[Congressional Record (Bound Edition), Volume 149 (2003), Part 13]
[House]
[Pages 17430-17436]
[From the U.S. Government Publishing Office, www.gpo.gov]




              A MEDICARE PRESCRIPTION DRUG PLAN IS NEEDED

  The SPEAKER pro tempore (Mr. Gerlach). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from New Jersey (Mr. Pallone) 
is recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I do not expect to use all the time unless 
I am joined by some of my Democratic colleagues, but the purpose of my 
being here this evening is to talk about the need for a Medicare 
prescription drug plan; and as my colleagues know, just before the 
break, before the July 4 break, we did here in the House pass a 
Republican Medicare prescription drug proposal and another bill was 
passed in the other body that was sponsored by the Republican 
leadership, and I just wanted to say as emphatically as I could this 
evening that I believe very strongly that neither of these proposals, 
which would now go to conference, that neither of these proposals 
accomplish the goal of providing America's seniors with a prescription 
drug benefit that is worth having.
  I say that because I think it has to be understood that the effort to 
provide a prescription drug benefit is basically an effort to, in my 
opinion, or at least it has been sold as such by the President and the 
Republican leadership, as an effort to try to get almost all seniors 
involved on a voluntary basis in a prescription drug program that they 
would see as meaningful, that covers most of their drug expenses, and 
if we look at the bills that were passed by the Republican leadership 
in both Houses of Congress, they do not do that.
  Essentially what happens is that seniors have to pay out more in 
terms of premiums than they would get for the most part. If we have a 
voluntary program that most seniors do not sign up for, which is I 
believe strongly what would happen if either of these proposals became 
law, then we would not end up with the universality that is necessary 
for an insurance program like Medicare where, in the case of the 
existing Medicare program that pays for your hospital bills and your 
doctor bills, 99 percent of seniors sign up. If 10 or 15 percent of the 
seniors sign up for the proposal that has been passed in either House, 
effectively the program would be a failure because most seniors would 
not join. You would not have an insurance pool that actually went 
across the board and covered all seniors, and I am very fearful that 
that is what would result from either the bill that was passed here in 
the House, proposed by the Republican leadership, or the bill that was 
proposed by the Republican leadership in the other body.
  I see that I have been joined by one of my colleagues, and I just 
wanted to say before we get into a little dialogue hopefully among the 
Democrats that the Democrats proposed in the House a substitute bill 
which most Democrats supported and a few Republicans, I believe, that 
basically would be along the lines of the existing Medicare program and 
would be the opposite in the sense that I believe 99 percent of seniors 
would sign up for the program because it is generous enough to provide 
prescription drug coverage that most seniors would want to take 
advantage of.
  Essentially what we did in our Democratic alternative to the 
Republican bill was to model the program on the existing Medicare 
program. Under the existing Medicare program part A, seniors' hospital 
bills are paid for. Under the existing Medicare program part B, 
seniors' doctors' bills are paid for, and if I could use that as a 
model because that is essentially what the Democrats used as a model.
  Under part B, right now you pay a certain amount which I think is 
maybe $45 a month premium. You have a $100 deductible so when if you go 
in January and your doctor bill is a little over $100, that first $100 
is not paid for. That is the deductible, but after that, 80 percent of 
your costs are paid for by the Federal Government, and you have a 
copayment of 20 percent for your doctor bills.
  It makes sense to go that route because most seniors, 99 percent, 
realize that part B is worth having. So they pay the $45 a month, and 
they get 80 percent of their costs after the $100 deductible paid for 
by the Federal Government, and it is a good bargain. You are paying so 
much a month, but you are getting a lot back in terms of value.
  So we as Democrats said, well, let us do the same thing. This has 
been a very successful program, part B; 99 percent of the seniors sign 
up for it. This has been a very successful program when it comes to 
paying the hospital bills or your doctor bills. Let us follow the same 
example with regard to prescription drugs, and our Democratic 
alternative, or substitute, said that seniors would pay $25 a month 
premium. They would have a $100 deductible, just like part B; and 80 
percent of the cost of their prescription drugs would be paid for. 
There would be a 20 percent copay, up to $2,000. Once a senior expends 
$2,000 out of pocket for the copay, then 100 percent of the costs are 
paid for by the Federal Government.
  I do not understand why this is so difficult to comprehend and why 
the Republican leadership or the President cannot simply go along with 
this. It is modeled after a very successful Medicare program. Seniors 
will quickly understand that it is a good benefit. They will sign up 
for it. I guarantee 99 percent of the seniors, if not close to 100 
percent, would sign up for this type of a program and take advantage of 
it.
  Instead, the Republicans say now we cannot do that for various 
reasons. We can get into that if my colleagues like; but they say, oh, 
no, no, we cannot do that. They come up with a very complicated, 
confusing, in my opinion, way of trying to administer a prescription 
drug benefit that relies on private plans that for the most part says 
that you have to join an HMO or some kind of managed care program to 
get any kind of drug benefit, which means that you lose your choice of 
doctors and possibly your choice of hospitals. They do not provide, as 
I said before, any kind of meaningful benefit even with the 
privatization and the fact that you are forced into an HMO.
  I just wanted to give an example of why I think that these two, both 
the House version and the Senate Republican version, are unworkable and 
just briefly.
  This is the Senate bill which some people feel is better, but I do 
not really

