[Congressional Record (Bound Edition), Volume 148 (2002), Part 8]
[House]
[Pages 11171-11178]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         PRESCRIPTION DRUG BILL

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from New Jersey (Mr. Pallone) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I am pleased to say that I will be joined 
this evening by some of my Democratic colleagues as we discuss the need 
for a real Medicare prescription drug benefit.
  I have been on the floor many times in the evening during Special 
Orders criticizing the Republican leadership in the House because of 
their failure to address the issue of prescription drugs and even bring 
a bill to the floor. So I want to start out by saying I hoped since 
they have promised that they are going to bring up a prescription drug 
bill to the floor of the House before the July 4 recess, which would be 
by this Thursday or Friday, I am hopeful since they made that 
commitment to do so that we will see some bill come to the floor, and 
there will be a debate on the prescription drug issue by end of the 
week.
  I am still somewhat skeptical that we are going to see that from the 
Republican leadership because initially they said this was going to 
happen Wednesday, and now we hear Thursday and now we hear maybe even 
Friday. So certainly if they do not bring up the bill at all, they 
should be seriously chastised for doing that since they promised it for 
2 months.
  But even if they do bring it up, my great disappointment and that of 
my Democratic colleagues is that it is a sham proposal. It is not a 
bill that will provide any benefit or certainly any meaningful benefit 
to any senior citizen. And let me just explain why and very briefly 
raise two, I think, very major points. One is that the Republican bill 
is not a Medicare proposal. We all know that for many years since the 
mid-60's when Medicare was first signed into law that Medicare has been 
a government program that has provided senior citizens, every senior, 
with a guaranteed benefit for their hospital care and a guaranteed 
benefit for their physician's care. The bottom line is it works. It is 
a government program that works.
  Well, the Democrats have been saying, if we have a program that works 
like Medicare, then just expand it to include prescription drugs. And 
our proposal is very much like part B right now that pays for the 
doctor bills. There is a defined guaranteed benefit under Medicare. 
Everyone gets it. There is a very small premium, $25 a month, a low 
deductible of $100 a year, and 80 percent of the cost of the 
prescription drugs are paid up to $2,000 out-of-pocket, in which case 
100 percent of the prescription drug bills are paid.
  We have a very effective cost-control pricing mechanism that says 
that since there is now 30 to 40 million seniors under Medicare, that 
the Secretary of Health and Human Services has a mandate to negotiate 
lower prices on behalf of this large pool of senior citizens to bring 
prices down.
  The Republicans have gone just the opposite. Rather than provide a 
Medicare benefit, rather than continuing and expanding the Medicare 
program to include prescription drugs, all they are proposing, if it 
even comes to the floor this week, is to throw some money to private 
insurance companies hoping that these insurance companies will offer 
some kind of drug policy to senior citizens. And we know that the 
insurance companies are saying they are not going to provide these 
kinds of drug policies because they have never existed before.
  And even if they do, there is no guarantee seniors will be able to 
buy one, what the premium is going to be, whether they will get certain 
prescription drugs, nothing, and no mechanism in the Republican bill to 
deal with the issue of price and trying to reduce costs. In fact, there 
is actually language in the Republican bill that says that the 
administrator of the program cannot interfere in any way and try to 
reduce costs or reduce prices.

[[Page 11172]]

