[Congressional Record Volume 165, Number 126 (Thursday, July 25, 2019)]
[Senate]
[Pages S5094-S5095]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        PRESCRIPTION DRUG COSTS

  Mr. CORNYN. Mr. President, this morning, the Senate Finance Committee 
marked up a legislative package that was designed to address the high 
prescription drug costs, which have become a burden to Americans of all 
ages. This is part of a bipartisan effort to make targeted reforms to 
our healthcare system in order to lower costs for patients and 
taxpayers without interfering with the free market or the beneficial 
innovation that comes from it.
  Last month, the Health, Education, Labor, and Pensions Committee and 
the Judiciary Committee passed legislative packages that were designed 
to support this goal. This morning, the Finance Committee passed a 
package called the Prescription Drug Pricing Reduction Act. This 
legislation looks specifically at reducing prescription drug prices, 
particularly out-of-pocket costs, for seniors and children through 
Medicare and Medicaid reforms.
  I have heard a lot from my constituents in Texas about the impact of 
these high costs.
  Bob from San Angelo told me that both he and his wife have Medicare 
Part D and are struggling to stretch their retirement incomes far 
enough to cover the expenses for their prescription drugs. He told me, 
each month, they pay nearly $800 for Medicare and Medicare supplements. 
On top of that, they are strapped with high prescription drug costs. In 
the first 4\1/2\ months of this year, Bob said they spent more than 
$1,600 on his wife's medication alone. For seniors who live on fixed 
incomes, these high costs can simply be untenable.
  Then there is Michael, another one of my constituents, who told me 
about his continued struggle to cover the cost of his medication. He 
said: ``It feels like we are being taken advantage of because they know 
we have to take these drugs.''
  These individuals have been paying into this system for decades, and 
it is high time we look at ways to reduce the financial strain and 
provide some relief.
  Now, coming up with policies that will lower out-of-pocket costs is 
not easy. The whole drug pricing regime is enormously complex--frankly, 
it is opaque--particularly the relationships between pharmacy benefit 
managers and drug manufacturers, but we need to work hard at this 
effort to lower costs in Medicare and Medicaid and to decrease the high 
cost of prescription drugs even in the commercial markets.
  I appreciate the commitment of Chairman Grassley and Ranking Member 
Wyden to identify potential reforms, and I believe the package that was 
voted out of the Finance Committee this morning is a step in the

[[Page S5095]]

right direction. This is not a statement of endorsement of the 
legislation as it has come out of the committee. A lot of work needs to 
be done, particularly a lot of work in order to reconcile the different 
approaches of the different committees--the Health, Education, Labor, 
and Pensions Committee and the Judiciary Committee--because the last 
thing we want to do is to go through this arduous, complex legislative 
exercise only to find out that we have failed to lower out-of-pocket 
costs for American consumers or that we have introduced some other 
unintended consequence that makes things worse and not better.
  The journey a drug takes from research and development to 
manufacturing, to pharmacy shelves, and eventually into our medicine 
cabinets is enormously complicated.
  As I said, once a consumer has purchased a drug, figuring out who 
gets what part of each dollar requires--well, I was going to say it 
requires a Ph.D. It requires even more than that because you may need 
to hire an ex-FBI agent to try to track down what percentage of each 
dollar each of the players in the prescription drug field actually 
gets. As a consumer, this is particularly alarming because we don't 
really have any idea of whether we are paying a fair price or who is 
profiting and at what point or whether people are doing things that 
benefit their bottom lines. They don't actually add value to the 
system. Ultimately, they end up costing consumers more out of pocket.

