[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[Senate]
[Pages 6808-6809]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           PRESCRIPTION DRUGS

  Mr. GRASSLEY. Mr. President, as chairman of the Senate Finance 
Committee that had jurisdiction over the prescription drug bill for 
seniors, and as one of those who worked on the final product as a 
member of the conference committee, as one who is very happy we have 
this piece of legislation passed, as one, after having 36 town meetings 
in my State since the first of the year, who has come to the conclusion 
that seniors are beginning to look at this program and see it as 
something very beneficial to them, I wish to take a few minutes to 
respond to the exchange that was recently put on by the Senator from 
Michigan and the Senator from Illinois--not to address the enlarged 
picture they just talked about but to address some misconceptions that 
can come from parts of their statements.
  I would start, first, with the issue of the provision in the bill 
that deals with the Federal Government not negotiating the price of 
drugs. That was put in there for a very specific purpose. That specific 
purpose was, we know what the situation is with the Veterans' 
Administration negotiating drug prices. Yes, prices are lower for drugs 
because they are doing that, but we have found that the Veterans' 
Administration will not pay for every particular drug that a doctor 
might want to prescribe.
  I had this brought home to me very clearly in my Des Moines town 
meeting, where the first question I had was from a constituent who was 
mad because her doctor prescribed a drug for which the VA was not going 
to pay. We do not want the Government bureaucrat in the medicine 
cabinet of the senior citizens of America. We do not want the 
Government bureaucrat coming between the doctor and the patient. We see 
that in the VA program.
  What we have done in the legislation is to build upon a 40-year 
practice of the Federal Government, and all health care, but 
particularly for prescription drugs for Federal employees, through the 
Federal Employees Health Benefits Plan. We do not pretend to duplicate 
that plan, but there is some good experience of those plans negotiating 
with drug companies to bring down the price of drugs. So we do not have 
to have the Federal Government negotiating drugs. In fact, as I said, 
we specifically do not want it negotiating it. We do not want the 
bureaucrat in your medicine cabinet because we have plans that have 
been set up in this bill to negotiate with drug companies to bring down 
the price of drugs, exactly the same way the plans for the Federal 
employees bring down the price of drugs. They are very well thought out 
and a very good practice, but, most importantly, we do not want to 
duplicate the shortcomings of the Veterans' Administration program.
  The second point I would give further explanation to is the exchange 
that went on belittling the AARP for backing this legislation. I 
compliment the AARP because we would not have a bill without the AARP 
backing this legislation, because the AARP had the capability of 
helping us get a bipartisan coalition. Without them, we would not have 
had a bipartisan coalition, and you do not get anything done in the 
Senate that is not done in a bipartisan way.
  Now, what is odd about Democrats finding fault with the AARP backing 
this bipartisan bill is that the year before, in 2002, the AARP was 
backing Senator Kennedy's bill. So it seems to me that for Democrats 
the AARP is OK if they are backing a Democrat bill, but if they want to 
back a bipartisan bill, it is a sin for the AARP to do such a thing.
  The AARP is looking at individual pieces of legislation, looking out 
for the greater good of their members, and helping get a product as 
opposed to, presumably, people on the other side of the aisle who want 
an issue rather than a product. So I think the AARP has done very well. 
I compliment them for doing that. We would not have a bill without 
them.
  What Democrats have to get over is that the senior citizens of 
America are not Democrat property. They are individual Americans, and 
they ought to be seen as individual Americans, and they and their 
organizations not be denigrated because the Democrats think they have a 
grip on all seniors of America; they do not. But that is the resentment 
toward the AARP.
  Another issue I want to explain is the impression that we have given 
the bureaucracy 2 years to institute the permanent program for the 
reason that we wanted to get way beyond the next election. It was said 
that maybe the first Medicare Program, in 1965, was implemented in 8 
months. I was told it was a little over a year. So, to me, 2 years--38 
years later--to do the first major improvement to Medicare in 38 years, 
to do it right--and it was not the President who decided it would take 
2 years, as was indicated. Way back when we were dealing with the 
tripartisan bill, in the year 2002, I and my staff asked the 
bureaucracy: We want this done right. How much time should we give you 
to implement it? These nonpolitical people, being honest with us, said 
about 2 years. So we gave 2 years for the implementation of it. It had 
nothing to do with the President of the United States. It had nothing 
to do with the upcoming election. It is just our desire that if you are 
going to implement the first improvement in Medicare in 38 years, you 
ought to do it right. It was not our judgment of how much time it takes 
but a nonpolitical judgment of how much time it takes. That is what we 
were told, and that is what we did.
  We do not wait for 2 years for this program to kick in. We have the 
temporary program that starts June 1, the discount card, and the 
subsidy for low-income people to get $600 this year and $600 next year 
to help them buy drugs while we are waiting to get the permanent 
program in place. Congress made that decision to take 2 years, not the 
President of the United States.
  Now, there was also, throughout this discussion we heard, all sorts 
of insinuations that somehow this is a bill to benefit pharmaceuticals. 
Well, let me tell you, if the pharmaceutical companies had their way, 
there would not be any bill. But they knew there was going to be a 
bill. The drug companies that patent prescription drugs do not want 
generics out there. A very major provision of this bill to bring down 
the cost of drugs is that provision that does away with the legal 
subterfuge by which drug companies extend the life of their patent by 
making arrangements today with generic companies to keep their drug off 
the market, and they pay them to do it, so that, effectively, the 
patent is extended beyond 17 years. We did away with that. The

