Directing the Removal of United States Armed Forces From Hostilities in the Republic of Yemen That Have Not Been Authorized By Congress--Veto
Floor Speech
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Mr. GRASSLEY. Mr. President, for 1 minute, I will speak to a piece of history of the Senate.
I call to the Senate's attention this fact: When the Senate first convened in 1789 at Federal Hall in New York City, one of the Senate's first orders of business was to appoint a committee to recommend a candidate for Chaplain. On April 25, 1789, the Senate elected the Right Reverend Samuel Provost, Episcopal bishop of New York, as its first Chaplain.
That means 230 years ago this week, the Senate elected its first Chaplain, and since then the Senate has had 62 people serve in the position as Chaplain of the Senate.
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Mr. GRASSLEY. Mr. President, additionally for 1 minute, I would like to speak to the issue of healthcare. Some elected officials are proposing radical changes to our healthcare system. These proposals include Medicare for All, Medicare buy-in, Medicaid for All, and expansion of the Affordable Healthcare Act. All of these are versions of completely government-run healthcare.
Americans don't support a government-run healthcare system when they are told about the tradeoffs. Medicare for All would eliminate private health insurance companies. Medicare for All would require middle-class Americans to pay much more in taxes. Medicare for All would threaten the benefits that current Medicare beneficiaries receive, and those people who have paid into the system for a lifetime should not have Medicare, which has been part of the social fabric of America, put in jeopardy by loading more people into it.
Government-run healthcare is a slogan, not an answer.
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Mr. GRASSLEY. Mr. President, I want to call my colleagues' attention to an issue that has affected many families in Iowa and throughout the country, and that issue is the cost of prescription drugs. The cost of prescription drugs is an issue that comes up at almost every Q and A I hold with Iowans at my annual 99-county meetings. During the last Easter break, which was just completed, I did 20 of those 99 counties.
In the last 2 months, I started a bipartisan investigation with my colleague, Ranking Member Wyden of the Finance Committee, into the pricing of insulin. That investigation extends to insulin manufacturers and pharmacy benefit managers. We need to find out how manufacturers price their insulin products, and we need to find out if pharmacy benefit managers are negotiating the lowest drug price possible from manufacturers on behalf of insurance plans.
This isn't my first drug pricing investigation. In recent years, I have investigated Gilead's pricing of hepatitis C drugs. The names of those drugs are Sovaldi and Harvoni. I have been investigating Mylan's EpiPen price increase.
Let me tell you, oversight by Congress in doing our constitutional job does accomplish things. I have said it before and I will say it again because you can't say it too often: Congress has a constitutional responsibility to engage in robust and aggressive oversight of the Federal Government and its programs.
My EpiPen investigation is a perfect example. Several years ago, I began to receive letters, phone calls, and emails from my constituents about the rapidly increasing, high price of the EpiPen. In 2007, a pack of two EpiPens cost $100. By 2016, it had skyrocketed to over $600. Of course, anybody paying it or even anybody hearing about it knows that to be a substantial price increase. I wanted to find out what was happening and what could be done to fix this problem of dramatically increasing prices and maybe unwarranted prices.
My investigative and policy focus soon turned to the Medicaid Drug Rebate Program administered by the Centers for Medicare & Medicaid Services. The Medicaid Drug Rebate Program is a contributing factor that has played a part in how much money the government and the taxpayers pay for some drugs, and, as you will find out, the waste of some taxpayers' money.
Now, as a condition for participating in the program, drug companies have to pay a rebate to the Federal Government and the States for the drugs they offer. Generally speaking, the rebate dollar amount is contingent on whether the drug is considered a brand name drug or generic drug. A brand name drug pays a rebate of the greater of 23.1 percent of the average manufacturer price or the difference between that and the drug's best price.
In the rebate program, the dollar amount is raised if the average manufacturer price has increased faster than the rate of inflation. A generic drug's rebate is 13 percent of the average manufacturer's price.
Unfortunately, the rebate program has not worked as it was designed to work. Drug companies have been able to game the system by paying smaller rebates than they are supposed to, and, of course, the taxpayer foots the bill.
EpiPen is a perfect example of this gaming of the system. This is how the scheme works. Mylan classified the EpiPen as a generic under the Medicaid Drug Rebate Program rather than as a brand name drug. After I asked those at CMS about that classification, they told me the EpiPen should not have been classified as a generic. Of course, because of this incorrect classification, Mylan only had to pay a 13-percent rebate instead of the 23.1-percent rebate. That means less money was returned by the company to the Federal taxpayers and to the States' taxpayers.