  When it comes to Medicare and Medicaid, it is doubly concerning 
because, in most cases, these prescriptions are being at least 
partially subsidized by taxpayer dollars. So we need to shine a bright 
light on the reasons behind these high costs and price increases to 
make sure patients aren't being gouged and to make sure the 
government--in other words, the taxpayer--isn't being overcharged. That 
is one of the primary goals of this legislation. It would require 
manufacturers to report information about price increases to the 
Department of Health and Human Services as part of that transparency 
effort.
  As I suggested a moment ago, it also looks at the role of pharmacy 
benefit managers who are the intermediaries who link manufacturers to 
consumers. They negotiate with the manufacturers to secure rebates, 
which create a net price, but it doesn't appear that, by and large, 
this actually flows to the consumer or to the patient. Frequently, it 
is used, we are told, to keep premiums lower by the health plans. Yet 
we don't know that for sure because trying to get access to the 
information is really challenging, and the size of the rebate could 
mean the difference between a drug's being covered by insurance or not. 
Oh, by the way, rebates don't help you at all for your copay or for 
your deductible.
  These days, we know, for example, for many Americans, the Affordable 
Care Act has resulted in sky-high deductibles and high premiums. That 
means consumers have to pick up more of the cost at the list price, not 
at the net price, which is negotiated by the pharmacy benefit managers 
who work together with the healthcare plans.
  I find it very strange, with as big a role as the pharmacy benefit 
managers play, that we know very little about how they operate or 
whether they all operate exactly the same or differently. This 
legislation would require pharmacy benefit managers to disclose details 
of the discounts of rebates they receive and finally pull back that 
cloak of secrecy.
  I do have concerns about one portion of the bill that was voted out 
of the Finance Committee this morning, which would require 
manufacturers to pay a rebate on drug price increases that are higher 
than the rate of inflation. The Congressional Budget Office has 
estimated the inflation rebate will save $50 billion for Medicare. It 
claims it will lower out-of-pocket costs for beneficiaries by $7 
billion and lower premiums by $4 billion.
  I asked the head of the CBO this morning: Well, if everybody saves 
money, who ends up paying more money? It basically comes out of the 
manufacturer's hide.
  This really speaks to my other major concern, and that is that the 
Federal Government not get into a position in which it is setting 
prices. We know that when you institute price controls on a commodity--
particularly if you are the Federal Government--and when you try to 
negotiate with somebody, it is not a level playing field. When you 
negotiate with somebody as the Federal Government, you are literally 
doing it with a gun to one's head or figuratively doing it with a gun 
to one's head. It is not a normal give-and-take negotiation. 
Ultimately, what happens with price controls is it creates scarcity 
because, at some point, the manufacturer or the producer of that 
commodity will say: I am not going to produce that at that controlled 
price by the government. So this is a serious concern.
  The CBO also estimates that this rebate would reduce costs for 
prescription drug benefits offered by commercial insurance plans. 
Although we don't have a final score by the CBO--this is just a 
preliminary plan--I will share with you an observation made years ago 
by Senator Bob Bennett, of Utah, when I first came to the Senate.
  He said: The one thing I can tell you about CBO scores is that they 
are always wrong. I can't tell you if they are too high or too low, but 
this is part of the complexity of trying to predict the future and how 
human behavior will affect their calculations and analyses. Sometimes 
they get it right, and sometimes they get it wrong.
  Despite the encouraging estimates, many members of the committee had 
significant concerns that this policy could lead to higher launch 
prices or higher out-of-pocket spending. So this morning in the markup, 
I supported an amendment by our friend from Pennsylvania, Senator 
Toomey, that would have removed this inflation rebate penalty. 
Unfortunately, it failed on a tie vote. It is something I don't think I 
have seen before, in which 14 Senators voted for it and 14 voted 
against it, but it means the amendment failed.
  Here is the problem. There is a delicate balance between preventing 
price increases, which is something we would all like to do, and still 
preserving the market-based approach that has made Part D such an 
overwhelming success. It actually is a government program that works 
better than we thought it would when it was passed.
  I think we need more input before this bill comes to the floor, for 
there is a lot of work yet to do. As the old adage goes, anything worth 
doing is worth doing right, and we had better get this right. I think 
there will be quite a price to pay if we undertake this huge exercise 
and end up failing to reduce consumers' out-of-pocket costs or creating 
more problems as a result of unintended consequences. Providing our 
seniors peace of mind when it comes to their healthcare costs is 
certainly worth doing right.

  So I believe we need to continue refining this proposal to strike a 
better balance and effectively deliver on our promises. It is important 
that we not rush this process. There is no artificial deadline. There 
shouldn't be. That is why the Senate was created, to force deliberation 
in a body of 100 Senators with challenging rules to actually get things 
to the President's desk for his signature. But what it should do is 
force deliberation and force us to do our due diligence to make sure 
that we are not creating more problems or failing to accomplish our 
goal.
  I told members of the committee this morning that I don't think this 
bill, as written, is anywhere near ready to be considered on the floor. 
I asked the chairman and the ranking member to commit to continue 
working with Members before this does come to the floor, and I was glad 
that both of them agreed to do so.
  While I believe we are making some progress, we better be very 
careful, and we shouldn't impose on ourselves any artificial deadlines 
in order to get this thing done and perhaps get it done badly.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.

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