[Congressional Record Volume 165, Number 194 (Thursday, December 5, 2019)]
[House]
[Pages H9287-H9290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       PRESCRIPTION DRUG PRICING

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2019, the gentleman from Arizona (Mr. Schweikert) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. SCHWEIKERT. Madam Speaker, what we are going to do today is 
actually sort of a little follow-up with a couple of other things 
sprinkled in here.
  I want to walk through, once again, some of the numbers and some of 
the good things that have happened. I want to talk also about H.R. 3, 
which is a reference pricing bill that has gone through Ways and Means 
in regard to pharmaceuticals that actually I don't think anybody 
understands what the underlying mechanisms are on how Europe and those 
actually do set drug pricing and to understand the rationing that will 
be coming with that.
  But, first off, what is the greatest threat to our society?
  I am going to argue it is actually the coming mountain of debt. It is 
not Republican or Democrat, it is called demographics. There are 74 
million of us who are baby boomers. 74 million baby boomers were born 
in an 18-year period, we have our earned entitlements coming, and we 
functionally have no cash in the bank for them. So this board is 
really, really important, and I can't believe I don't see it in 
everyone's office here.
  This is a 30-year window. Let's actually just pull out Social 
Security and Medicare. Madam Speaker, you do realize that if you look 
at the Social Security and Medicare from the numbers, we have $23 
trillion in the bank. Now, this one is not inflation adjusted, so these 
are raw numbers, but $23.1 trillion, if you want to be accurate, in the 
bank, but when we roll Social Security and Medicare in and their 
financing costs--the money has to be borrowed to keep the promises--we 
are functioning at $103 trillion in debt.

                              {time}  1630

  It is math. It is not Republican or Democratic. It is demographics. 
We are getting older as a society.
  Since 1971, our birthrates have been below replacement rates. We need 
to deal with the reality of math, but as this place now proceeds, we 
will make math partisan. But the math will always win.
  It breaks my heart because there are things we can do policy-wise 
that make it work, that keep us under or right about that 95 percent 
debt-to-GDP, and we survive our demographic bubble. But we have people 
around here that say crazy things that have no basis in economics, no 
basis in the math, no basis in our demographics. The cruelty they are 
bringing down on our society and my 4-year-old daughter, destroying her 
future, is because of the unwillingness to own a calculator.
  So, one more time, if we pull Social Security and Medicare out of our 
30-year window, we have $23 trillion in the bank. If we put them back 
in, we are $103 trillion in debt in that 30-year window. Remember, just 
the growth of Social Security, Medicare, healthcare entitlements, just 
the growth every 5 years equals the entire Defense Department.
  When you hear some of our brothers and sisters on the left come 
behind the microphone and say, ``Well, if we would just reduce defense 
spending,'' you can wipe out all of defense spending, and in 5 years, 
you are back where you began.
  That is the reality of our demographics. How many people have you 
heard come behind these microphones in the last year, other than myself 
and maybe one or two others who work on these things? It is silent 
because it is really hard to talk about. It is really difficult. It is 
scary. It is the single thing that destroys our economic vitality for 
the future. But once again, it would require owning a calculator.

[[Page H9288]]

