[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.