[Congressional Record (Bound Edition), Volume 152 (2006), Part 17]
[Senate]
[Pages 21869-21870]
[From the U.S. Government Publishing Office, www.gpo.gov]




               MEDICARE ENHANCEMENTS FOR NEEDED DRUGS ACT

  Mr. WYDEN. Mr. President, a new public opinion poll shows that 
Americans are particularly concerned about the restriction that keeps 
Medicare from bargaining to hold down the costs of the medicine older 
people purchase.
  In fact, a new poll yesterday indicated 93 percent of the American 
people want this restriction lifted--and for obvious reasons. The fact 
of the matter is, millions of older people simply cannot pay their 
skyrocketing prescription drug bills and they want to know why the 
Government isn't doing more to contain these costs.
  Fortunately, we have been able to make a little bit of headway on 
this issue in the Senate. Senator Snowe and I, in particular, earlier 
this year, got the support of 54 Senators, a majority of the Senate, to 
lift this restriction and take stronger action to hold down the cost of 
medicine.
  Medicare is sort of like the guy going to Costco buying toilet paper 
one roll at a time. The Government is not acting like a smart shopper. 
The Government is not taking practical steps like everyone in 
Tennessee, Oregon, Iowa, or anywhere else, to use bargaining power to 
hold down the cost of this essential for older people, prescription 
drugs.
  We have made a bit of headway. I have been particularly pleased the 
distinguished Senator from Nevada, Mr. Reid, made it clear this would 
be a top priority for the Senate to take up when we begin our work 
early next year.
  Given that and in hopes that the Senate can come together on a 
bipartisan basis--and I believe the approach Senator Snowe and I have 
been taking for the past 3 years can now get over 60 votes in the 
Senate--I take a few minutes tonight to outline a bit as to how it 
would work if this restriction was lifted and Medicare could genuinely 
act to hold down the cost of medicine.
  So let's start with the example of a new drug coming out on the 
market for cancer, and it is an expensive drug. Let's say this drug 
that many seniors will need will cost $100,000. At present, each of the 
plans that offers the prescription drug benefit has to negotiate for 
the few people in each of those plans who might need the new drug.
  If the legislation Senator Snowe and I have been advocating became 
law, the Secretary could negotiate on behalf of all the people in the 
Medicare private plans who need the drug. That way, there would be new 
leverage for older people in the private marketplace to hold down the 
cost of medicine. If you had a small number of people in a private 
plan, say, in Tennessee, and a small number of people in a private plan 
in Oregon, and a small number of people in a private plan in Iowa, the 
Secretary could negotiate on behalf of all of those people in 
Medicare's private plans. That could mean real savings to folks in 
Tennessee and folks in Oregon and folks elsewhere who right now do not 
have a lot of leverage in the private marketplace.
  Now, think about the implications of this proposal. Nobody is talking 
about price controls. Nobody is talking about a one-size-fits-all run-
from-Washington, DC, approach that would freeze innovation.
  I know the distinguished Senator from Tennessee has been particularly 
interested, as I have, in taking approaches that promote innovation in 
the science and biomedical fields. What I have just described, which is 
something that could be done under the approach Senator Snowe and I 
have been advocating, will not freeze research, will not freeze 
innovation, but will make darn sure the senior citizens of this country 
and the taxpayers of this country have a new opportunity to hold down 
the cost of medicine and also protect the wallets of our taxpayers.
  Let me give another example of how this approach can contain the 
costs of medicine. Let's say we have an older person in Portland, OR, 
or Miami or New York. They are in a metropolitan area, and in the 
metropolitan area they may have a choice of major plans because a lot 
of folks are vying to get a part of the ``big city'' market with a lot 
of older people. So let's say one of the seniors is in an HMO, a health 
maintenance organization, or they are in something called a PPO, a 
preferred provider organization, or maybe they are in a drug-only 
private plan. All of those private entities may be looking for ways to 
hold down the costs, but if one of those private plans does not get the 
same deal the other big private buyers get, then one of those plans can 
ask Medicare to step in at that point. In effect, one of those private 
plans that is not getting a fair shake in the marketplace can say to 
Medicare: Hey, look, we are not getting a very good deal when it comes 
to negotiating for our seniors. At that point, Medicare could step in 
and say: We are going to assist in that kind of bargaining process.
  I happen to think just the fact Medicare is in a position to have 
that leverage--if the private marketplace is not willing to bargain 
seriously, is not willing to negotiate seriously--just the fact there 
would be that kind of leverage for Medicare can help to be a force to 
contain the cost of medicine for older people.
  So here again I have cited an example of how you can hold down the 
cost of medicine without price controls, without national formularies 
and approaches that could constrain innovation, just by using plain old 
common sense and bargaining power, the way every business does in North 
Carolina, Tennessee, and across the country.
  Now, finally, it seems to me we ought to be thinking about the fact 
that with many older people, they will have a private retirement 
package as well. So a lot of those seniors are concerned about their 
overall health care bill, knowing they are going to get some