  It is lots of people's fault, but it is Congress' fault, but it is 
decades old.
  Here is where most of that comes from. If you take some of the math 
for a couple that retires today--it is not their fault; this is just 
the math--they will have put about $161,000 into Medicare. They are 
going to receive just shy of $500,000 out. Take that, functionally, 
$300,000-plus difference, multiply it by 74 million, and now you 
understand the driver of our debt.
  You will hear people come behind the microphone and say, ``Well, it 
is waste and fraud,'' or, ``We don't tax rich people enough.'' Those 
are all absurd. The percentage of tax revenues as the percentage of GDP 
is within the margin. Waste and fraud, yes, we need to deal with it, 
but it would be a fraction of these numbers.
  Remember, we are about to come up on the 2-year anniversary of tax 
reform. This last fiscal year, unlike every economist that the left 
brought to us out of the crazy--and I know that is mean, but it is 
true.
  Things that were being said on this floor when we debated tax reform, 
reforming our system: ``Oh, revenues are going to crash.'' ``The world 
is coming to an end.'' ``It is Armageddon.''
  We went up over 4 percent in what they call receipts growth last 
year. Our problem is that we spent dramatically more than that. I think 
our spending was approaching almost 7 percent growth because we had so 
many things added to spending. About half of that 7 percent is just, 
once again, demographics. But we grew revenues even with the tax reform 
slightly over 4 percent.
  There should have been joy around here, if you think about where we 
are economically. You all saw the applications for unemployment today, 
10,000 down from what the projection was.
  Once again, we are demonstrating the labor markets are a miracle. 
They are remarkable. I don't think there is anyone living today who has 
lived in a time that is this economically stable, when you look at our 
labor markets, when you look at wage growth, the lack of inflation.
  There should be joy on this floor, talking about the miracle of our 
brothers and sisters who were being written off just a couple years ago 
because they didn't have a high school education, didn't have a certain 
skill, were going to be part of the permanent underclass.
  It turns out those folks who were willing to write off those brothers 
and sisters, those Americans, were wrong. That population--and I hate 
this term, but we use it--those lower quartiles of economics--
education, skill sets--who were being written off, they have had the 
fastest movement of income. You saw the number, if anyone cares about 
these things.
  Last year, a single woman, no partner in the house: 7.6 percent 
growth in wages. These are numbers that I can tell you from being on 
the Joint Economic Committee for years that every economist we would 
bring in would look at us like we were out of our minds if we predicted 
numbers like that. Where is the joy?
  The fact of the matter is there has been more progress in the last 24 
months for our brothers and sisters who have physical issues, have had 
substance abuse issues, have had criminal records, these sorts of 
things, coming back into the labor force.
  There is this thing called U-6 data, U-4 data, all these things. When 
you see the unemployment rate and all this information of workers who 
might be--we use the term ``marginally attached'' and haven't been 
looking, who quit looking, the number of those who are moving into the 
labor force that we barely give any credit for when we see the top-line 
number because the top-line number is those who are looking.
  There is an economic miracle happening right now when you see the 
robustness, the stability of our labor markets. Shouldn't the debate on 
this floor be: It is working for our brothers and sisters who we have 
always said were poor or that we were writing off. Something is working 
for them. How do we keep doing more? How do we keep adopting the 
policies that are working and avoid the crazy policies of just a couple 
years ago that didn't work, that punished these populations?
  These are the folks who had just a really crappy decade. They fell 
further behind every single year. There is some math out there, and it 
is not all put together. I am being maybe a little pathologically 
optimistic here, but there are some preliminary numbers that last 
fiscal year could be the very first year in modern times where income 
inequality did not grow and potentially shrank. It is not because 
wealthy people didn't make more money. It is because poor people made 
more money than they had before.