[[Page 17431]]

think is. It is maybe slightly better than the House bill, but not 
anything that anybody would sign up for.
  Under the Senate bill, a beneficiary would pay $420 a year in 
premiums, would have a $475 deductible, and after the deductible is 
met, a beneficiary in Medicare would share the costs. In other words, 
50 percent of your drug bills would be paid for by the Federal 
Government, 50 percent you pay out of pocket, up to $4,500 in total 
drug expenses, and then there is what we call a doughnut hole. If your 
drug bills are from $4,500 to $5,800, you pay 100 percent of the costs, 
and then after that, over $5,800 you pay 10 percent.
  Now, when I say seniors will not want this, keep in mind what you are 
talking about here. You are talking about a premium that you have to 
pay per month. You have not a $100 deductible, but a $275 deductible; 
but then only 50 percent of your costs are paid for by the Federal 
Government. You have to pay the other 50 percent and there is this 
doughnut hole at some point where the Federal Government does not pay 
anything. Why in the world would you sign up for it?
  I talked to my seniors during the July 4 break. I met a lot of them. 
I asked a lot of them the question, would you sign up for that. Most of 
them said no. The only way you would sign up is if your drug bills were 
so expensive and you had enough money to not only pay the premium but 
also to pay the 50 percent copay; and most seniors, unless they are in 
certain financial circumstances and they have a huge drug bill expense, 
they would not do it.
  The House bill is even worse. Under the House bill, there is $420 in 
premium, $250 deductible; and after the deductible is met, the 
beneficiary in Medicare would share drug costs 80/20, like I said with 
the Democratic bill, 80 percent paid for by the Federal Government, but 
only up to $2,000 in total drug expenses. After that, from $2,000 to 
$4,000 or to $4,900, the senior pays 100 percent of the costs. Again, 
why in the world would you sign up for such a thing?
  Essentially, if you look at the situation in the House version, the 
majority of seniors fall into the doughnut hole, and most seniors under 
the House or the Senate bill would end up paying more out of pocket 
than they would benefit from the Federal Government.
  So what we have been saying, Democrats, is the Republicans are 
essentially involved in a sham here. The President says, oh, okay, we 
are going to provide prescription drug benefits. The House Republicans 
and the Senate Republicans say we are going to do it, but the benefit 
is not worth what you pay out. You have to join private plans for the 
most part, which means an HMO, and you lose your doctor. You might even 
lose your choice of hospital. Why in the world would you sign up for 
it?
  If you do not adopt the type of program like the Democratic 
substitute, which is modeled after the existing Medicare program, the 
bottom line is you do not have a program that has any meaning to 
seniors, and I am just afraid we have this huge hoax that is being 
played upon us by the Republican leadership and the President. If 
something actually comes out of the conference and is signed into law, 
people are not going to know they are getting something that is 
meaningless. They will not even find out till 2006 what it really means 
because it does not go into effect for another 3 years; and in the 
meantime, I guess the President and the Republicans can go around and 
say we have done something for prescription drugs, but they really 
would not have done anything at all.
  I see my colleagues are here; and I would like to yield, first of 
all, to the gentleman from Washington who is a physician and member of 
the Committee on Ways and Means and has been a leader on this issue, 
and I have to say to my friend that I know he has been active for 
universal health care, and we do not have a majority in this House to 
pass a universal health care, but I support it because I really believe 
that ultimately we have to have a health care program that does not 
just deal with drugs but deals with all health care and that everyone 
can take advantage of. So I admire his work, and I would like to yield 
to the gentleman.
  Mr. McDERMOTT. Mr. Speaker, I want to commend the gentleman for 
having this, staying up here at 10 o'clock at night, talking about this 
issue because I think the people need to understand the idea of 
universal health care is that everybody puts into the pot, and then 
when they get sick, they take out of the pot. Nobody, when they pay for 
their health insurance, stands around saying, gee, I hope I get sick so 
I can take something out of the pot. That is not the way people think.
  We have given universal health care to senior citizens. We have said 
anybody over 65 in this country is eligible for Medicare, and we put 
them all in together; and they put all their money in together 
collectively, and we put together a Medicare program that has worked 
very well since 1964. It has not required people's children to pay for 
anything. They have been able to have their own dignity. They had their 
own card. They paid for their own health care during all that period.
  I sat on the Medicare commission. I was one of the 16 people sitting 
on that commission for a year back in the mid-1990s, and there is a 
determined effort by the Republicans to privatize Medicare.
  What does privatize mean? It means to separate all the American 
people from one another and make them deal individually with this 
particular problem in their life, their health care.

                              {time}  2200

  They would be given a voucher, and they could privately go out to a 
private insurance company and find somebody who would give them a 
benefit.
  Now, if we were to take my mother and myself, my mother is 93 and I 
am 65, if we were to take those two people and say, send them out with 
the same amount of money, we know that they are going to get different 
benefits. Well, they have tried this. They have offered the Medicare 
through an HMO, and people went and joined, and then the HMO closed, 
and they lost all the benefits. And people have been jerked around over 
the last 4 or 5 years by this whole process, but they are determined. 
And this bill is the real final effort to do that.
  It is kind of like when I was a little kid. My mother wanted me to 
take cod liver oil. There were some vitamins in it, and she wanted me 
to have those. But cod liver oil tastes terrible, so she would always 
mix it with orange juice. That is exactly what they are doing here. 
They want people to take the cod liver oil of privatizing health care, 
and they are filling the glass with orange juice, which is the drug 
benefit.
  So that is the first thing people have to understand. The drug 
benefit is not intended to give them a drug benefit, it is to get them 
to drink the cod liver oil, the privatization of Medicare.
  Now, how did they design this? Why do I say they do not intend to 
give a drug benefit? Very simple. They said, well, let us put up $400 
billion. Now, that sounds like a lot of money to people. I mean, it 
sounds like a lot to me. But if we are going to fix the problem right, 
to do the deal right, it is going to take way more than that, probably 
twice that amount. But they just said, well, we will put $400 million 
in, and we will kind of mix it around so people will not see what we 
are really doing.
  Worst of all, as my colleague pointed out, this does not go into 
effect until 2006. They can put advertisements on television in the 
next campaign in 2004, or in 2006 they can put advertisements out and 
say, we gave you a drug benefit, because it will not go into effect 
until 2006. Now, most Americans look at politicians and they say, I do 
not know if I can trust them or not, and I want to see what actually 
happens. Well, when you put something out there so far, the people will 
never know that what they see advertised in the 2004 campaign, with all 
these millions of dollars of ads from the drug companies and from the 
Members of Congress who voted for this, that, in fact, it was never 
intended to work.
  Now, I will tell you why I know that. I was walking through the 
tunnel between the Capitol and one of the office buildings today, and 
one of the Republican Members said to me, do you think this bill is 
ever going to come out of the conference committee? Do you

