Intelligence Authorization Act For Fiscal Year 2007--Continued
Floor Speech
INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2007--Continued -- (Senate - April 17, 2007)
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Mr. CORNYN. Mr. President, I rise today to discuss the Medicare prescription drug program that Congress passed a little over 3 years ago with a bipartisan majority. We have all heard the very impressive statistics associated with the Medicare Part D program. More than 90 percent of seniors eligible for the benefit have drug coverage, and they will save on average $1,200 per year.
More importantly, more than 80 percent of enrolled seniors have expressed their satisfaction with the program. Competition in the prescription drug benefit has forced down costs far below what was anticipated. In 2007, the average premium for the benefit was $22 a month, 40 percent less than projected at the outset.
The Congressional Budget Office's new budget estimate for the next 10 years shows that net Medicare costs for the prescription drug benefit will be more than 30 percent, or $256 billion, lower than originally forecast. Not only are the costs for this prescription drug benefit lower than expected, but for 2007 more drugs are also being covered by participating plans than last year. The average plan now covers 4,300 drugs in its formulary versus 3,800 last year, a 13-percent increase.
The basic point is this: We passed a prescription drug benefit that uses market competition to provide critical medications to seniors at a cost much lower than originally projected. The results so far demonstrate a familiar principle: competition and choice bring lower prices and, I might add, better service.
There are some who want to change that successful model, so we have to ask ourselves: How does their plan improve on this very successful Government program?
Since I believe being a zealous guardian of the taxpayers' dollars is one of the reasons my constituents sent me here, one of the first questions I ask is: Will the alternative plan of interfering with this market-based competition actually save taxpayers money while continuing to provide choice and access to prescription drugs for seniors?
The simple answer to this question is, no, and you don't have to take my word for it. The nonpartisan Congressional Budget Office determined that the proposal that is before us would have a ``negligible effect'' on reducing Government spending.
The advocates of this particular proposal that is pending before us cannot point to any Government source that will support their claim that the Federal Government can negotiate more effectively than the private market. Specifically, CBO writes that ``CBO estimates that H.R. 4 would have a negligible effect on Federal spending because we anticipate that the Secretary would be unable to negotiate prices across the broad range of covered part D drugs that are more favorable than those obtained by PDPs under current law.''
Secretary Leavitt describes in practice how having the Government negotiate drug prices will not lead to lower costs for beneficiaries or taxpayers. He has written:
We are seeing large-scale negotiations with drug manufacturers, but they are being conducted by private plans, not the government. A robust market with a lot of competitors has driven down prices. It's the magic of the market. To assume that the government, in our genius, could improve on this belies the reality of a complex task.
In fact, public opinion polls back up Secretary Leavitt's comments. A study by the Tarrance Group found that only 28 percent of seniors believe that the Government would do a better job in setting drug prices than a competitive marketplace.
The Washington Post agrees. It has written, on January 14:
Governments are notoriously bad at setting prices, and the U.S. Government is notoriously bad at setting prices in the medical realm.
As policymakers, it is also our job to ask: What are the potential consequences of this new legislation that is pending before us? Quite simply, the consequences are dire. Since Government will decide which drugs seniors have access to, seniors will be left with fewer choices.
In terms of analyzing the consequences of this alternative plan, it is helpful to look at examples in other countries that have tried what Democrats are now advocating in this model. We don't have to guess about what the consequences would be because other countries have tried it. I recently read a piece published in the Washington Post and written by Alberto Mingardi, president of a think tank in Italy, and I want to quote from this article because I believe it demonstrates my point. He writes about the Democrats' plan to require the Government to set prices, or at least giving the Secretary the authority to do that. He said:
It would create a Medicare drug program that looks a lot like the system we have in my country, Italy, where drug prices are among the lowest in Europe. At first glance, this might seem like an enviable model for America to follow. But before Pelosi rushes down the road to Italian-style health care, let me offer a word of caution. Italy is hardly a health care paradise. In fact, it's more like a quagmire of red tape.
For the most part, Italy's lower drug prices are the product of government price controls. In Italy, these price controls have created a number of problems. The government's attempt to force down drug prices has not produced overall health-care spending. Rather, it has resulted in a spike in demand--which is one reason why Italy's health-care spending has skyrocketed, growing nearly 68 percent between 1995 and 2003.