  Where is the joy? Where is the discussion of how we do more of this?
  It turns out, for all those out there who are busting their 
backsides, working, paying into programs like Social Security and 
Medicare, why aren't we being honest with them that the scale of the 
unfunded nature is devastating?
  If you are a young person today, do understand that when you hit your 
peak earning years, your tax rate will have to be double today's just 
to maintain these basic earned benefits. There is a path, but that path 
requires a whole bunch of things.
  It is going to be my very last board that I am going to put up 
because you have to have incredible economic robustness, and you have 
to have a tax system that maximizes economic vitality, an immigration 
system that maximizes economic vitality, a regulatory system that uses 
smart technologies to maximize labor force incentives, family formation 
incentives, technology adoption incentives, all these things. And there 
is a path to deal with this.
  Then what happens this week is the discussion of H.R. 3, which is the 
drug reference pricing model. Almost no one has read it or understood 
the actual mechanisms it is offering.
  Why do I bring this up as part of an economic discussion? Part of the 
miracle we are about to live is that we are about to live in a time 
where technology, if we legalize it, is about to crash the price of 
healthcare.
  Technology is something that looks like a big kazoo that you blow 
into that instantly tells you that you have the flu, instantly can 
update your medical records on your phone. If we make it legal, it can 
instantly order your antivirals.
  When I talk about healthcare technology, it is a whole string of 
things that will keep us healthy. But the other side is that we are 
about to live in the time of miracles. The single-shot care for 
hemophilia, it is here. It is going to be really expensive, but 
hemophilia is also really expensive.
  We should be talking about ways to have more of these disruptive 
pharmaceuticals that take care of hemophilia, ALS, Crohn's, cystic 
fibrosis, and sickle cell anemia. We are on the cusp of having the 
pharmaceuticals that either stabilize or cure these.
  They are incredibly expensive. These are small populations, but 
remember, 5 percent of the population with chronic diseases is the 
majority of our healthcare spending.
  If we go back to the slide here, the majority of what is about to hit 
us over the next 30 years is Medicare. It is healthcare spending.
  What happens if you crash the price of healthcare? Well, one of the 
ways you do that is you cure people.
  The Democrats are pushing a piece of legislation that sounds at first 
really good. ``Hey, we are going to lower new drug prices by reaching 
out to a handful of European countries and getting their prices. Then 
you can't go more than that, or we are going to give you a 95 percent 
tax,'' which if you reverse it is a 1,950 percent tax.
  Except, you have to understand, and I know this board is really hard 
to read, we are going to use the Great Britain model. What is a year of 
you being healthy worth? It is an honest question because that is what 
is about to be imported into the country. For you, your family, your 
child, what are you willing to believe is the value of a year of 
health? If you are in Great Britain, their model, their formula, is 
$38,000.
  If this breakthrough pharmaceutical would make you healthy for 1 more 
year and costs more than $38,000, it is not purchased. It is not part 
of the formulary. That is what the Democrats are saying we need to 
import into this country.
  So understand that the Democrats are about to say a year of you being 
healthy is not worth $38,001. I don't think they know that. I don't 
think anyone who has read it understood how this handful of European 
countries builds their pricing mechanisms, but they do it by scarcity.

[[Page H9289]]

  They basically say, ``Hey, I know this would cure you for the next 
year, but you are out of luck. It is over $38,000 here in Great 
Britain, so you are on your own.''
  At a certain level, this is just incredibly cruel. How could you look 
someone in the eyes and say: ``I value your life at $38,000 for a year 
of you being healthy.'' But that is the cruelty that is being 
discussed.
  At first, it sounds really wonderful: ``Hey, we are going to lower 
drug prices by using reference pricing.'' But the fact of the matter 
is, how do you tell Americans that what this means is not only are you 
not going to be able to have these things that keep you healthy anymore 
because they are going to be outside the price window, but the other 
thing is there was a major report put together early this week that 
also said a substantial number of the drugs, like 100-plus, that are in 
the pipeline, that are about to cure our brothers and sisters who are 
part of that 5 percent of the chronic conditions that is the majority 
of our healthcare spending, those cures are going to stop because they 
are really expensive, really risky, really hard to put together?
  The vast majority of them fail, so they sort of roll the dice and 
say: ``If we succeed, we get a fairly decent payday, but it is going to 
pay for a whole lot of failed drug trials.''
  We are about to make a policy decision as a country: ``We are not 
going to cure you. You get to suffer.''
  The pharmaceutical industry, for all the frustrations, they will go 
back to what they were doing a couple of decades ago, saying they are 
just going to do a derivative on an existing drug, so, therefore, they 
have very little research costs. They already know what their profit 
margin is. It is nice and safe to do.