  So we have here a sham proposal on the part of the Republicans. I 
hope they bring it up. I hope we have a debate by the end of the week 
on the prescription drug issue, because we have not had it for almost 2 
years as this Congress draws to a close. But when they bring it up, we 
are going to have to show there really is no benefit at all and no 
proposal at all.
  Mr. Speaker, I yield to my colleague from Ohio, the ranking member on 
the commerce Subcommittee on Health, who has been an outstanding 
spokesman on this issue and who has really fought very hard to make 
sure that we get a real Medicare prescription drug proposal.
  Mr. BROWN of Ohio. Mr. Speaker, I thank my friend from New Jersey, 
who has been, as a member of the Subcommittee on Health has helped to 
lead the charge on all these issues in the last couple of years as 
Congress, some of us, have moved towards a real Medicare benefit.
  I want to sort of build on what my colleague has just said. Our plan, 
the Democratic plan, a Medicare prescription drug benefit, is 
administered by a program that Americans have learned to trust in the 
last 37 years, the Medicare program, while the Republican plan 
subsidizes the insurance companies to set up a Medicare prescription 
drug private insurance HMO plan. And we know how HMOs have treated 
seniors throughout this country over the last 5 years. Our plan, again, 
is a Medicare benefit. Their plan sets up drug company HMOs.
  Now, let us for a moment again compare the two plans. The Democratic 
plan has a $25 premium, the Republican plan, the premium is undefined. 
The premium will be set by insurance companies. And if what has 
happened in the States is any indication, the premium could be as high 
as $70 or $80 or $90 a month. The Democratic plan has a $100 
deductible. The Republican plan, again set by the insurance companies, 
will have a deductible of at least $250. The Democratic plan, while 
there is a 20 percent copay for the first $2,000, the Republican plan 
has a 20 percent copay for the first $1,000 then a 50 percent out-of-
pocket cost copay for seniors the next $1,000. Then, at $2,000, the 
Democratic plan will cover all drug costs from there on up. The 
Republican plan covers no drug costs for the next $1,800. So if a 
senior's drug bills are $4,000, $5,000, $6,000, they are out of pocket 
thousands and thousands of dollars in the Republican plan.
  But the ultimate comparison is look what has happened with this 
issue. The Republican plan is written by the drug companies. It is 
clear the drug companies are very happy with the Republican plan. In 
fact, in The Washington Post last week, and I quote, ``A senior House 
Republican leadership aide said the Republicans are working hard behind 
the scenes on behalf of the drug industry to make sure that the party's 
prescription drug plan for the elderly suits drug companies. 
Republicans favor a private sector solution to lowering drug costs,'' 
and on and on. But I will say it again, a senior House Republican aide 
said the Republicans are working behind the scenes to make sure the 
plan, the drug plan for the elderly, suits the drug companies.
  The Democratic plan was written with input from the AARP, from 
consumer groups, from all kinds of senior citizen organizations that 
want to see seniors benefit from this plan. The Republican plan was 
written by the drug companies so that drug companies benefit.
  The logical question then is, why would the Republicans do that? 
Well, last week, as my colleague, the gentleman from New Jersey (Mr. 
Pallone), saw as a member of our committee, right in the middle of the 
markup, right in the middle of hearing amendments and working on this 
legislation, the Republicans, on Wednesday evening at 5 p.m., and we 
usually work much later than that when we are doing important pieces of 
legislation, at 5 p.m. the Republicans adjourned the committee so they 
could go off to a fundraiser underwritten by Glaxo-Wellcome, a British 
pharmaceutical company, to the tune of $250,000 and supported by other 
drug companies.
  PhRMA, the trade association for the drug companies, committed 
another $250,000; other drug companies put in $50,000, $100,000, and 
$250,000. So that the drug industry was pumping literally well over $1 
million into this fundraiser. And so we stopped working on the drug 
bill at 5 p.m. and the Republicans went to this fundraiser underwritten 
by America's drug companies, the world's drug companies, Glaxo-
Wellcome, Bayer, and others from outside the United States.
  Then the next day the Republicans returned to the committee hearing 
and voted consistently in support of the Republican prescription drug 
plan programs and consistently in support of what corporate interests, 
what the drug companies wanted.
  As an example, I had an amendment that no Member of Congress should 
get a better benefit than senior citizens; seniors should have the same 
prescription drug benefit as Members of Congress. The drug companies 
did not want that, so the Republicans voted down the line against that 
amendment that says to the public senior citizens, sorry, your drug 
benefit is not as good as a Member of Congress.
  Other amendments, offered by the gentleman from New Jersey (Mr. 
Pallone), by the gentleman from California (Mr. Waxman), by the 
gentleman from Wisconsin (Mr. Barrett), by several on the committee, by 
the gentlewoman from California (Mrs. Capps), also were voted down by 
the Republican majority because the drug companies did not want them. 
Anyone sitting in that committee with a scorecard could have written a 
column that reflected senior position, drug company position, and every 
single time the Republicans went with the drug company position. Every 
amendment, on rural health, on how to control and bring down prices of 
prescription drugs, on closing what is called the donut hole, or the 
gap, where prescription drug benefits simply end in the Republican plan 
at $2,000, one issue after another the Republicans checked the box on 
whatever the drug companies wanted.
  The kind of money that the Republicans raised from the drug companies 
last week is scandalous. The kind of money Republicans raised from drug 
companies and then turned around and voted the Republican line is 
absolutely outrageous. Americans need to speak out, tell the 
Republicans in this body how ashamed they are that they would take that 
position and vote the drug company line after pocketing literally 
millions of dollars from drug company interests.
  Until the Republican leadership in this Congress gets its act 
together and realizes this drug bill should be for seniors, not for 
drug company interests, Americans are going to continue to see the kind 
of stalemate here that has happened.
  I just urge people in this country to understand where each party 
sits. The drug companies and the Republicans are on one side, seniors 
and Democrats are on the other side. And that is why this Thursday or 
Friday, when we vote for this, it is important that this House pass the 
Democratic substitute which gives a real benefit, which limits prices 
that drug companies charge so they cannot continue to charge Americans 
more than they charge the British and the Japanese and the Germans and 
the French and the Canadians and the Israelis and everybody else on 
Earth.
  The fact is it is an industry that is the most profitable industry in 
America. They pay the lowest tax rate of any industry in America, U.S. 
taxpayers help to fund research and development, and the drug companies 
turn around with their Republican friends in Congress and continue to 
stick it to the American public.

                              {time}  1945

  I thank the gentleman from New Jersey (Mr. Pallone) for the good work 
the gentleman has done on this legislation.
  Mr. PALLONE. Mr. Speaker, I thank the gentleman for his comments. He 
articulates so well the price issue.
  I have to say during that Committee on Energy and Commerce markup, 
there were two things that we realized over and over again. One is the 
Republicans were never going to put this program under Medicare because 
they are

[[Page 11173]]