As for the quality of Italy's care, that, too, has suffered. With demand for drugs rising, the Italian government has attempted to save money by adopting reimbursement policies that favor certain drugs over others. Unfortunately, the most innovative products often aren't considered reimbursable by the government precisely because they are the most expensive.
It's a great system if you just need an antibiotic. But if you're hoping to avoid open heart surgery through access to a miracle drug, it can be a nightmare.
He concludes.
The economy is also harmed. Because it's simply not profitable for companies to invent cures in Italy, price controls have decimated Italy's pharmaceutical industry. So by attempting to hold down drug prices, the Italian government has deprived its citizens of the best care without reducing health-care spending. And it has deprived the country of what could be a vibrant sector of the economy. In their rush to revamp Medicare, U.S. policy leaders should be careful not to make the same mistake.
Mr. President, I ask unanimous consent that the article be printed in its entirety in the Record at the conclusion of my comments.
The PRESIDING OFFICER (Mr. Menendez). Without objection, it is so ordered.
(See exhibit 1.)
Mr. CORNYN. Mr. President, I also want to stress the last sentence that I read one more time, where he says: It is a great system, if you need an antibiotic. But if you are hoping to avoid open heart surgery through access to a miracle drug, it can be a nightmare.
We don't need to go down this path. We don't have to change course. Right now, under Medicare Part D, market forces and competition have created a wildly popular benefit that uses market competition to provide critical medications to seniors at costs much lower than projected a few short years ago.
I have spent a few moments describing my concern with the Democrats'
plan to ``so-called'' negotiate prices. I would say to ration drugs is a more accurate description.
But by far my biggest concern about this bill is, of course, another example of their preference for Government control in health care rather than market-driven, patient-centered approaches favored by those of us on this side of the aisle.
I would urge my colleagues to call this debate what it is: It is not so much about noninterference clauses in Medicare prescription drug laws. There is a much more importantly and potentially consequential debate about whom Americans want to be making decisions in our health care system. Do they want it to be the Government or do they want it to be patients themselves and their doctors?
I recently read a quote from a physician in Switzerland that I found particularly poignant. He reminds us that:
We all have a single-payer health care system. Citizens always wind up paying for health care, either through taxes, insurance premiums, or out-of-pocket costs. The real question is whether they will have a single-decider system. In many European countries, there are single-decider systems in which governments and their agents control what medical services its citizens will or will not receive.
Of course, we know all too well how close we are in this country to having a single-payer health care system. Roughly, 50 cents of every health care dollar we spend in the United States is spent directly by the U.S. Government. The health care economy is approximately $2 trillion annually, or one-sixth of the entire U.S. economy. I believe we have to reform our health care system, emphasizing individual choice and trusting patients and their families and their doctors to make the right choices--not lawyers or, yes, even bureaucrats in Washington, DC,--to make the important health care and treatment decisions.
So make no mistake about it, this bill is about a much larger issue than the title of the legislation itself would suggest. We are not debating some sterile provision called a noninterference clause. We are debating something far more significant.
The Washington Post believes this debate is about something much larger than the noninterference clause as well, and they have written:
The Democrats' stance is troubling because it suggests an excessively governmental-led view of health care reform. The better approach is to let each insurer offer its own version of the right balance, see whether it attracts customers, and then adapt flexibly.
In my State, the Dallas Morning News has written:
When congressional Democrats press for this change next year, remember they're pushing for much more than lower prices. They're seeking to move the line where government should stop and the marketplace should start.
I do agree with the Democrats that this debate is about negotiation, but the real question is not should we have negotiation but who should negotiate. The proponents of this legislation believe it should be the Government, and I couldn't disagree more. The proponents of this legislation believe the Government is more skilled in making pricing decisions than the free market, and I have to say, I think that is wrong.
We have been presented in this legislation with a remarkably clear choice: If you believe the way to improve our broken health care system is to embrace a market-driven approach that lowers costs and does not reduce choices for seniors, then you will vote to continue the prescription drug program that we passed a few short years ago. If you believe, as the advocates of this legislation do, that Government bureaucrats are better suited than the free market to make pricing decisions for thousands of prescription drugs, then you will want to vote for this legislation.
I will vote for the current market-driven approach that provides choices for seniors and puts patients and doctors in control rather than the Government, and I urge my colleagues to join me.
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