Prescription Drugs

PRESCRIPTION DRUGS -- (Senate - April 18, 2007)

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Mr. GRASSLEY. Mr. President, I ask the Chair to please inform me when I have used 11 minutes.

Mr. President, we have a situation here where the latest argument has been that when we wrote the bill 4 years ago, providing pharmaceuticals for seniors under Medicare, we went one step too far by saying the Secretary of Health and Human Services should not interfere in plans negotiating drug prices.

Well, I want everybody to understand that we took this language from several different Democratic bills which had been introduced because I wanted this program to be as bipartisan as we could make it. So we had Senator Moynihan introducing President Clinton's bill in 1999 which had that language in it. We had a Daschle-Reid bill in the year 2001 which included that language. We had a House bill in 2001 whichÐ included that language. We had aÐ Gephardt-Pelosi-Rangel-Stark-Dingell-Stabenow bill--Senator Stabenow now--which had this language in it.

So I want people to know that as to this language which they now think should not be in this legislation--the bipartisan approach--we took this language because we thought this would be one step further toward making this whole program bipartisan because we do not have enough bipartisanship in the Congress now. All of a sudden, everybody who thought this language was perfect language thinks this language--from Democratic pieces of legislation--ought to be struck out of this bipartisan bill. Obviously, as I said yesterday, and I say today, we have plans that are working. And if it ain't broke, don't fix it.

Mr. President, I have always been fond of jigsaw puzzles--spinning the pieces around, figuring out how the pieces of a puzzle all fit together, until you finally see the whole picture. This debate is a lot like working a jigsaw puzzle. I would like to have you take a look at a few of the pieces.

One piece is the House bill, H. 4, passed by the House. The House bill requires the Secretary to negotiate prices with drug manufacturers. The House bill also strikes the ban on Government price-setting. To date, the House authors have not explained why they wanted to authorize the Government to set prices.

The Congressional Budget Office said the House bill would not achieve any savings unless the Secretary was given the authority to establish a formulary or use some other tools to negotiate lower prices.

Let's look at another piece of the puzzle; that is, the bill before us, S. 3. The Senate bill authorizes the Government to take over Medicare's negotiations. It strikes the prohibition on Government interference in negotiations the prescription drug plans are doing today, negotiating with the drug companies to get drug prices down. The average cost of the 25 most used drugs by seniors is down 35 percent.

The Senate sponsors keep saying their bill ``begins the process'' for negotiation. But what about the negotiation that has been going on for 4 years under this bill? They say their language, by striking, is a step toward what they want.

As was the case in the House bill, H.R. 4, the Congressional Budget Office also says the Senate bill, S. 3, will not achieve any savings unless the Secretary establishes a national formulary or uses other tools to reduce drug prices.

So we have two bills, two pieces to our puzzle. But on Thursday night, in our Finance Committee markup of S. 3, we found a missing piece that helps us bridge the bills together and finally see the full picture of the puzzle.

On Thursday night, I offered an amendment that would prevent the Secretary from using preferred drug lists to limit access to approved prescription drugs. We have heard over and over again from our colleagues that neither H.R. 4 nor the Senate bill, S. 3, allows for a national formulary. But as all observers of the Medicaid Program know, States are not allowed to use formularies, but the courts have said States can use preferred drug lists. A preferred drug list is just like a formulary, only in sheep's clothing. It is a Government-controlled list of drugs a beneficiary can and cannot have; in other words, the Government saying what drugs you can use, not your doctor, or at least what drugs we are going to pay for. A national preferred drug list would have the same effect, then, as a national formulary.

So I thought: For all the talk about not allowing Government formularies, the proponents of S. 3 would embrace a provision banning preferred drug lists. If they really do not want to limit beneficiary access to drugs, it should have been an easy thing for them to support. So I offered that amendment to prohibit the Secretary from imposing a national preferred drug list. Much to my surprise, every Democrat in the committee voted against my amendment. When the proponents of Government negotiations defeated my amendment, they were, in fact, voting in favor of having the Government limit access to drugs. They voted for Government limits on access to drugs. They voted to have the Government tell beneficiaries which drugs they can have and which they cannot have, which is an intervention of Government between a doctor and a patient--that relationship we were working so hard to preserve when we wrote the bill in 2003.

We have the final piece of the puzzle allowing everything to fall into place.

What would H.R. 4 and S. 3 look like after they merged them together in conference between the House and Senate?

Well, you can put two and two together and get an answer.

H.R. 4 requires the Secretary to negotiate drug prices and eliminate the ban on price setting. It is clear now that supporters of the Senate bill want the Government to set preferred drug lists because they voted against it when I offered that in committee, that the Secretary couldn't do that, preferred drug lists, which are just like formularies. They want the Government to determine what drugs seniors will be allowed to get coverage for. We have heard all this hooray about the VA and how they do things. Remember, the VA only pays for 23 percent of the drugs that seniors can get now under Part D.

The puzzle is complete. If we let S. 3 go to conference, we will have returned to us a bill that requires the Secretary to negotiate with drug manufacturers using price controls and a national preferred drug list. It couldn't be more clear.

We must not let that happen. We must put a stop to it and do it right here. Price control and a national preferred drug list are the tools they want the Government to have. They want to have the Federal Government take over Medicare prescription drug marketing, and that is absolutely the wrong thing to do. The Medicare drug benefit is working. ``If it ain't broke, don't fix it.'' It is a testimony to the idea that the private market works, that Government-run health care is not the answer.

They say Medicare doesn't negotiate. That is not true. Medicare is negotiating today, just the way we set it up 4 years ago to negotiate. Medicare is negotiating through the market clout of its prescription drug plans, and the market-based model for Part D is working. Costs are far lower than expected. CBO projections for Part D dropped by $308 billion--32 percent lower. That is the 2007 baseline compared to the 2006 baseline. Premiums for beneficiaries are 40 percent lower. Seniors overwhelmingly approve of the benefit.

So why do supporters of this legislation hate the Medicare drug benefit so much? They hate it because nothing could be more damaging to the idea of Government-run health care than Part D, the way we wrote it 4 years ago. It is a free market plan, and it is a market that is working, and that is not their plan for how health care should work. Their view is that Government knows best.

So what do seniors and all Americans have to look forward to if this Trojan horse attack succeeds in a Government takeover of prescription drugs? Seniors can look forward to fewer choices. Gone will be the days when seniors can select from various plans to find one that suits them. If this bill passes, seniors will get only the drugs the Government selects for them.

Do you want a Government bureaucrat in your medicine cabinet? All other Americans will see higher prices for their prescription drugs, experts testified before the Finance Committee.

I will go ahead and use up the remaining minute.

CBO has said that everybody else's prices will go up. We have reams of evidence showing that price controls and Medicare will lead to higher drug costs for everybody else. That means higher prices for veterans. That means higher prices for the disabled, pregnant women, and children on Medicaid. That means higher prices for small business owners and families. If we don't stop this bill right now, that is what we have to look forward to.

We can and should stop this bill in its tracks. Vote against Government-controlled drug lists, vote against Government setting prices, vote against Government restriction on seniors' access to drugs.

Mr. President, everyone should move beyond the simpleminded rhetoric of sound bites and see the full picture because sound bites don't make sound policy.

I yield the floor.

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