ideologically opposed to Medicare because they see it as a government 
thing, and they were not going to do anything to effect price 
reductions.
  Mr. BROWN of Ohio. Mr. Speaker, Republicans want Medicare to take a 
right turn, and that right turn is to expand health maintenance 
organizations, to deliver the prescription drug benefit through a 
privatized HMO/insurance system. We want to see Medicare remain a 
public program and deliver the drug benefit the way it delivers 
hospital benefits and physician benefits. The Republicans want to put 
Medicare back into a private insurance scheme just like HMOs and put 
the prescription drug coverage into that same scheme to privatize the 
greatest government program in history, Medicare.
  Mr. PALLONE. Mr. Speaker, we know when Medicare began under President 
Johnson it was because the private sector was not able to provide 
health insurance that was affordable for most American seniors. That is 
why the program was set up, not because we wanted a government program 
or we thought a government program was superior, but because the 
private sector was not providing any kind of affordable health 
insurance that most seniors could buy.
  I want to develop a little bit what the gentleman from Ohio (Mr. 
Brown) said on the pricing issue. The incredible thing about the 
prescription drug industry is that they get so much money and help from 
the Federal Government right now, and I have a lot of the 
pharmaceutical companies headquartered in my district, and New Jersey 
as a whole, so I am not saying that they should not be able to make a 
profit, but think about the fact that this is an industry that get a 
tremendous amount of money from the Federal Government through the 
National Institutes of Health to do the research on prescription drugs. 
Then they have a patent program where they get exclusivity for new 
drugs that are developed for a long period of time and subsidize their 
patents through the exclusivity program, and then they get a break on 
the advertising through the Tax Code, and finally they have a situation 
where they closed the border for importation of prescription drugs from 
other countries because they know if that were to happen and we were 
able to import prescription drugs from Canada or Europe, we would have 
a situation that would bring the cost down.
  So everything is being done by the Federal Government to make sure 
that they get a nice profit, whether it is money for research, whether 
it is preventing importation of foreign drugs, whether it is the patent 
exclusivity that they get, or the advertising break that they get 
through the Internal Revenue Code, and there are probably many other 
things that I could mention as well.
  On top of that in terms of tax breaks and money and exclusivity of 
patents, even with all that help, they still want the American people, 
they want to charge the American people the highest drug costs in the 
entire world. That is not fair. That is why the Democrats are saying an 
important part of this prescription drug plan that we should pass here 
has to address the price issue. Otherwise, prescription drugs will be 
unaffordable and the Federal Government will not be able to afford a 
prescription drug plan that will actually help senior citizens.
  I want to reiterate how important the price issue is. The Democrats 
in our bill, because we have our prescription drug program under 
Medicare, language that mandates that the Secretary of Health and Human 
Services take the 30 or 40 million seniors that are now part of the 
Medicare program and negotiate lower prices for them. He has the power 
with all these seniors to do the type of negotiation that would reduce 
prices because he can bargain. The Republicans not only have nothing 
like that in their bill, they have a clause, and I want to mention it 
briefly, in their bill called noninterference.
  It specifically says that the person who administers the prescription 
drug program under their legislation cannot in any way require or 
institute a price structure for the reimbursement of covered outpatient 
drugs or to interfere in any way with negotiations between these 
private insurers and the drug manufacturers or wholesalers or other 
suppliers of covered outpatient drugs.
  So the Republicans, contrary to the Democrats, are so concerned that 
under whatever program they have that somehow prices would be reduced, 
that they actually put in language to say it is not possible for the 
administrator of their prescription drug program to do anything to 
bring costs down. It is unbelievable how much they are willing to do 
the bidding of the drug industry because of the amount of money that 
they get from the drug industry.
  Mr. Speaker, I yield to the gentleman from Massachusetts (Mr. Lynch).
  Mr. LYNCH. Mr. Speaker, I thank the gentleman from New Jersey (Mr. 
Pallone) and also the gentleman from Ohio (Mr. Brown) for their great 
work on this issue.
  Mr. Speaker, I am new to this Congress and I must say I had a handful 
of issues that I thought stood head and shoulders above all issues when 
I came to Congress; and one of those issues, quite frankly, that I 
think would greatly improve the quality of life for seniors in this 
country, America's greatest generation, would be to create a reliable 
and affordable drug benefit program under Medicare. That was my hope 
when I came to this Congress, and that is my hope tonight.
  However, I must admit to great disappointment in reviewing the 
Republican plan for prescription drugs. I think that we need to start 
from the very beginning. In 1965, when Medicare was created, I think 
that back then there was a good-faith, bipartisan effort to develop a 
plan that would indeed address the health concerns of a lot of our 
seniors. However, in 1965, the model for health care for seniors at 
that time, the paradigm, if you will, was for seniors to receive health 
care. It meant hospitalization in a great many respects.
  Nowadays, though, fast forwarding to go to what we have today, for 
many seniors, in order to achieve the goals of Medicare, we need to 
provide solid, reliable, affordable prescription drug coverage. Many 
medical benefits accrue to seniors now because of recent discoveries 
and developments by pharmaceutical companies who have done good work 
with their research. We need to provide access to those prescription 
drugs that offer a medical benefit. Today, to accomplish that, we need 
to have a plan under Medicare that is available to all seniors.
  Under the Republican plan, there are a number of problems. First of 
all, a senior citizen would have to go out and find an insurance 
company or a plan that would allow them to participate. There is an 
obstacle at the very beginning. I think many seniors who have tried to 
acquire Medigap insurance, things of that nature through a private 
insurer, find out those insurers are few and far between, and the cost 
is prohibitive. Also in this program there is a substantial premium for 
seniors who would participate in what the Republicans are proposing 
here.
  There is at least a benchmark premium of $35 a month, which is $420 a 
year, with a deductible of $250 a year. Under the Republican plan, the 
seniors would pay 20 percent of the first $1,000 and then 50 percent of 
the next $1,000. So if a senior has a regular and serious need for 
prescription drugs, the very people we are trying to help in this, 
there are substantial costs.
  In fact, the out-of-pocket premiums continue until that senior 
basically has reached the $3,800 a year mark. That is when the full 
government benefit through their plan would begin. Again, that is not 
under Medicare. So there are serious problems with that.
  I think this plan, the Republican plan, allows the seniors to be 
victims of low expectations. I think we can do better. I sit on the 
Committee on Veterans Affairs, and under the VA proposal, the 
pharmaceutical program under the VA, we have a straight $7 copay for 
seniors, for our veterans who participate under that program. It is 
indeed a model that we should use in providing the Medicaid 
prescription drug program under Medicare.