[[Page 6809]]

pharmaceutical companies did not want that provision changed but we did 
that.
  Another impression that is misleading has to do with the true cost of 
this bill. We hear the Congressional Budget Office says it is $395 
billion. Then a month or two later the Center for Medicare Services 
says it is $535 billion.
  Mr. President, is my time up?
  The PRESIDING OFFICER. The Senator has used 10 minutes.
  Mr. GRASSLEY. Would the Senator from Minnesota allow me to have 2 
more minutes?
  The PRESIDING OFFICER. I think the Senator had 15 minutes in his 
original request, so he has 5 more minutes.
  Mr. GRASSLEY. I thank the Chair.
  The bottom line is, we have these accusations about what the true 
costs are. So I want to respond to those accusations we have heard that 
the ``true costs'' of the Medicare bill were somewhat hidden from 
Congress before the final vote. This is simply political, election year 
hyperbole. The opponents of the drug benefit are making this claim 
because the final cost estimate from the CMS Office of the Actuary was 
not completed before the vote took place.
  Let me be very clear. The cost estimate was not withheld from 
Congress because there wasn't a final cost estimate from CMS to 
withhold. Their cost estimate wasn't even completed until after 
December 23, long after the House and Senate vote.
  Let me also be clear we did have the official cost estimate on the 
Medicare bill before the vote, and that is the one from the 
Congressional Budget Office. As I have said, as both Senators from 
Minnesota know, the Congressional Budget Office is God when it comes to 
Congress having to go by a figure of what something costs. It doesn't 
matter what the Treasury Department says, OMB, or even CMS. The 
Congressional Budget Office is what we go by. If you don't go by it, 
you are subject to a point of order. That point of order takes an 
extraordinary majority to overcome.
  No government official should ever be muzzled for providing critical 
information to Congress. If that happened last year, that was wrong. 
These accusations about whether information was withheld have raised 
questions as to whether Congress had access to a valid and thorough 
cost estimate for the prescription drug bill before the final vote. It 
should also be made clear that while the cost analysis by the Office of 
Actuary is perhaps helpful, it is not the cost analysis Congress relies 
upon but that of the Congressional Budget Office, as I have already 
said. It is their cost estimate we use to determine whether legislation 
is within authorized budget limits.
  For Congress, if there is a true cost estimate, it is by the 
Congressional Budget Office. The Congressional Budget Office cost 
estimate is the only one that matters. When Congress approved a $400 
billion reserve fund to create a Medicare prescription drug benefit, 
this meant $400 billion, according to the Congressional Budget Office, 
not according to the Center for Medicare Services.
  With all due respect to the dedicated staff working at the Center for 
Medicare Services Office of the Actuary, their cost estimates were 
irrelevant to the process. The Congressional Budget Office worked 
closely with the conferees to the prescription drug bill and the staff 
to ensure a full analysis of the projected costs was complete. The 
conferees and staff regularly and constantly consulted with the CBO 
throughout the development of the Senate bill and in preparation of the 
conference agreement. The Congressional Budget Office worked nearly 
around the clock and on weekends for months to complete an extremely 
thorough and rigorous cost analysis of the prescription drug bill. That 
cost estimate, the official cost estimate, was available to every 
Member of Congress before the measure was presented to the House or 
Senate for a vote.
  It is also pretty disingenuous for the opponents of the Medicare 
bill--on the other side of the aisle, especially--to suggest the price 
tag for the Medicare bill causes them concern. The fact is, they 
supported proposals that cost hundreds of billions more than what we 
ended up passing last year. The House Democratic proposal last year 
would have cost nearly $1 trillion, and the Senate Democratic proposal 
in 2002 cost $200 billion more than the bill that was enacted into law.
  Further, there were more than 50 amendments offered on the floor of 
the Senate during the debate on the Senate bill that would have 
increased the cost of the bill by tens of billions of dollars.
  The bottom line is, there should be no doubt in anyone's mind we had 
a true cost estimate for the prescription drug bill last year, and 
everyone had access to it before the vote.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.

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