Coronavirus
Floor Speech
BREAK IN TRANSCRIPT
Mr. CASSIDY. Mr. President, one thing that is on everybody's mind right now is this: How do we prepare to address the coronavirus? I speak not just as a Senator but, perhaps even more particularly, as a physician who has done public health in my previous practice, working with immunizations, looking at all those issues as to who is vulnerable and who needs to be protected.
There are a couple of things that are quite apparent from what we have already learned from this epidemic. Let me compliment the Chinese. They have come in for some criticism that was well deserved, but in other things they have helped determine a lot of things that will benefit the rest of the world in terms of the natural history of coronavirus.
By the way, the theme of this talk is that we have to make sure that coronavirus medications are going to be available and affordable for senior citizens. Why do I emphasize senior citizens? One thing we have learned from the Chinese is that those who are 50 and above--and 65 and above, in particular--are the ones who are most likely to die from being exposed to and infected with coronavirus. That is our Medicare Part D population. If you have a chronic illness--and chronic illness can be hypertension, high blood pressure--again, you are particularly susceptible. If we know that our Medicare population is most vulnerable, let us focus particularly upon them.
First, science is working. There are at least six vaccines that are being developed to attempt to address the coronavirus. Hopefully, one of them will work. There are other therapies being developed. Some of them are medications. Four different medicines are now being tested to see if they are the ones that absolutely prevent coronavirus. We know whatever drug that is could end up being quite expensive. For the Medicare Part D beneficiary, that leads into this discussion: How do we make sure those drugs are effective?
Let me show you the current situation. This is the Medicare Part D standard benefit parameter under current law. In the orange is that which the beneficiary pays, the Medicare Part D beneficiary. The blue is what the insurance plan pays. The green is what the manufacturer pays. The dark blue is what the taxpayer pays, the Medicare system.
What you see is, initially, beneath the deductible, the Part D beneficiary--the senior citizen on Medicare Part D--pays 100 percent. Then, you go into what is called the initial coverage phase, 25 percent; the coverage gap phase, 25 percent; and then above the catastrophic coverage, the senior citizen pays 5 percent, no matter how much that drug costs. That drug could cost $1 million, and they are going to pay 5 percent under current law.
By the way, that is the list price. Even if the manufacturer and the pharmacy benefit manager have a deal where the drug might be priced at $100,000 but the rebate is $50,000 that goes back to the manufacturer-- so your net price is $50,000--the beneficiary is paying 5 percent of the list price. She is paying 5 percent of $100,000. She does not benefit from any rebates. This is current law.
We can imagine if a drug that is quickly developed, expensive to develop, and expensive to produce--and it is the only one that works against the coronavirus--it is going to be an expensive drug. We can also imagine if it is an old drug that happens to work, there might be somebody who buys it, closes down all the competition, and then charges an arm and a leg for this one old medicine--off patent for decades-- that happens to be the one medicine that actually works to prevent the progression of coronavirus infection.
How do we protect the senior citizen? Right now, one more time, she is exposed to 5 percent of the cost, no matter how expensive it is, under current law. There are a couple of proposals out there right now. One of them is on the House side, called H.R. 3, and the other principal bill on the Senate side is called Grassley-Wyden. I am going to rename it in a second. But let me just say those are the two bills.
Mr. President, you know this, but for the folks watching, I will explain the tension. Whatever we do to control the cost of medication has to preserve the incentive for industry--for pharmaceutical companies and vaccine manufacturers--to continue to innovate. If you take away all their profits, they will just go home. Why invest billions of dollars if you don't make a profit? On the other hand, if they are able to charge so much that no one can afford it, no matter how innovative they are, it is as if the innovation never occurred.
If the theme of this discussion is ``How do we make sure that coronavirus medications are available and affordable for the senior citizen?'' we have to strike that balance. It has to be the balance between encouraging innovation by allowing a profit but not so much profit that the senior citizen cannot afford it, and it is as if the innovation never occurred.
So far there are two options. There is a bill on the House side called H.R. 3. A lot of what they have is very similar to that which was passed in the Senate, which I personally think is a very good bill. But they have one provision that says the Federal Government can dictate to the pharmaceutical company: This is how much you charge. And if you don't accept our price, ultimately, we will take 95 percent of your profits.
If we are going to try to incentivize companies to come up with new medications to fight cancer, to fight coronavirus, to fight Alzheimer's disease, we can't go to them at the get-go and say: If you don't accept the price we dictate, we are going to take 95 percent of your profit.
That is the way you end up with no innovation whatsoever. Even though there is a fair part of that bill that is constructed, that one is a deal breaker, and I can tell you that this doctor, who has seen a tremendous amount of innovation that has saved so many lives, will not agree to a provision that kills innovation.
But then we go to the other side. What about the bill that we have here in Senate Finance? It came out of the Senate Finance Committee on a bipartisan basis, and on that bipartisan basis, it saves taxpayers $80 to $100 billion over 10 years. Drug companies still make their profit. They still have the incentive to innovate, but taxpayers also save.
Most importantly, for the sake of this talk--which is how we make coronavirus medications affordable to the senior citizen when they become available--we cap the amount of money the senior citizen has to pay for her drugs. They no longer pay 5 percent of this price, even if the list price is $1 million. We are going to cap that so the senior citizen can afford it. One thing we also do is protect the taxpayer from having to pay so much and, instead, ask the manufacturers and the pharmacy benefit managers to pay their fair share.
But for the purposes of this talk, instead of current law where it is 5 percent no matter how much it is, what the senior citizen has to pay is capped, so however much that coronavirus drug costs, the senior can afford it. She will not die because she can't afford to pay 5 percent of a list price no matter how high that list price is.
This so-called Grassley-Wyden bill has passed out of the Senate Finance Committee. It needs to come to the floor of the Senate. We need to have a vote on it because as we prepare to fight the coronavirus--to literally put in policies that will save lives of our senior citizens-- one of those has to be this: How do we make sure the drug is affordable?
I am renaming Grassley-Wyden. I am now calling Grassley-Wyden the ``Making Coronavirus Drugs Affordable.'' It caps out-of-pocket expenses; it lets patients pay over time, not all at once in January and February; it protects patients from price gouging; it preserves the innovation that does bring us these new drugs.
We have lots of stuff coming through this Congress to address our Nation's vulnerability to coronavirus. We need to focus on those who are most vulnerable, those who are 65 and above. We applaud industry, pharmaceutical companies, researchers, and vaccine manufacturers for the effort they are putting in to find those drugs. We thank the Chinese for running many of these clinical trials that will hopefully establish that one of these drugs is actually effective. Yet what we must do is continue to allow innovation and, at the same time, make sure that coronavirus drugs are affordable. This bill will pass the Senate if it comes to the floor. I ask that it be brought to the floor.
BREAK IN TRANSCRIPT
Source