[[Page 11174]]

  Now, the way the VA does it, they use the collective weight of their 
purchasing power and they negotiate in a tough and competitive way with 
the drug companies. They end up getting a good deal for our veterans 
through good, hard-nosed negotiations, and that is the type of 
negotiations we should have with our drug companies on behalf of our 
seniors under Medicare.
  The very provision that the gentleman from New Jersey (Mr. Pallone) 
has pointed out, there is a provision under this Republican bill that 
actually requires the administrator not to interfere, not to go after 
discounts, and not to upset what the market would otherwise charge. I 
think that cuts the legs out from under this plan and under the 
administrator and prevents us from actually achieving what we are 
trying to do in this Congress.
  Mr. Speaker, we owe it to our seniors to provide for this drug 
benefit. This is what they need. We have a responsibility to provide 
it, and we should let nothing come in between ourselves and that goal.
  Mr. PALLONE. Mr. Speaker, I thank the gentleman for what he said. He 
brought up many important points, but there are two I want to develop a 
little more because I think the gentleman stated something so 
important.
  One, the gentleman is a member of the Committee on Veterans Affairs; 
and how it works with the VA, the administrator, because he has all of 
these veterans, he is authorized by Congress to negotiate prescription 
drug prices for the VA. I guess it is pursuant to the Federal Supply 
Schedule, and he is able to get huge discounts. I understand they are 
30, 40 percent, sometimes more.
  We actually had an amendment, the gentleman from Michigan (Mr. 
Stupak) had an amendment in the Committee on Energy and Commerce that 
was totally tied to the Federal Supply Schedule and that used the VA as 
his example. In other words, he wanted to put language in his amendment 
in the bill that would have said that the Secretary had to use the 
Federal Supply Schedule and do the same thing that the VA administrator 
did for all senior citizens.
  Not only was that voted down strictly on partisan lines with all of 
the Republicans voting against it, but they actually articulated that 
they did not want that type of negotiating power for senior citizens. I 
do not have the faintest idea why. There was some suggestion it was 
okay to do it for the VA because they fought for the country, but 
seniors should not be treated the same way.
  I wanted to point out that a lot of those seniors were also veterans, 
so that made no sense. Just to show how far they were willing to go to 
say they did not want any kind of pricing mechanism in this bill, they 
actually rejected an amendment by the gentleman from Michigan (Mr. 
Stupak) that would have modeled itself on the VA, the way the gentleman 
described it.
  The other thing that the gentleman said that was so important is the 
whole idea of prevention. In other words, the gentleman pointed out 
when Medicare started out in the mid 1960s, the reason it was set up 
was because most senior citizens had no health care. They could not buy 
health insurance.
  At that time, we primarily were providing through Medicare for 
hospitalization; and then later we expanded it to under Part B to cover 
doctor bills. But the reason we need this prescription drug benefit is 
because things have changed so much over the last 30 years. Now the 
prescription drug benefit is just as important as Part A for 
hospitalization and Part B for doctors' bills.

                              {time}  2000

  I would venture, and you pointed out, and I know that the gentlewoman 
from Texas has said this before and the gentleman from Ohio has said 
this before, that if you actually provide a generous prescription drug 
plan under Medicare, where 80 percent of the costs are paid for by the 
Federal Government, which is what the Democrats do, because it is 
preventative, you will prevent the hospitalization, the nursing home 
care, the having to go to the doctors.
  We had a couple of our colleagues, the gentleman from Arkansas (Mr. 
Ross) who owns a pharmacy company and the gentleman from Arkansas (Mr. 
Berry) who is a pharmacist, two guys from Arkansas, they pointed out 
that someone will come into their pharmacy like on a Monday or a 
Tuesday morning and ask for a certain drug that has been prescribed by 
their doctor and be told, Okay. Well, that is $350. The person says, I 
can't afford it, walks out of the pharmacy; and because the town is so 
small where they are in Arkansas, they actually see that person in the 
hospital at the end of the week running up a bill for Medicare that is 
10, $20,000. It makes no sense. We need to basically reform Medicare 
and include a prescription drug benefit, not put it outside Medicare, 
because we will save money if we do it. It is such a simple thing to 
explain to our Republican colleagues; and they just reject it because 
they do not like Medicare, and they certainly do not want any impact on 
pricing.
  Mr. LYNCH. I think you raise a great point. I think that there is 
also a sad reality. I just met with about 50 senior citizens in my 
district who are actually boarding a bus to go to Canada. There was a 
woman, Mrs. Morgan, who had just fought off her second bout with breast 
cancer and had been prescribed Tamoxifen, which if she bought it at her 
local CVS in my district, in and around the neighborhoods of Boston, it 
would have cost her about $1,500 per year. She was going to Canada to 
buy in one visit a year supply of that Tamoxifen for $155.
  There has got to be a better way. Even under the veterans plan, there 
are hard-nosed negotiations going on between the VA on behalf of 
veterans and the drug companies; and the drug companies while they are 
not happy with the negotiations as hard-nosed, they are making a 
profit. They are making a reasonable profit, however; and it allows the 
research to continue, it allows drug companies to continue to pursue 
what we will, I think, in a very short while see as really miraculous 
developments in terms of prescription drugs for many very debilitating 
diseases. We need to keep that initiative forward. But we also defeat 
our purpose if we pass a drug prescription program that seniors cannot 
afford, which is the great risk if the Republican plan prevails.
  I thank the gentleman from New Jersey for his kindness in allowing me 
to participate this evening.
  Mr. PALLONE. I want to thank the gentleman. I appreciate his remarks. 
I yield to my colleague from Texas who has been here so many times in 
the evening, oftentimes late at night, to make the point about how 
important it is that we have a prescription drug benefit that actually 
means something for senior citizens.
  Ms. JACKSON-LEE of Texas. I thank the distinguished gentlemen, first 
of all, as I listened to my colleague from Massachusetts for 
articulating so well what the obstacles and the crisis that we are in 
and what we face in this debate this coming week. I was in another 
meeting and I was called indicating that you were having this 
discussion on the floor, and I thought of several points and as I came 
in you were making some points that I would like to briefly pursue 
because in my heart, this hurts me.
  I want this benefit so much for our seniors. I do not want to seem as 
if I am exaggerating. I really want us to bring closure in a positive 
way to this issue because it has gone on for so long. I believe that so 
many of us have been in our districts so closely involved with our 
seniors who really have a personal crisis as relates to their 
medication. There are a multitude of examples of seniors having to 
leave the country. It is one thing to have to leave the State, but 
having to leave the country in order to secure the drugs that they need 
in order to live. Can I say that again? In order to secure the drugs 
that they need to live. That is what we are talking about.
  What I am concerned about is that there are those of us who believe 
that there is value to the pharmaceutical research that is done in this 
country, and I know the distinguished gentleman from New Jersey who 
sits on