[[Page 17432]]

think the Senate and the House will ever solve it and bring a bill back 
to the floor? I said, no. He said, I do not think so either, and we 
hope it does not. This was a Republican talking. We hope it does not. I 
said, you do? He said, well, it is not a good plan. It does not solve 
the problem.
  So they know it does not solve the problem, but they want to say, I 
voted for a pharmaceutical benefit, and my opponent opposed it. Or my 
opponent does not think it is good, but I wanted to give 
pharmaceuticals to senior citizens. They have no interest in the 
reality of this bill.
  Now, I think there is a couple of things that are really sort of 
buried in this bill that people have to understand. They said we do not 
want the Secretary of Health and Human Services to negotiate for all 
the 40 million old people in this country. We want each little 
insurance company to negotiate with the drug companies as best they 
can. Every other country in the world that has an industrialized 
country like us, France, Germany, Canada, anybody, the government 
negotiates for everybody. My colleagues know that that works better.
  If I were to go into a store and say, I want to buy 100 loaves of 
bread, I will get a better price. It is going to be less per loaf than 
it would if I were to buy one loaf at a time. But the Republicans set 
this up so that Tommy Thompson, the Secretary of Health and Human 
Services, cannot go and negotiate for them. They made it impossible to 
save money, or save big money.
  We know what happens in the Veterans' Administration, we get a 50 
percent discount because they negotiate a price for every veteran. All 
5 million of them get the benefit of a negotiated price for 5 million 
people. But when it comes to seniors, we say, no, no, you are on your 
own, Grandma. You can go 1 at a time or 2 at a time or 10 at a time, or 
whatever, but you cannot have the benefit of this. I think that alone 
should make people sort of wonder about this.
  The second thing they do is that they say, well, you can go into a 
Medicare HMO, some kind of health maintenance organization, and get 
your benefits, if they will take you; or you can stay in regular 
Medicare with your doctor that you have known for the last 30 years and 
knows everything that has ever happened to you, so that when you go in 
the doctor does not have to say, well, let us start with when you were 
6 years old; when did you have the mumps; when did you have the 
measles?
  You know, when you get to be 65, or like my mom, 93, who remembers 
what year it was that you had the measles? You want a doctor that knows 
you and that you have dealt with for 30 or 40 years, so that they say, 
well, Mrs. McDermott, how is X, or whatever the problem is that they 
have been following. Seniors do not want to have to start over again 
with a new physician.
  But they say if you stay in Medicare, you are going to have to pay 
more for the drugs. Now, the problem with that is that drives up the 
premium. Right now the premium for seniors is something under $60. 
HCFA, the Health Care Financing Administration, that administration 
says that the premiums next year, if this bill goes into effect, would 
go up to $90 a month for nothing. It would just go up $90. Why? Because 
the sick people would stay in Medicare, the old standard Medicare, and 
the healthy ones would go get into these HMOs where they could get a 
better deal. So sick people who want to stay with their doctor are 
going to be stuck paying more money than people who are younger and 
healthier and are acceptable into some kind of an HMO.
  I believe, and what the gentleman is saying, is that it should be a 
Medicare benefit that everybody gets in the whole United States. It 
does not make any difference whether you live in Ohio or New Jersey or 
Washington or Atlanta, Georgia, or wherever, you ought to get the same 
benefit. It should not be dependent on whether you can find an HMO that 
negotiates better or anything else.
  For instance, maybe a parent would like to move from Tennessee, where 
they had a pretty good deal, to Montana where their kids are living. 
They want to move to Montana because they want to be near the 
grandkids. That is what my parents did. My parents left Oklahoma in 
1972 to live with us in Washington State when my dad retired and there 
were grandkids. My mother said, hey, we are going out to be near the 
grandkids. Well, why should there be any difference in the benefit 
between Oklahoma and Washington State?
  This bill will guarantee that there is a difference. It may be 
better, it may be worse. My parents would not have anything to say. 
Anybody who moves under this new system will have no idea what they are 
going to.
  And then there is this question of a donut hole. Frankly, the bill 
mystifies me in that it seems to imply that the Republicans think that 
old people are not paying attention; that somehow we are going to 
whistle this past them, and they will not see what this is about. My 
colleague explained it. First of all, the Democratic plan is the only 
one that says what the premium will be, $25 a month, and there is a 
$100 deductible. They spell it out in the law. The Republicans do not 
give us that. They say there will be a premium, and there will be a 
deductible, but people are buying a pig in a poke right off the bat. 
Then you pay for that, and, at a certain point, you do not get any 
benefits. You are still getting your monthly bill for your premiums. 
You have to keep paying those premiums. Meanwhile every bit of drugs 
you pay for you have to pay all out of your pocket.
  Now, I tried to explain this at a couple of retirement homes in 
Seattle, and people just say, that does not make any sense. What are 
they trying to do? What is this about? The minute you explain to people 
what this really does, it falls apart flat. And yet they are coming in 
here, pressing this bill and talking about all the things they have 
done. But people should remember that it is not passed until it goes 
into effect. And there, I think, is going to be a very big fight 
between the Senate and the House on this issue because the Senate does 
not want to privatize health care. They are resisting the idea of 
putting the orange juice with the cod liver oil. They said, no cod 
liver oil. This is orange juice.
  They are doing a drug benefit over there, and in some ways that makes 
it a little better. It is not as generous maybe as ours is, but neither 
one of them works very well. The only bill that really works is the one 
the House Democrats put out which gives people a fixed payment and a 
fixed deductible and a fixed amount that they have to pay 'til 
whenever.
  And nobody wants this benefit. This idea that you are going to get an 
insurance company running in to offer an insurance policy to all the 
seniors, just ask yourself, and you do not have to be a rocket 
scientist to know why this will not work, who buys an insurance policy? 
You do not buy an insurance policy unless you have a car, right? You do 
not buy fire insurance if you do not own a home. Why would you buy 
this, paying month after month for a drug benefit, if you did not need 
any drugs? As soon as you need them, boy, you want to run in right away 
and get it. But why would seniors, if they had something else or they 
were tight with money, they would say, why should I buy it?
  So the only people who are going to buy are people who have big drug 
bills. Maybe they have cancer and their cancer treatments are very 
expensive, or maybe they have had a kidney transplant and they have 
drugs that are very expensive. There are a whole raft of conditions 
which require people to spend an awful lot on pharmaceuticals. Those 
are the people who are going to buy it. So an insurance company is 
sitting there saying to themselves, no way.
  The way insurance companies work is you sell a premium to everybody, 
and then you hope nobody gets sick so you can give all the money that 
is left to your stockholders. That is how they work. It is no mystery, 
and it is not wrong. It is the way they operate. Well, why would you 
want to take in a bunch of sick people who want drugs and give them a 
drug benefit?
  Well, the government, these guys recognize that. They realize the 
insurance