According to CMS, from 2011 to 2015, total Medicaid spending on the EpiPen was $960 million. After rebates, net Medicaid spending was still approximately $797 million. As opposed to Medicaid spending, Medicare spending on the EpiPen in those same years was $335 million. Taxpayers and the States' taxpayers were also on the hook for these exorbitant overpayments for the better part of 10 years.
When I saw what was happening, I asked the Health and Human Services' inspector general to look into these practices. Based on data already on file, the inspector general was able to calculate the potential lost rebate value dating back to 2006. The inspector general found that the taxpayers may have overpaid for the EpiPen by as much as $1.27 billion over a 10-year period of time because of the incorrect classification. Eventually, Mylan settled a False Claims Act case with the Obama administration's Justice Department for $465 million. Now, that $465 million is a far cry from how much Mylan got from the taxpayers while it was pulling off this charade--in other words, $800 million less.
Upon learning of the settlement, I expressed my extreme disappointment to the Justice Department. It just didn't seem that the taxpayers had been made whole. Obviously, they had not been. According to Attorney General Miller of my State of Iowa, my home State received $1.5 million from the settlement. However, after my having made repeated requests to justify how much that amount has made Iowa whole, I have not received an answer yet. So, not only did Mylan's steep price hike for one of the most widely needed drugs in this country hit families hard, but it also hit the taxpayers' bottom line. We shouldn't have to depend on lawyers and lawsuits to get the taxpayers' money back. Government Agencies should be responsibly overseeing any program that they are in charge of.
During the course of my investigation, it became clear that CMS didn't believe that it had the legal authority to require drug companies to reclassify drugs and impose civil monetary penalties for incorrectly classifying drugs. Except for a few emails sent from CMS to Mylan's representatives that questioned EpiPen's classification, for years CMS did nothing. In other words, CMS was not doing its job, and Mylan was taking advantage of it.
The inspector general has also stated that he lacked the legal authority to affirmatively pursue penalties for the submission of inaccurate drug classification data. As a result, Mylan was able to escape accountability for a long time, which cost taxpayers billions of dollars. This is just one case. Other drug manufacturers are gaming the system as well.
In a December 2017 report, the inspector general found that 885 drugs may have been potentially misclassified. Specifically, the inspector general found that from 2012 to 2016, Medicaid may have lost $1.3 billion in rebates for just 10 potentially misclassified drugs with the highest total of reimbursement. It is clear that the law needed to change to provide much needed clarity on who had what authorities and in order to hold the government, as well as the private sector, accountable.
As a result of the findings in my EpiPen investigation, I, along with my colleague Senator Wyden, drafted--and Congress later passed--the Right Rebate Act. That all happened just a short period of time ago. The act, which passed with strong bipartisan support, fixes the problems that I identified through my investigation.
It closes the loophole that has allowed pharmaceutical manufacturers to misclassify their drugs and overcharge the taxpayers by billions of dollars.
The bill provides the HHS Secretary the authority to require drug manufacturers to reclassify their drugs and impose civil monetary penalties when drugs are knowingly misclassified.
It provides HHS with additional authorities to monitor drug manufacturers that participate in the Medicaid Drug Rebate Program, and the legislation provides the States the ability to recover incorrect rebate amounts.
Finally, the bill imposes reporting and transparency requirements on HHS. An example of additional reporting requires the Secretary to submit a report to Congress on an annual basis that describes four things: one, the covered drugs that have been misclassified; two, the steps that have been taken to reclassify the drugs; three, the actions the Secretary has taken to ensure the payment of any rebate amounts which were unpaid; four, an accounting of how funds have been used for the oversight and enforcement of this new law.
All of these fixes and updates are now in place because my constituents contacted me about the real-world problems they were paying for and that were affecting their health as well as their wallets. I instructed my oversight staff to investigate the problem. They acquired the evidence, uncovered the facts, and, obviously, exposed the holes in the existing law. Then, I instructed my policy staff to take those findings to plug the holes and solve the problem with new legislation, which is now law. This is exactly the purpose of oversight. This is exactly how oversight is done.
Pretty simply, this isn't like reinventing the wheel every time. This is oversight 101. Oversight means to bring transparency, and transparency is meant to bring accountability. Oversight works, plain and simple, and the Right Rebate Act that Senator Wyden and I brought to passage is proof that oversight is working.
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