[[Page 11175]]

the Committee on Energy and Commerce also recognizes that we must have 
that kind of scientific research, pharmaceutical research, drug 
research, new drug research. No one is discounting that.
  One of the arguments being made by our friends in the pharmaceutical 
industry is that you are cutting our profit and we cannot do any more, 
if you will, far-reaching drug research to be creative in new drugs. I 
want to respond to that, because there are answers to that point. First 
of all, I think we should be concerned about senior citizens. I heard 
my colleague from Connecticut last week call them the Greatest 
Generation. But they have lived longer because of Medicare starting in 
1965, in the mid-sixties.
  We now can provide a crowning touch to that because what we are 
seeing is that the life expectancy diminishes when they are not able to 
get the drugs as prescribed by their physician. The key element that I 
think is important about this particular provision of the Democrats is 
that our provisions are not voluntary. It goes through the Medicare 
trust fund. It provides 80 percent in Medicare coverage. It means that 
every senior who needs it will have a definitive benefit which they can 
utilize. And it will eliminate confusion and whether or not they have 
to make choices.
  This does not discriminate as far as I am concerned against our 
pharmaceutical companies. Why? Because they will have to use those 
drugs. And as was made very clear, and I think the gentleman from New 
Jersey made this point and I am convinced that he is right, that since 
this will be similar to part A and B or these provisions that come 
under Medicare, we will have the ability to see the maintenance 
decrease the cost of hospitalization that you do under A and B. And 
that in fact as they secure the drugs prescribed by their physicians, 
do the pharmaceutical companies not see a decided increase in 
utilization, because they will then be able to use the drugs 
prescribed.
  My good friend knows that there is some rumoring and fear about 
generic drugs. There are some prescriptions, quite a number of them, 
that cannot be substituted by generic drugs. The physician wants the 
patient to take that particular drug. We know that. I know from my own 
parent, my own mom, that she takes drugs that are particularly 
prescribed by a particular drug company, a name brand, if you will. 
Look at the increase that will come with the ability to purchase and 
purchase the quantity that you need and at the same time provide good 
care for these seniors. Do our friends in the pharmaceutical industry 
not see the benefit and the profit for allowing the Democratic plan 
that has the higher percentage of value to go forward? And, by the way, 
providing, if you will, the same kind of compensation to providers, the 
hospitals and physicians, I think that should be noted, in the 
Democratic substitute, but providing that benefit that is not mandatory 
but it is part of the Medicare program which then gives them the 
automatic right and the automatic compensation, if you will, or income 
to be able to purchase those drugs. That is what I think is a point of 
contention that really should be enlightened upon, because I have 
always wanted us to come to the floor of the House with a bipartisan 
proposal that really works.
  It saddens me that we are now at a point where we are about to vote 
on this and we are voting politically. We are voting simply to make 
some group happy over here that needs to be happy and that is our 
pharmaceutical friends who believe they cannot be happy with this plan 
that provides the 80 percent coverage. I disagree with them. I wish 
they would look closely at this plan because I cannot imagine when you 
increase the population of purchasers how that does not increase the 
profit margin if we have to talk about that. I only talk about that 
because I do believe that the research of new drugs is important. None 
of us want to deny that or diminish that, but we have got to be 
realistic about the needs of our senior citizens. I do not believe a 
voluntary program, which I was willing to look at, by the way, I need 
to be very frank with the distinguished gentleman, wanted to look at it 
because I wanted something to work. I would almost say that how do you 
mesh them and make them work together? But the key is a voluntary 
program is less able to provide the benefit than a program that is 
under Medicare and provided by Medicare and funded by Medicare.
  And for those naysayers about the cost, all we have to do is put a 
moratorium or repeal the enormous tax cut that has really sent us into 
the deficit, if you will, that we are in. I would much rather invest in 
this particular plan because this plan has growth. It provides a 
lifesaving component to senior citizens benefits for Medicare. You 
cannot have health care and maintenance by physicians and they are not 
able to take the prescribed drugs that they are given. This is a key 
element. I hope that my colleagues will join us and vote almost in 
unanimous manner on the substitute that I believe offers to all of us a 
real chance to make a difference on prescription drug benefits.
  Mr. PALLONE. I want to thank the gentlewoman not only for what you 
said tonight but for being here so many nights as we try to literally 
pressure the Republicans to bring up a prescription drug plan and have 
it debated on the floor. You expressed with me how disappointed we are 
if this actually does happen this week and they bring up a proposal, 
that the proposal is such a sham that will not actually do anything to 
help senior citizens.
  I wanted to yield to the gentleman from Arkansas, but I just wanted 
to say one point about what the gentlewoman from Texas said about the 
drug research and the increased utilization, because that was so 
important. We hear the pharmaceuticals saying, well, we need money for 
research, and you cannot reduce our profit. But I had said before, it 
is incredible to hear them say that because the Federal Government is 
so much involved in rewarding them and making sure that they have 
enough profit.
  First of all, we provide a lot of money for basic research to the 
drug companies through NIH and other Federal programs. Then you talked 
about generics. It is true, of course, that there are many drugs for 
which there is no generic alternative because of the patent 
exclusivity. In other words, if you develop a new drug and you can get 
it patented and we give you an exclusive right to sell that over a 
period of time before a generic can come to market, that is a huge 
amount of money that the Federal Government through its patent policy 
is giving to the drug companies. You cannot have a generic under those 
circumstances.
  Then you think about the fact, and a previous speaker talked about, 
because he is from Massachusetts, the buses going to Canada. We also 
say you cannot import foreign drugs, so we are again through Federal 
policy giving them another windfall because you do not have the option 
of competition with the drugs that would come from Canada or overseas 
in lower prices. Then we give them huge tax breaks for their 
advertising. For them to complain about how they need money for 
research is absurd.
  I totally agree with you as well. I have never understood why they do 
not see bringing in all these seniors, now millions of new people in to 
be able to purchase prescription drugs, would simply increase their 
profits even more because now a lot more people would be buying the 
drugs. Their arguments are specious and make no sense. I just do not 
understand where they are coming from.
  Ms. JACKSON-LEE of Texas. If the gentleman would yield for just one 
sentence on that point. It is such an important point and I end on this 
particular point, that is the incentive and the response that the 
government gives to the pharmaceutical companies. It gives them that 
benefit. That is why you have the patent, in order to protect them for 
a period of years so that there is no generic undercutting of the 
investment that they made to produce the drug. That is why you provide 
that patent and as well, many people disagree with that, but that is 
why we have those kinds of restrictions in terms of importation of 
drugs. Now