[[Page 17433]]

industry will not do it. So what they said was, I know what, we will 
let them offer the plan, and then we will take 99 percent of the risk. 
The Congress will take it. And if there is any profit to be made, the 
insurance company can take it out the door.
  This is absolutely a fraud for the government to use all of its money 
and not try and control it, not look for the fraud and the waste and 
the abuse; turn it over to the insurance company, who has no risk. 
None. There is no explanation for why they would come up with a plan 
like this except that they hope it does not pass.
  And I hope it does not pass. I would like a real bill to pass, 
because God knows people are really having trouble, and there are so 
many things we could do that would not be hard to do.
  I see my colleague has brought some things here about the Canadian 
plan, and I will just say one or two more things and then turn it over 
to her.
  The Canadian Government did not go through any big plan or anything, 
they just passed a law that said that the price you pay in Canada is 
going to be the average of the G-7 countries. Now, the G-7 countries 
are the seven most vibrant economies in the world, Japan, Germany, 
France, Great Britain, the United States, and so forth. So whatever the 
price is in Germany, they write that down, write down the price in 
France, add them all together and divide by seven, and that is the 
price in Canada. They never pay above the median. They always pay in 
the middle.
  Now, that is why people leave my State on buses on a weekly basis to 
go up to Canada. Anybody who lives near the Canadian border knows about 
this. Or they have pharmacies up there, and they mail in up there, and 
they have it all worked out so they can get them filled and have them 
sent back. What the pharmaceutical companies are doing now, just to 
show you how much they hate that, they have cut off the amount of drugs 
going to these pharmacies in British Columbia, which is north of 
Washington State.

