[Congressional Record (Bound Edition), Volume 160 (2014), Part 13]
[Senate]
[Pages 18951-18952]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 GENERIC DRUG REPORT AND STUDY REQUEST

  Mr. NELSON. Madam President, today I wish to call attention to a 
report released by the Senate Special Committee on Aging, ``Medicare 
Part D Prescription Drug Benefit: Increasing Use and Access of 
Affordable Prescription Drugs.'' I have long been an advocate in the 
fight for affordable prescription drugs for our seniors--in fact, when 
this body was considering the legislation that created the Medicare 
Part D benefit, I voiced concerns that we did not go far enough to 
ensure that every senior had access to the lifesaving and life-
sustaining treatments they need.
  During the debate in the Senate on the Affordable Care Act, I fought 
to eliminate the so-called Medicare Part D doughnut hole because no 
senior should have their drug coverage disappear when they need it 
most. I believe that closing the prescription drug doughnut hole was 
one of the best things we did in the Affordable Care Act, and in my 
State alone seniors have saved more than $756 million on their drugs 
since the law was passed.
  Over the past 2 years, the Aging Committee has held hearings, drafted 
legislation, solicited multiple reports from the Government 
Accountability Office, GAO, and the Department of Health and Human 
Services Office of the Inspector General, OIG, on selected topics, and 
met with industry and beneficiary stakeholders. I requested a study by 
the GAO on the Part D plan finder tool's accuracy of information on 
plans and drug pricing.
  I chaired a hearing to commemorate the 10th anniversary of the 
creation of Medicare Part D. During that hearing, witnesses raised 
issues of specialty drug costs, coverage denial, and customer service 
issues. As a result, Senator Collins and I introduced the Part D 
Beneficiary Appeals Fairness Act, S. 1365, to give beneficiaries the 
right to appeal for a lower copayment for drugs on the specialty tier, 
the tier on which the most expensive drugs are. I have worked hard with 
my colleagues to rectify issues with the Medicare Part D appeals 
process when I learned that seniors were still having difficulty when 
coverage for needed medications was denied. I also requested a thorough 
review by the OIG into beneficiaries' access to generic drugs in 
Medicare Part D plans, the results of which are in the report submitted 
today, as well as a continued review of the differences in prices for 
drugs in the Medicaid Program as compared with the Medicare Program.
  I will continue to improve the Medicare Part D Program, and that is 
why my colleagues and I issued this committee report to inform the full 
Senate on innovative ways to use the tools within the Part D program to 
better control drug costs for seniors and taxpayers.
  This report is the culmination of 2 years of work by the Senate 
Special Committee on Aging to assess the status of the Part D program 
and recommend improvements.
  One undeniable factor that keeps costs down in the Part D program is 
the use of generic drugs. Competition in the generic drug market 
translates into real savings for both taxpayers and beneficiaries. The 
Congressional Budget Office, CBO, estimated in 2010 that the use of 
generic drugs in the Part D program saved beneficiaries and taxpayers 
approximately $33 billion; approximately 72 percent--$24 billion--of 
those savings accrued to the Medicare program and 28 percent--$9 
billion--went to beneficiaries. CBO estimates that such savings are 
shared by beneficiaries and the Part D program through a combination of 
lower copayments and lower premiums than would have been charged 
otherwise.
  While the proportion of generic drug use has increased over time, 
certain high-cost beneficiary groups continue to miss savings. The 
committee's report finds four areas for improvement that should be 
addressed in order to continue to improve on value-based prescription 
drug use. These include:
  Incentivizing and supporting plan sponsors to not only include 
generic drugs on plan formularies but also to proactively promote the 
maximum use of generic alternatives where appropriate. Currently, most 
plan sponsors offer a full array of generic alternatives, but they are 
not required to do so, leaving a small number of plan formularies that 
do not maximize generic offerings. In addition, there are no mechanisms 
that reward or incentivize plan sponsors that have undertaken 
successful strategies to further increase generics use. Encouraging 
value in Part D plans as much as possible will be increasingly 
important in coming years.
  Finding ways to increase the adoption of generic drugs among 
beneficiaries that receive low income subsidy, LIS, benefits. 
Generally, insurance companies have been successful at encouraging 
enrollees to use generic alternatives when available in part because 
there are large differences in copays between brand and generic drugs. 
However, in the LIS population, these cost differences do not exist; 
their copays are set by statute. Innovative methods to improve use of 
generic drugs in this population, while still ensuring full access for 
this vulnerable population, must be explored.
  Improving education among beneficiaries and health professionals. 
There continues to be a need to educate beneficiaries and health 
professionals on the efficacy of generic medications and incentivizing 
them to substitute brand-name drugs for generic drugs, when 
appropriate.
  Maximizing program integrity efforts at pharmacies. In some 
situations, questionable pharmacy billing practices could thwart 
efforts that have been made to incentivize generics. HHS OIG, GAO, and 
others have identified

[[Page 18952]]

important program controls in the Part D program that could be 
improved.
  While the report deals only with those levers in the Part D program 
that can be adjusted to incentivize the less-costly drug option where 
appropriate, it is undeniable that recent reports indicate certain 
situations where the price of a selected generic drug dramatically 
increases. This trend--and the factors that contribute to this 
disturbing trend--must be better understood. Generics have been 
critical to overall fiscal sustainability of the health care system, 
and we must understand and address volatility that results in 
inexplicable price spikes for patients and taxpayers. I believe this is 
a hugely complex and recent phenomenon but one that must be studied 
further. That is why today, in addition to releasing this important and 
timely report, I intend to request an investigation by the GAO into 
those factors that underlie the recent price increases of certain 
generic drugs.
  It is my hope that these actions, taken together, are efforts that 
both sides can agree to and will inform us on the best way to move 
forward to achieve the maximum drug savings possible and provide 
better, more affordable care for our seniors in coming years.

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