[[Page 11176]]

people are, as I said, having to leave the country to save their lives. 
So you would find those same people right here using that Medicare 
benefit, that 80 percent Medicare benefit and buying those drugs that 
they now leave the country to buy. I cannot understand why there is not 
an understanding about that logic, but I hope we will have a coming 
together of the minds and vote on a good bill this week, which would be 
the Democratic substitute.
  Mr. PALLONE. I thank the gentlewoman. I yield to the gentleman from 
Arkansas. We already mentioned your name tonight in the context of 
prevention, the person at the pharmacy that does not get the 
prescription drug and ends up being hospitalized.
  Mr. ROSS. I would like to thank the gentleman from New Jersey and the 
gentlewoman from Texas. It seems like every week we are here on the 
floor of the United States House of Representatives talking about the 
need to truly modernize Medicare to include medicine for our seniors. 
Yet it seems like the majority, the Republicans on the other side of 
the aisle, only continue to give us rhetoric on this issue.
  Let me tell you what I mean by that. Let me preface my remarks for 
those who do not know me in this body. I want to make sure that they 
clearly understand that I am a conservative Democrat. I have crossed 
over and voted with the Republicans when I think they are right. On 
this issue, they are dead wrong; and I believe it is time for some of 
us to stand up for our seniors and say so.

                              {time}  2015

  That is why I am proud to rise tonight in opposition to this prodrug 
manufacturer prescription drug bill and in support of the Democratic 
alternative, which I refer to as the prosenior bill, a bill that will 
truly help our seniors.
  Let me also say that I believe I understand this issue. I understand 
it because my wife is a pharmacist. We together own a small-town family 
pharmacy. I have seen seniors in our small town of Prescott, Arkansas, 
with a population of 3,400 people. In that small town I have seen 
seniors come through our door after they have been to the doctor. 
Medicare paid for their doctor bill, Medicare paid for the tests that 
were run on them, and Medicare will even pay for their hospital stay 
and surgeries, and yet Medicare does not cover their medicine. Too many 
times I have seen seniors leave that pharmacy without any medicine 
because they simply could not afford it.
  Mr. Speaker, we hear a lot of talk about them having to choose 
between their medicine and their rent and their home mortgage and their 
utilities and their food. A lot of seniors in my district are getting 
by from Social Security check to Social Security check; and I 
understand that and I understand it clearly, because that is exactly 
what my 91-year-old grandmother back home in Prescott, Arkansas, does. 
She worked hard all of her life. Did not have a retirement at work. Her 
Social Security check is her only source of income. If you get ill 
later in the month, oftentimes you are not having to choose because you 
have already paid out of your $500 Social Security check for those 
other things: your rent, your utilities, your food. And there is 
nothing left for your medicine.
  Living in a small town, I would see a week or 10 days later so many 
seniors end up in Hope, Arkansas, at the hospital, just 16 miles down 
the road, running up a $10,000 or $20,000 Medicare bill or required to 
have a surgery that could exceed $100,000, or diabetics who have legs 
amputated or require a quarter of a million dollars worth of kidney 
dialysis before they later died, simply because they could not afford 
their medicine or could not afford to take it properly. So I am not 
standing here tonight with a lot of rhetoric; I am standing here 
tonight with real-life stories from our small-town family pharmacy in 
Prescott, Arkansas.
  Mr. Speaker, if we think about it, today's Medicare is designed for 
yesterday's medical care. I have said this before, but I will say it 
again because I think it makes a good point.
  I recently ran into a senior, a woman who is a retired pharmacist in 
Glenwood, Arkansas, who just happened to be a relief pharmacist in my 
hometown when I was a small boy growing up. She said, you know, back in 
those days, which was not that long ago, she said, I would see 
prescriptions rarely exceed $5; and when I did see a prescription that 
exceeded $5, I would go ahead and fill the next one while I built up 
enough courage to go out and tell the patient that their medicine was 
going to cost over $5. Today, it is nothing for a prescription to cost 
$100.
  I think health insurance companies are among the most greedy 
corporations in America. Even they cover the cost of medicine. Why? 
Because they know, as the gentleman talked about earlier tonight, they 
know it holds down the cost of needless doctor visits, the cost of 
needless hospital stays, and the cost of needless surgeries. All we are 
trying to do here is pass a bill that will help our seniors get the 
medicine that they so desperately need.
  So why is the Republican bill a prodrug manufacturer bill? I do not 
know. It is crafted by the drug industry for the drug industry. They 
have been unwilling, the Republicans have been unwilling to work with 
Democrats to develop a bipartisan bill; and I say to my friends on the 
other side of the aisle, it is time that this Congress stop talking 
about this issue and got to work. It is time we united in a bipartisan 
fashion on the need to truly provide our seniors with the medicine they 
need, just as we have united on this war against terrorism.
  Now, the drug manufacturers are going to spend, actually through a 
front group known as United Seniors Association, they are going to 
spend $3 million on an ad campaign trying to convince seniors that this 
Republican plan is good. Again, I have crossed that aisle and voted 
with the Republicans many times; and when they are right, I will vote 
with them. I am a conservative Democrat from south Arkansas, but I can 
tell my colleagues this: on this issue, I understand this issue, and on 
this issue they are dead wrong.
  Mr. Speaker, this is a quote from the Washington Post: ``A senior 
House GOP leadership aid said yesterday that Republicans are working 
hard behind the scenes on behalf of PhRMA,'' that is the drug 
manufacturers, ``to make sure that the party's prescription drug plan 
for the elderly suits drug companies. Republicans favor a private 
sector solution to lowering drug costs, one that requires seniors to 
buy insurance for drugs from companies or through a managed care plan. 
Democrats want the benefit, drug benefit to be a part of Medicare, a 
change companies fear could drive down profits,'' Washington Post, June 
18, 2002.
  In the midst of the Republicans marking up this so-called 
prescription drug plan for our seniors, first they had this crazy idea 
of coming up with a discount card like it was some new concept. They 
have been around for years. Seniors who have bought them know there is 
no real meaningful discounts to a discount card.
  When we created Medicare, thank God we did not say, here is a 
discount card, go cut a deal for your doctor visit or surgery. This 
should not be complicated. It is time for us to simply go into the 
pharmacy and get the medicine that our seniors need, just like going to 
the doctor and going to the hospital.
  In the midst of the Republicans marking up, writing this prodrug 
manufacturer bill, they did take a break. They took a break long 
enough, and I am quoting here, and this is from The Washington Post, 
June 19: ``Pharmaceutical companies are among 21 donors paying a 
quarter of a million dollars each for red carpet treatment at tonight's 
GOP fundraising gala 2 days after Republicans unveiled a prescription 
drug plan the industry is backing, according to GOP officials.'' Again, 
Washington Post, June 19, 2002.
  I get angry when I look at statistics that tell me that PhRMA, the 
drug manufacturers, have over 600 lobbyists on Capitol Hill promoting 
their interests. Let me tell my colleagues what makes me angry about 
that. Pharmaceutical company profits are nearly four times the average 
of other Fortune 500 companies. The annual profit