                              {time}  2215

  Mr. Speaker, they say to them you could not possibly sell this many 
drugs in British Columbia, so we are only going to give you 40 percent 
of your order so they cannot ship the other 60 percent down to the 
United States. They are cutting off their supply. It is incredible the 
lengths to which the pharmaceutical industry will go.
  In closing, in case Members would like to shed a tear for 
pharmaceutical companies, the Fortune 500, which is the 500 biggest 
companies in the United States, 10 of those companies are 
pharmaceutical companies. Those 10 companies last year had a profit of 
$38 billion. That was 50 percent of all 500 companies. Ten companies 
produced 50 percent of the profit of the whole of the Fortune 500.
  Now, I believe in research, and I believe in all of the things that 
pharmaceutical companies do, and I am not against pharmaceutical 
companies; but I think enough is enough. I think my colleague who has 
some Canadian prices here will make a very interesting case on this 
point.
  Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Ohio (Ms. 
Kaptur), who has been a leader on this issue.
  Ms. KAPTUR. Mr. Speaker, I thank the gentleman for organizing this 
Special Order tonight, and certainly the people of New Jersey have sent 
the right Member here to fight this great fight. It is a privilege to 
stand here also with the gentleman from Washington (Mr. McDermott), who 
is such a critical member of our Committee on Ways and Means and knows 
more about this probably than any other Member of the House, and has 
fought so hard to maintain the Medicare program that our Democratic 
forebears created, and we proudly stand on their shoulders. To stand 
here with both you gentlemen tonight is truly an honor.
  I wanted to mention, as the gentleman from Washington (Mr. McDermott) 
said, the pharmaceutical companies around this Nation are making 
unbelievable profits off the pocketbooks of our senior citizens and 
their families, and to also mention that the reason we have such a 
terrible bill before us in the House and why we were denied the 
opportunity to offer a Democratic alternative, we were not even given a 
chance to debate our alternative, is because these very same 
pharmaceutical companies helped elect the people who have created this 
bill for the Congress.
  And an organization like PhRMA gave 95 percent of its political 
contributions last year to one political party, the party that 
prevailed by one vote here in this House 2 weeks ago in getting this 
very flawed bill before us. Now, the Republican Party has produced a 
bill that is really a trick on the senior citizens of this country. It 
is a trick because of the language they use in the title that does not 
bear out real substance on the inside. Let me give a couple examples 
just to refine what my colleagues have talked about tonight.
  I think the gentleman from New Jersey (Mr. Pallone) talked about the 
Democratic bill, which we were not allowed to offer, had a maximum 
premium per month for our seniors of $25. The Republican bill that 
passed starts out at $35 a month, but it does not have a cap so we 
really do not know what that monthly premium is going to be.
  The Democratic plan is a defined benefit plan. You know exactly what 
it costs, and you know exactly what you get from it. The Republican 
plan is what we call a defined contribution plan. You only get so much, 
and then you do not know how much more you are going to have to pay. It 
is very unpredictable.
  In the Democratic plan, which we were not allowed to offer, and 
imagine, a measure that affects over 40 million Americans and we were 
not even allowed to offer our alternative. I say to the majority, what 
are they afraid of? The deductible under the Democratic plan is $100 
for seniors. Under the Republican plan, it is $250. Under the 
Democratic plan after you have paid your $2,000, if you reach that 
level which we call a catastrophic level, then you do not pay anything 
after that. We pick up the costs, the people of the United States 
through the premiums. Under the Republican plan, they make seniors pay 
an additional $1,500 beyond the $2,000 cap that we have in our bill, 
which means that it is going to cost seniors much more money under that 
plan.
  So you pay a higher monthly cost, and we are not really sure how high 
that will go under the Republican plan. You pay a higher deductible. 
You have to pay costs over $2,000, up to $3,500, and the reference that 
the gentleman from Washington (Mr. McDermott) made to the fact that the 
Democratic bill provided for negotiated pricing for different drugs, 
the Republican plan prohibits us from negotiating the best price like 
we do already for the Department of Veterans Affairs and for the 
Department of Defense.
  This is just a chart of some of the drugs that people buy. Norvasc, 
seniors in my district are very familiar with Norvasc which is used for 
high blood pressure. The general price at a drugstore is $182.99. The 
Canadian price is $152.82. Through our negotiated pricing through the 
Department of Veterans Affairs, we have gotten a price of $102.11. We 
wanted to get the same kind of negotiated pricing in the bill that was 
debated 2 weeks ago. We were not allowed to even offer the amendment.
  I went up to the Committee on Rules, which met after midnight so 
nobody in America could really see what was going on, and we had to 
wait until 4:30 in the morning only to be denied the opportunity to 
offer this best-price amendment. We were trying to get not just 
Canadian prices, but even better prices on many of these drugs based on 
negotiated pricing. Our amendment was not even allowed to be offered.
  So the Republican plan is really a tricky plan, and you have to read 
the fine print. The differences are very striking.
  Let us say you live in a part of the country that has no plans. Let 
us say these private insurers who do not seem to be flocking to provide 
regular coverage under Medicare, if a plan does not exist in your part 
of the country, under the Democratic plan there is a fall-back 
government prescription drug plan that you can opt for. It requires

[[Page 17434]]