  The things the Republicans did in this Congress, where we did the 
CURES Act a few years ago, where we created a pipeline to cure people, 
that pipeline is about to get crushed.
  You have to understand the cruelty of this. This is just math. This 
is what other countries do on their formula.
  If you really wanted to crash the price of pharmaceuticals, it turns 
out, yes, there is a whole list of things that are bipartisan: the way 
you deal with the capital that is used for the investments, the way you 
do the patents, the way you allow competing types of biologics and 
others come to market.
  But there is another crazy thought experiment here that almost no one 
has ever talked about. Do you realize that half the pharmaceuticals 
that will be picked up today, so half the pharmaceuticals someone is 
going through a drive-through for or walking into their pharmacy for 
right now, half of them will not be used or will not be used properly? 
Just part of the thought experiment.
  They will not be used or will not be used properly. That is going to 
cost the country about half a trillion dollars this year. It is 16 
percent of the total U.S. healthcare expenditures because people don't 
take their prescribed pharmaceuticals properly, and they get sick and 
die.
  It turns out we have all sorts of things we could do today, but it 
requires being creative. Let's face it, this is an absolute creativity-
free as well as a math-free zone.
  The little bottle that has the top that tells you when grandma has 
opened it so that you know she is taking her pharmaceuticals that keep 
her alive, we have that technology. It is not very expensive. It 
changes drug efficacy usage because you know when you took it.
  How many of you know someone that has multiple pharmaceuticals they 
take, and they have to take them at certain parts of the day? We now 
have little distribution devices. There are several of them on the 
market that drop the pills, tell you the time, let you know if you 
don't pick them up. It rings your phone, rings the family's phone, if 
they are not picked up.

                              {time}  1645

  It turns out there are technology things that could actually change 
almost a half a trillion dollars of expenses a year. This is 
dramatically bigger than blowing up the cures that are coming, but it 
requires some creativity to understand that half of the pharmaceuticals 
that are being picked up today will not be taken or will not be taken 
properly.
  Another proposal--and do it more as a thought experiment: For really 
high-value pharmaceuticals, go look in your own personal medicine 
cabinet right now. How many of them are still sitting in there? They 
are just getting old. You did not take them. They are just sitting 
there.
  Why don't we package those high-value ones in a double-layer blister 
pack or in a pod that keeps them sterile and allow you to return them? 
Maybe there are folks in our society who those really expensive 
pharmaceuticals, if they were returned and could be redistributed, they 
would still be sterile.
  There are creative ideas where you could have this massive disruption 
in the price that we as Americans put out in our drug costs. But it 
requires some creativity instead of the arrogance of we are basically 
going to blow up your future. Because that is what is being proposed to 
us.
  But this number is stunning, if I came to you and said, if you could 
change the way pharmaceuticals are used and have the efficacy of proper 
use, it is 16 percent of all the healthcare expenditures of this 
country.
  I threw this slide in as more back to: Remember how we were just 
talking about Medicare and, functionally, that is the ultimate driver 
of our future debt and, unless we have a disruption in healthcare 
costs--not debates about how we finance, but disruption in the cost. 
Let me give you a single example of what the investment in cures means.
  I know this chart is almost impossible to read, but the simple point 
is about 30 percent of Medicare spending is going to be diabetes. A 
single cure--now, diabetes is complex. We know it is more than the 
production of insulin. There are autoimmune responses. There is 1 and 
2. It is complex, but do the thought experiment with me.
  If you cured diabetes tomorrow, almost 30 percent of that unfunded 
liability of Medicare goes away. That is why it is so incredibly 
important we are investing in these cures that H.R. 3 is about to 
destroy.
  We always either start or end with this slide. We are trying to make 
a simple point that, if we can get the policy correct here, we can have 
an amazing future. The United States can have an amazing future.
  But we have spent almost the year here--2019, we have, functionally, 
done nothing.
  Do you remember all the promises of we are going to work bipartisan 
because we have a Republican Senate and then, obviously, the left, the 
Democrats, control the House here? We are going to work together. We 
are going to do all these creative things together. And we have done 
none of it.
  We have spent lots of time on impeachment. We have pushed out a 
handful of bills that were just almost crazy in their policy sets to 
satiate the radicalized face of the Democrats.
  I am sorry. I know that is mean, but it is true.
  So let's take a step backwards and pull out our calculators and 
understand, once again, that 30-year window, $103 trillion of debt--if 
you actually normalize it to inflation adjusted. Okay. So it is, at 
today's discount rate--I am not sure. It would probably be somewhere in 
the $83 trillion of debt, inflation adjusted.
  So here is our argument: Get the things that grow the economy right. 
We have demonstrated getting the Tax Code right has produced a miracle 
of economic growth in the way of labor participation. Our brothers and 
sisters, people, are working. And it turns out those have cascade 
effects in everything from health to there will be falls in substance 
abuse use. We see great things happening.
  But with economic growth, we have to get immigration correct. We have 
to get trade correct. We have to get the way we regulate, using 
technology. Instead of a 1938 model of fill out lots of paperwork and 
shove it in a file cabinet, and when you screw up, we pull out the file 
cabinet so we can sue you, using crowdsource technology where we know, 
if you screw up, we catch you instantly and we can fix it right then.
  There are amazing changes right here.
  Population stability: How do you encourage families? How do you build 
an immigration system that actually is