[[Page 11177]]

of the top 14 pharmaceutical companies is $38 billion, with a B, and 
the drug industries' effective tax rate is half that of other major 
industries. I could go on and on, but I will not.
  But let me say this. The next time we see one of those slick ads on 
TV trying to tell us which drug we need to tell our doctor you need, 
have my colleagues ever thought about that? The next time my colleagues 
see one of those ads, remember this: many drug manufacturers spend more 
money day in and day out, year after year, on those slick TV ads trying 
to sell their product than they do on research and development of drugs 
that can save lives and help all of us to live healthier lifestyles.
  Please, do not be confused by this ad campaign they are putting up 
trying to pass this prodrug manufacturer Republican bill. It is H.R. 
4954. It is nothing more than a Band-Aid, at best.
  Our plan, the Democratic plan, the seniors' plan truly gives our 
seniors the ability to go to the doctor, to go to the hospital and, 
yes, to be able to go to the pharmacy and get the medicine that they so 
desperately need. We treat the prescription benefit just like going to 
the doctor and going to the hospital. No gimmicks, no tricks. It is 
that simple.
  Mr. Speaker, I am glad to yield to the gentleman from New Jersey (Mr. 
Pallone).
  Mr. PALLONE. Mr. Speaker, I want to yield to the gentleman from 
Washington who has been out front on this issue for so long as well. 
But I just wanted to comment, I was so glad the gentleman brought up 
the statement, or the quotes, if you will, from The Washington Post 
about this big dinner that the Republicans had the night of the 
prescription drug markup in the Committee on Commerce. We actually had 
to break at 5 o'clock so that they could go to the dinner.
  I have people come up to me and say, Congressman, no one thinks that 
anybody who is elected to this House has evil intentions. I mean, 
whether they be Republican or Democrat, they are not elected here, and 
they do not come here because they want to be evil. I really believe 
that strongly. I am sure all of my colleagues believe that.
  So my constituents will say, well, why is it that the Republicans do 
not want to put the prescription drug benefit under Medicare if 
Medicare is such a good program, and why is it that they do not want to 
reduce prices, because that will save the Federal Government money? The 
answer is the special interest prescription drug industry. That is 
where we have the Republican aid very much saying that.
  They do not want this to be a Medicare benefit. They want to give it 
to private insurance companies, because the drug companies are afraid 
that if it is a Medicare benefit and guaranteed to anyone that somehow 
they are going to lose money or not make as much profit. And they do 
not want to reduce costs for the same reason. So what is happening is 
that the Federal Government cannot save money and the seniors cannot 
save money because the drug companies have to make a bigger profit. I 
do not even believe it is true, because I think that if we have this 
program of Medicare and if we have 30 or 40 million seniors getting it, 
that the drug companies will make even more money. So I do not even buy 
that.
  But they are convinced that they are going to make less money, so 
they put pressure on the Republicans to say, do not put this under 
Medicare, do not reduce prices, do not have any pricing mechanism in 
it. There is no other explanation for it because it does not make 
sense. People are not doing things because they want to be bad and hurt 
people; they are just doing it because they are getting the money from 
the special interests.
  Mr. ROSS. Mr. Speaker, if the gentleman will yield, if the gentleman 
recalls, he and I were here on the floor while they were out at the 
fundraiser with the big drug manufacturers talking about this very 
issue.
  Let me say that those on the other side of the aisle, the 
Republicans, I am convinced, I know a lot of them, and I am convinced 
that they love this country just as much as I do. It is not about that. 
I think it is about being misinformed.
  Mr. Speaker, when seniors cannot afford a quarter of a million-dollar 
contribution to get into an event, it makes it difficult for them to 
get their side of the story heard. So I challenge, I welcome, I 
encourage my colleagues on the other side of the aisle to call seniors 
in their district, to call their hometown family pharmacies and talk to 
the pharmacist. They understand these issues, and they know they are 
going to take a hit as a result of Medicare setting the price on 
something they now set the price for. They are okay with that, as long 
as the drug manufacturers share that hit. Do not forget, when one goes 
into a pharmacy, every dollar we spend, 84 cents, is a direct result of 
the drug manufacturer; 84 cents out of every dollar, a direct result of 
the drug manufacturers.
  I just think they are misinformed. I think they are well-intentioned. 
I think they are good folks; they love this country like we do. This 
just happens to be an issue that they do not understand. Seniors cannot 
afford a quarter of a million-dollar ticket to get into a fundraiser in 
the middle of writing a bill. So I would ask them to put politics 
aside, get on the phone and call seniors, call your hometown family 
pharmacist. Ask them what they think about the Republican bill and the 
Democratic bill, again, the drug manufacturer bill versus the seniors' 
bill that will truly modernize Medicare for our seniors.
  Mr. PALLONE. Mr. Speaker, I thank the gentleman from Arkansas, and I 
appreciate the fact that the gentleman from Washington is here, and I 
apologize. I think there is about 7 minutes left, and I know that is 
not a lot of time, and I yield to the gentleman.
  Mr. McDERMOTT. Mr. Speaker, I appreciate the gentleman yielding to 
me. I think that this is an issue where the question that if I were 
sitting out there, I listen to all of these people tear this Republican 
plan apart and ask themselves, why in the world are the Republicans 
putting forward something that has so many defects in it? I think the 
truth really is that Newt Gingrich was quite honest when he said once, 
we expect Medicare to wither on the vine. They never liked the senior 
health care plan we have in this country paid for through the 
government. They have always thought it ought to be done by the private 
sector. They have thought that for 38 years.
  Now, the reason they have this prescription drug benefit out here is 
like the old story about the Trojan horse. They came up to the gates of 
Troy with this horse and everybody inside said, oh, what a beautiful 
horse. People said, well, the Greeks have brought it over here. It is a 
gift. So the people from Troy said, well, okay, open the gates and we 
will bring it in. They brought the horse in and lo and behold, it was 
hollow and filled with Greek soldiers who took over and captured and 
destroyed Troy.
  Now, that is what this whole issue of pharmaceuticals is about. The 
Republicans want to destroy Medicare as we have always known it and 
make it under the private insurance industry. What they have done in 
this bill is to set up two bureaucracies. Right now we have one 
bureaucracy; it used to be called HCFA, the Health Care Financing 
Administration. They changed that, they call it CMS now, whatever that 
is; and they have that over there for the fee-for-services. Then they 
created something called the Management Benefit Administration over 
here, and they put all of the HMOs under that; and they put the drug 
benefit under that.