that in the bill so no part of America would remain uncovered. The 
Republican bill does not provide that kind of fall-back where two 
private drug plans might fail to emerge, and we know they probably will 
fail to emerge.
  I was home over the weekend talking to seniors, and one woman said, I 
belong to an existing HMO in this community for prescription drugs, but 
right now my coverage stops at $600. I cannot get anything beyond that. 
If my drugs cost more than $600, I have to pay that. So the current 
plans that exist are very, very inadequate.
  I wanted to just take a moment to give, again, very specific 
information about the difference between the Democratic bill that we 
were not allowed to offer and the Republican bill which passed here by 
one vote in the middle of the night as they twisted arms, and we could 
see it happening right down that aisle.
  If a senior's yearly drug costs are $1,500 for prescription drugs, 
their out-of-pocket expenses under the Democratic plan would be $680. 
Their out-of-pocket costs under the Republican plan would be $920, 
which means that seniors whose drug costs are up to $1,500 a year would 
pay $240 more a year under the Republican plan.
  If a senior's yearly drug costs are $3,000 a year, their out-of-
pocket expenses under the Democratic plan would be $980, but their out-
of-pocket costs under the Republican plan would be $2,020. So the 
Republican plan costs seniors $1,040 more if their drug expenses go up 
to $3,000. What if their drugs cost $4,500 a year? Under the Democratic 
plan, their out-of-pocket costs would be $1,280; but under the 
Republican plan, their out-of-pocket costs would be $3,520. So the 
Republican plan costs seniors $4,500 more if their drug costs go up to 
$4,500 a year. So the sicker they get, the more it costs them under the 
Republican plan.
  I must say, I have a lot of seniors in my district and they do not 
earn more than $8,000 under Social Security. The Republican plan is an 
unaffordable plan. What if you are so sick that your drug costs are 
over $12,000? Under the Democratic plan, your out-of-pocket costs would 
be $2,300. Under the Republican plan, your costs would be $3,920. So 
the Republican plan would cost seniors in that case $1,620 more a year.
  So under the Democratic bill, as I have explained here, we tried to 
provide for negotiated pricing to match the Canadian prices and even 
better them in some instances. We were not allowed the opportunity to 
offer our amendment, and that is a major cost-saving amendment because 
it would use the power of group buying which every housewife in America 
knows about. Anybody who does shopping knows if you buy 12 cans of 
something, it is less expensive per unit than if you buy one. We are 
trying to do the same for 40 million people across this country. 
Imagine the savings involved, and the premium costs are less and 
guaranteed under the Democratic plan. Under the Republican plan, they 
start at $35 and raise it. The deductible is more affordable under the 
Democratic plan; under the Republican plan, it is more expensive.
  If I can just perhaps summarize why the Republican plan might be so 
bad and why it really is a trick on our seniors, it is because 
fundamentally the Republican Party has never supported Social Security 
and Medicare. Back when Social Security was first created by this 
Congress long before I was born, and we go back to the Committee on 
Ways and Means votes, there were no Republican votes to create Social 
Security back in the 1930s when you go into the record of what happened 
back in that Committee on Ways and Means room.
  When it got to the floor, enough people were embarrassed that they 
voted for it. Some did, not all. But back in committee where the real 
decisions are made, there was not a single Republican vote in the 
committee for Social Security.
  On Medicare, when President Johnson fought for the creation of 
Medicare, and I was a young girl then, Senator Bob Dole said in 1995, 
``I was there fighting the fight, voting against Medicare in 1965 
because we knew it would not work.''
  Well, for several generations of senior citizens, indeed, it has 
worked. It has helped keep American families from going to the poor 
house and going bankrupt; and it has given American seniors a level of 
security they never knew before in American history. To me, Social 
Security and Medicare are the aorta of the Democratic Party of which I 
am proud to be a member.
  I look at some of the other quotes that have come from contemporary 
Republicans. One of the Members from the other body in charge of 
Republican policy said back in May as this debate got underway, 
``Congress should gradually end the traditional Medicare program as an 
option for new beneficiaries in the future, leaving them to choose from 
a variety of private plans. I believe the standard benefit, the 
traditional Medicare program has to be phased out.'' This was in The 
New York Times, May 21, 2003.
  In this body, the chairman of the Committee on Ways and Means, the 
gentleman from California (Mr. Thomas), according to MSNBC stated, ``To 
those who would say that our bill would end Medicare as we know it, our 
answer is we certainly hope so. Old-fashioned Medicare isn't very 
good.'' He said that June 25, 2003.
  I would just like to say to the gentleman from California and to the 
gentleman from the other body, for our family and for 114,000 Ohioans 
in my district and for over 1.5 million Ohioans around our Buckeye 
State, we believe Medicare should be here to stay. We are here to 
strengthen it, not to weaken it; and we do not want to trick our 
seniors. We want to provide them with a guaranteed, affordable benefit 
that is voluntary if they wish to participate in something that is 
available to all.
  It is a great pleasure to be here this evening to put on the record 
the truth and the actual costs of both plans and to say to the 
gentleman from New Jersey (Mr. Pallone) thank you so very much for 
allowing me to join you this evening and to say I was somewhat offended 
this week when we came back here and our colleagues yesterday passed a 
measure in this House to give Members of Congress better prescription 
drug coverage than we are willing to give every single senior citizen 
that is out there.

                              {time}  2230

  Members of Congress make over $150,000 a year. Some do not accept all 
of that. A lot of people donate some of that to charitable causes. But 
what is interesting is that the Republican majority in this House snuck 
through a bill here yesterday that would actually ask senior citizens 
to pay 100 percent of their drug costs, between $2,000 and $3,500 a 
year, but yet they did not apply that same measure to themselves the 
other night. They are going to take that cost away from themselves. It 
is really a tragedy. Why should Members of Congress exempt themselves 
from the same regimen that they are asking of senior citizens across 
this country who do not earn anything like $150,000 a year? It is 
simply wrong.
  I thank the gentleman from New Jersey (Mr. Pallone) for allowing me 
to participate with him this evening and for his continuing leadership 
on this really critical, I call it aorta, issue for our country and our 
party.
  Mr. PALLONE. Mr. Speaker, I thank the gentlewoman from Ohio. I know 
the hour is late, but I just would like to comment on a few facts that 
she mentioned because I think they are so important and also relate to 
what our colleague from Washington said a little earlier.
  First of all, yesterday when the Republicans, I guess it was the 
Republicans who represent a lot of Federal workers, the gentleman from 
Virginia and a couple of others that represent these districts where 
there are a lot of Federal workers, and I suspect what happened is that 
they went home during the break and probably got a lot of complaints 
from the Federal workers in their district that they did not want to 
leave the Federal program that they had as retirees, which has a very 
generous prescription drug benefit, and be transferred into this 
Medicare program that the Republicans are now offering

[[Page 17435]]