[[Page 21870]]

help from Medicare and some help from a private health package as well. 
But if you hold down the costs of the Medicare plan, then you are going 
to have more money in the pockets of older people as they try to cope 
with their extra out-of-pocket costs.
  So when the Medicare plans save seniors money on medicine, that is 
simply less cost the retiree plan has to make up. Seniors are going to 
be looking at their overall bill, and they want to know that every step 
possible is being taken to hold down their Medicare expenses, as 
Senator Snowe and I have been advocating for the last 3 years, because 
if that is done, there is simply less cost for the retiree plan to make 
up.
  Containing the costs on the Medicare side has the potential to help 
keep costs down for employers insuring their retirees. So if you do 
that, you are also going to provide some relief to the taxpayers of 
this country because included in the original Medicare bill are a lot 
of subsidies designed to help employers keep insuring their retirees so 
a lot of older people do not just get pushed back entirely into 
Medicare when their employers ought to be helping them. By containing 
drug costs through Medicare and containing some of the costs for those 
employers, then the need for taxpayer dollars to shore up those 
employer plans goes down.
  What is the bottom line? We are going to be able to help seniors not 
through a Government cost-containment approach but by empowering those 
who are supposed to advocate for them in the private marketplace. That 
is what 54 Members of the U.S. Senate have voted for. It is a 
comprehensive, market-based, cost-containment approach. It will help 
older people in the marketplace if they are part of a small plan. And 
the Secretary is in a position to negotiate on behalf of all of those 
in those small plans, say, for an expensive cancer drug. It could help 
the older person in a big city where some plans are getting a good deal 
but one senior is not. At that point, the senior wants somebody to make 
sure there is some extra clout in the marketplace.
  Finally, I think what Senator Snowe and I have been advocating over 
these last 3 years will help employers and taxpayers as well. If you 
hold down the costs on the Medicare side, that is going to mean the 
employers--the employers--of this country are not going to have to come 
up with as much money on their side to protect their retirees. 
Containing costs on the Medicare side clearly has the potential to keep 
costs down for employers insuring their retirees.
  So now, as the Senate begins to schedule for early next year and 
Senators look at the variety of issues that are coming up, I hope they 
will look in particular at this concept which has won the support of 93 
percent of the American people. I think most Americans just scratch 
their heads and say: How in the world could the Government say the only 
people in the United States--the only people in the United States--who 
will not bargain to hold down the costs of medicine are those running 
Medicare?
  If you are in North Carolina and you are in the technology sector or 
you are in Oregon in the natural resources sector, the first thing you 
try to do is use your bargaining power and get the most for your 
dollar. You act as a smart shopper. And people have been flabbergasted 
that Medicare is the only ``person'' out there shopping without using 
every bit of clout that would be available to older people in the 
marketplace.
  That is why this evening I wanted to take a few minutes to outline 
specifically how the changes Senator Snowe and I have been advocating 
for the last few years would work. They are common sense. They use the 
marketplace to protect the wallets of senior citizens and our 
taxpayers. I am particularly pleased Senator Reid has indicated this 
would be a high priority. Fifty-four Members of the U.S. Senate have 
already voted for it. I hope next year--as people begin to understand, 
with the examples I have given tonight and others, how this would 
work--my hope is early next year a significant step will be taken 
finally to hold down the costs of the medicines that are essential for 
this country's older population.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Burr). The clerk will call the roll.
  The legislative clerk proceeded to call the roll
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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