                              {time}  2030

  They separate the two and they give these two agencies the 
responsibility of managing competing ways of delivering health care, 
but it is not fair. They did not level the playing field. They said to 
these people over on the private side that they can hire anybody they 
want at any amount they want to pay them, but over here in the public 
side they have to use the civil service rules, so this will allow these 
people to take the best people away, and the whole idea is to set up 
this competing private sector delivery of health care.

[[Page 11178]]

  I sat on the Medicare Commission for a year, and the whole time they 
were trying to set up a private health care system. In those days, they 
called it a voucher. What they were going to do was give everybody 
$5,400 and send them out to find a health care plan, and then we would 
not need this public program. We would just dole out the checks at the 
beginning of every year to the old people, and they would go out into 
the private sector and look for an insurance company that would give 
them their health insurance for $5,400.
  We said that will not work because there are people who are sick and 
people who are healthy. Some people will get a good program, some will 
get a terrible program, and what we want is a program for all senior 
citizens that give all an opportunity to have good benefits. And they 
said, no, let us just give them the money, and we will give them 
choice.
  This is that magic word they throw around, ``choice.'' My mother is 
92, and I do not know but there are probably a few members of Congress 
who have got an older parent. When one is 92 years old, they are not 
much interested in choice. They just want something they can count on 
that they know will be there.
  But Republicans are determined. From Gingrich, for the last 10 years, 
well, longer than that, 35 years, they have been trying to push us into 
the private sector because they know how to manage things so well and 
they are so kind and loving and they take care of us so well. Over the 
last 3 or 4 years, we have tried to get people to go into managed care. 
People went into managed care. What happens to them? They close down 
the program. We have had millions of people lose their benefits in this 
country.
  So now it is not bad enough with HMOs. Let us do this to drugs. Let 
us put the folks into the private sector and let them start out and get 
a benefit and have it closed down, and then they will have to look 
around for somebody else. They will not have a benefit because it will 
not be a guaranteed Medicare benefit. It is a voucher. They are going 
to give a voucher to people and tell them to find a drug company that 
will take care of them. And the American people are not stupid. They 
can see a Trojan horse for what it is. These people have been after 
destroying Medicare for 35 years, and they are doing it today.
  My view is that, if we allow that to happen, we will have given away 
one of the most important programs in this country for economic 
security. Most senior citizens feel comfortable knowing that they do 
not have to go to their kids for health care benefits, they do not have 
to go to their kids and beg to them and say please buy my medication.
  My mother lives on a small Social Security pension. That is all she 
has. She has got three boys and one girl. We will help her. But the 
Republicans will not even count as paying for the drugs in their 
program what the kids put into it. My mother has to pay it all out of 
her checkbook. So we have got to go through some shenanigans. We will 
slip the money to my mother and say, Mother, put this in your bank 
account and then you go pay for your medications instead of just our 
paying for it straight. We have to play games to protect our own 
parents. That is wrong.

                          ____________________