[[Page H9290]]

more talent-based so you maximize economic growth so we can keep our 
economic promises?
  How do you encourage people to be in the labor force?
  One of the very odd things we see in the data is that December, a 
year ago, suddenly we saw in the data statistics millennial females 
moving into the labor force at substantial numbers but millennial males 
still substantially underperforming. Why? Is this the opioid crisis? 
Are there other factors?
  We need to know those sorts of things because, it turns out, when we 
have entire quartiles of our population who are underperforming in the 
labor market, it has really bad societal cascade effects.
  So let's work on policies that get as many folks who are interested. 
Whether you be retirement age or that millennial male, what do we have 
to do as a society to encourage, to prod, to push for you to be in the 
labor force? Because that is important not only to you as an 
individual, but it is really important to the country's economic 
stability.
  Technology disruption: We just talked about the curative drugs that 
are coming. We also can talk about the sensors and the other things 
that are going to allow us to stay healthy. How do we update the laws 
so that thing like that flu kazoo isn't illegal?
  There is a reason you didn't go to Blockbuster Video last weekend. 
Technology changes. We need to make sure our law sets are sympathetic 
to the changes that can reduce our prices in healthcare, to protect the 
environment and so many other things.

  Yet we are decades behind in the way we write laws here and 
understanding how to future-proof those laws so, when we have 
disruptive technologies--and anyone who is really interested in this, 
pull out your phone. Go to a search engine, and go look up ``MIT 
ambient air capture'' and look at the miracle they have.
  If what they have published is correct on, now, their price per ton--
they believe they can pull CO2 right out of the air or do it 
right over a smokestack. If those numbers are correct, we now have a 
major change in CO2 emissions in the world because of our 
ability now, at amazing prices, to be able to pull it almost right out 
of the air.
  These technologies are here. Why aren't we here talking about them on 
the floor, and how to encourage more of it and how to get it rolled out 
in society, not only here, but across the world? Because, if you 
actually care about global warming--or climate change or whatever the 
current pop term is--it turns out there are amazing technology 
disruptions that are here. The only problem is they don't allow you to 
control other people's lives; they just solve the problem. And are we 
about solving the problem or just the control freaks who are often the 
Members of this body?
  And then other things: The earned entitlements. You have earned your 
Social Security. You have earned your Medicare. Are there things we can 
do in those benefits to encourage you to stay healthier; to, if you 
feel like it, work; to actually, instead of taking your benefits, say 
how long would you like--if we gave you a spiff, would you wait?
  There is tinkering you can do here that actually makes the programs 
more sound. And if you do it all together, we believe we have a model 
that provides an economic future where we are not destroyed by the 
growing debt.
  But there is no single answer. It is going to have to be almost a 
holistic approach of lots of types of policies woven together, and 
every single one of them needs to be about the reality of our 
demographics.
  And now the experiment I will ask you all to engage in: Watch the 
floor this week and see how many people will ever come behind these 
microphones and talk about the economic growth and survival of this 
country because of what is about to happen, the debt that is about to 
crush us and the fact that we are not talking about it. Instead, we are 
busy, basically, doing levels of absurdity around here.
  The cruelty you have just also subjected my 4-year-old daughter to--
and her economic future--you should all be ashamed of yourselves, 
ourselves, myself, because there is a path. The problem is this path 
doesn't ideologically satiate those who have just gone so extreme.
  But the math is real, the math works, and the math, Madam Speaker, 
always wins.
  Madam Speaker, I yield back the balance of my time.

                          ____________________