprise on which 
Part D is based--in other words, the marketplace working. We need to 
get to the real work of reducing prescription drug costs.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Romney). The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. LANKFORD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.