in the House and the Senate. So the first thing they did, as the 
gentlewoman said, when they came back on Tuesday was to bring up this 
bill that said that there was no way that any Federal employee, 
including Members of Congress, of course, would be forced into this new 
Medicare program; that they would be allowed to keep their generous 
benefits that they have now.
  I cannot argue with that. I certainly do not want any Federal 
employee, because I have some as well, to lose the benefits that they 
have under the Federal employee plan in order to join what the 
gentlewoman and I both know is this lousy Medicare program that the 
Republicans are putting forth, but it is such hypocrisy. Not only in 
voting for that are Members of Congress protecting themselves, but the 
Republicans are essentially admitting if they have a significant number 
of Federal workers that the proposal they put forward for Medicare 
prescription drugs is a lousy plan, and they want to make sure that the 
Federal workers do not have to join it.
  I can understand that. I mean, I agree. But why do they not admit as 
Republicans that the reason they are proposing this bill is because the 
plan they proposed for all the other seniors stinks essentially? We 
tried to get them to admit that, and of course they would not. They 
just, oh, no. That is a good program. We are proposing a good program 
for all the other seniors, but the Federal workers should not have to 
join it just in case maybe it is not a good program. But I agree with 
the gentlewoman, the hypocrisy of that was just unbelievable.
  And I mentioned one statistic yesterday that I thought was 
interesting. It said the most popular plan among Federal workers is the 
Blue Cross/Blue Shield standard option. And the Congressional Research 
Service estimates that drug benefits under that plan are worth about 50 
percent more than the proposed Republican Medicare drug benefits. So 
there we go. Why would anybody want to give up their drug plan under 
Blue Cross/Blue Shield and have it worth 50 percent less?
  Ms. KAPTUR. Mr. Speaker, would the gentleman yield?
  Mr. PALLONE. I yield to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Speaker, for many of the plans that exist around the 
country today, one of the real threats of the Republican plan is that 
employers who are offering drug plans today would choose to close those 
down and try to put their retired employees in this flawed plan that 
the Republicans have proposed. So it is actually a disincentive for 
private employers to continue offering the kind of coverage that they 
have traditionally. And there are many, many retirees who receive 
prescription drug coverage through their employer, but this plan really 
provides a way for them to cash out those better plans into a lesser 
plan, and we have already seen with the Federal employees that they 
were very worried about that. So Members of Congress very craftily made 
sure that they were covered, but they left seniors in America behind. 
They took care of a few thousand people, including themselves, but then 
they left 40 million Americans behind in the bill that has come out of 
this House.
  Very interesting. That is not really what we are elected to do. We 
are supposed to be here to represent the 280 million Americans who sent 
us here, not to feather-bed here first and take care of our own first 
and ignore everybody else that is out there. But that is literally what 
happened here this week.
  And for the Federal employees we should have a plan for all seniors 
that are as good as what they get, not the reverse.
  Mr. PALLONE. Mr. Speaker, if I could comment on two things that the 
gentlewoman mentioned. Yesterday when we had the debate on the bill 
that would protect Members of Congress and Federal employees, the 
gentleman from Ohio (Mr. Strickland), one of the gentlewoman's 
colleagues, got up and pointed out that when the Senate passed their 
drug prescription drug bill before the break, they actually put in an 
amendment at the initiative, I think, of some Members that said that in 
no circumstances could Members of Congress get a more generous benefit 
than the rest of the seniors. And there was a quote in an article that 
the gentleman from Ohio (Mr. Strickland) brought on the floor where one 
of the Republican Members was saying that he did not have to worry, 
that he voted for that amendment because had he a guarantee that that 
amendment would never survive the conference, and that whatever bill 
came out of conference that we would finally vote on and go to the 
President, if there is such a bill, would not have that provision in 
it. So it was just amazing.
  The other thing the gentlewoman said, too, is that during the break, 
and I brought it with me, but I am not going to look for it now, there 
was an article on the front page of The New York Times that said that 
with regard to the major employers, the major companies that have 
negotiated through unions or whatever or maybe just on their own, have 
given generous prescription drug benefits to their retirees are 
actually now lobbying Congress in this conference committee when it 
starts to make sure that those provisions are still in there, because 
that is exactly what they want to do. A lot of the major corporations 
want to be able to drop the benefits for their retirees because they 
say it costs them too much and push them into the Republican Medicare 
prescription drug plan, which will not provide them with any real 
benefit. So they are actually lobbying now in the next few weeks to 
make sure that that provision is preserved so that they can drop the 
benefits and say, we do not need to provide our retirees with benefits 
because they are going to be under this new Republican Medicare 
prescription drug program.
  Two other things that the gentlewoman mentioned that I thought were 
so important. She talked about how in the Republican bill that passed 
here in the House they have this noninterference clause which the 
gentlewoman was trying to get an amendment to take out, and of course 
it was denied by the Republicans on the Committee on Rules; that the 
language specifically says that the Secretary of Health and Human 
Services, the Medicare Administrator, cannot negotiate price 
reductions, which, as the gentlewoman points out, would save so much.
  The reason that I think that is so significant, first of all, there 
is no question that if we were able to do that, we would probably have 
30 or 40 percent reduction in prices from what we have now. I mean, 
everything I have ever seen shows that. So we say, why are the 
Republicans not doing this? The gentlewoman kind of hinted at it when 
she said they are doing the bidding of the drug companies, and the drug 
companies give them all this money, and so naturally they do not want 
to put it in.
  What the Republicans keep saying is that the reason why they are 
providing a bill that does not have as generous the benefits as what 
our Democratic substitute had was because they have to fit within this 
$400 billion budget. If they come up with this money, they say, we have 
to fit this bill into this $400 billion over a 10-year budget, this pot 
of money that we have; so we cannot do what the Democrats want because 
that would cost a lot more, maybe twice as much, to provide a 
meaningful benefit. But as the gentlewoman pointed out, if we were 
actually able to get rid of that noninterference clause and have the 
Secretary negotiate price reductions like they do with the Veterans 
Administration or with the Department of Defense and the military, we 
would bring the cost down so much that, in my opinion, the Democratic 
bill would not even cost any more because we would be saving the money 
by negotiating the price. But the reason they will not do that is 
because they are in the pockets of the drug companies, and the drug 
companies are never going to go for anything like that.
  The other thing I wanted to say, too, is that we operate, and it is a 
little bureaucratic, under this scoring system that is done by the 
Congressional Budget Office that if they have a bill, they send it to 
CBO, the Congressional Budget Office, and they tell them how much it is 
going to cost. So the Democratic bill is like $800 billion, and the

[[Page 17436]]

Republican bill is like $400 billion. Again, I think if we did what the 
gentlewoman wanted, which is to have the negotiated price reductions, 
we would probably bring the Democratic bill down to close of what the 
cost of the Republican bill is.
  But beyond that I wanted to put out, because I think this is so 
important, and the gentleman from Washington (Mr. McDermott) has 
mentioned in the past, is that having people have access to 
prescription drugs is a preventative measure, and if they can take the 
prescription drugs and do not have to go to the hospital or the nursing 
home or have a serious operation, ultimately the Federal Government and 
the Medicare program are saved so much money that it is incredible. But 
the bureaucrats and the CBO, and I do not mean to attack them because I 
like them, but they do not allow us to take that into consideration.
  So not only could we bring the costs down through negotiated price 
reductions, but I think personally that if we were able to get all 
these people to have access to prescription drugs who did not, the 
Federal Government would save billions in not having to have 
operations, not having people institutionalized, hospitals, nursing 
homes. All that is paid for by the Federal Government.
  Ms. KAPTUR. Mr. Speaker, would the gentleman yield?
  Mr. PALLONE. I yield to the gentlewoman from Ohio.
  Ms. KAPTUR. Mr. Speaker, the gentleman raised such good points on 
that, and I would just show another drug that some seniors buy is 
Prozac, which is used for depression. The U.S. retail price on that is 
about $302.97. It is a very expensive drug. In our country today with 
the Veterans Department and the DOD, Department of Defense, 
negotiating, we can get that down to $186.98. And so we can look at the 
drug saving.
  Here is another one, Prilosec, which is used for heartburn, which 
sells at about $134.99. With negotiation by the Department of Veterans 
Affairs and the Department of Defense, we have gotten that down to 
$63.32. Some of these prices are half. So when we look at what we are 
paying in the private sector, let us say, where they do not have 
negotiated pricing, if we apply that to what would be spent under the 
Medicare Part D that the Democrats have proposed, we would save 
literally billions and billions of dollars.
  And I wanted to say to the gentleman that I intend to place in the 
record tonight the names of these pharmaceutical companies and how much 
money they contributed to political campaigns back in 2002 so that 
people who are listening can take it right from the Congressional 
Record tonight. The source is the Center for Responsive Politics. And 
we will also place in the Record which political parties they gave 
money to. And one can go down the list, and, without question, the vast 
majority of money from the pharmaceutical giants that the gentleman 
from Washington (Mr. McDermott) talked about this evening who make 50 
percent of the profits of the Fortune 500, that is incredible. Was it 
Will Rogers who said we are getting the Government they are paying for? 
And they have paid for plenty here, and they are weighing in heavily. 
Frankly, I have seen some of our colleagues defeated around the country 
because of the ads, the hundreds of thousands of dollars of ads that 
they put on the air. And that is why we cannot get a really good 
prescription drug bill out of this Congress because they got what they 
paid for, and they protected themselves from negotiated pricing in this 
bill.
  Who would imagine that a bill on prescription drugs would prohibit 
the Government of the United States from trying to get the best price 
through group buying?
  Mr. PALLONE. Mr. Speaker, the amazing thing about it, too, is that if 
we listen to what the Republican leadership says and what the President 
says, the reason they say they want to privatize Medicare and privatize 
access to prescription drugs is because they want to create 
competition, and I throw back to them and say why in the world if they 
believe in competition would they want to deny the Secretary the 
ability to negotiate for all these seniors lower prices? Is that not a 
form of competition? Is that not my saying, look, I have got the 
ability here to influence the price because I am going to go out and I 
am going to say if they give it to me for less price, I am going to buy 
it from them, or if they give it to me for an even lesser price, I am 
going to buy it from them? And I have got all these seniors, and 
whoever wants to give me the best price, that is whom I am going to buy 
it from. Is that not competition?
  It seems to me that their ideology on this one is almost like 
Socialist or something because they are saying, we do not want 
competition, we do not want the Secretary to be able to go out and get 
these companies to compete.

                              {time}  2245

  I do not understand it. It is driven by, as you say, the fact they 
are getting all these campaign contributions from the drug companies. 
It is not really an ideological argument anymore, because they are 
denying competition.
  Ms. KAPTUR. Right. If you look at the rest of the world, a country 
like Canada negotiates price. Even parts of our government, the 
Department of Veterans Affairs gets a much better price than other 
seniors pay simply because they do group buying and do negotiated 
pricing with these companies. With the kinds of billions and billions 
of dollars of profit they have, there is a little cushion there for our 
senior citizens.
  I just want to thank the gentleman very much for standing up for the 
Democratic bill that should have been allowed to be offered here on 
this floor and was not. It is a sad day for our seniors.

              2002 Pharmaceutical Contributions, By Party

       Pharmaceutical Research and Manufacturers of America: 
     $3,180,552; Democrats 5%; Republicans 95%.
       Pfizer Inc.: $1,804,522; Democrats 20%; Republicans 80%.
       Bristol-Myers Squibb: $1,590,813; Democrats 16%; 
     Republicans 83%.
       Eli Lilly & Co.: $1,581,531; Democrats 25%; Republicans 
     75%.
       Pharmacia Corp.: $1,480,241; Democrats 22%; Republicans 
     78%.
       GlaxoSmithKline: $1,301,438; Democrats 22%; Republicans 
     78%.
       Wyeth: $1,188,919; Democrats 17%; Republicans 83%.
       Johnson & Johnson: $1,075,371; Democrats 39%; Republicans 
     61%.
       Schering-Plough Corp.: $1,057,978; Democrats 21%; 
     Republicans 79%.
       Aventis: $954,349; Democrats 22%; Republicans 78%.

  Mr. PALLONE. I know we get so enthusiastic about this, that we forget 
about the time.

                          ____________________