Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Conference Report
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003-CONFERENCE REPORT
Mr. DURBIN. Mr. President, before saying a few words about this Medicare bill, I would like to say a few words about the senior Senator from West Virginia. This man is such an amazing person. At 86 years of age, what he brings to public service and what he brings to the Senate is incredible.
I was in the Chamber earlier this morning when Senator Byrd arrived. He said he would like to say a few words. I said, quite honestly, I am ready to follow you into battle any day. I deferred to him, which I was happy to do. He is a grand person and such an amazing Senator.
I have been fortunate to represent a congressional district in Illinois and the State of Illinois for over 20 years on Capitol Hill, and I have many favorite moments. But in the top tier of those favorite moments was the time in a conference committee downstairs from this Chamber involving Senator Byrd, and I would like to tell those who are following this debate about that experience because I still marvel at what he did that day.
He came to a conference committee on the Transportation appropriations bill facing a critic in the House who said that Senator ROBERT C. BYRD of West Virginia had put too much in this bill for the State of West Virginia. And your critic from the House was going to have his day with you at that conference committee.
As some people know who follow the Senate, the appropriations conference committees gather at a large, long table and the House Members sit across the table directly from the Senate Members. So your critic in the House came and took his seat with a sheaf of papers prepared to do battle with you over the Transportation appropriations bill. You arrived and just fortuitously happened to sit directly across from him at that table. He began his peroration about how terrible it was that West Virginia would have so much in this Senate bill and he was going to do something about it. He went on for all of 15 minutes. He got red in the face, his arms were waving, and finally he was spent. He had nothing more to say.
Then, as I recall, you turned to the chairman-which could have been Senator Hatfield of Oregon-and asked if you could be recognized.
The Senator began his remarks, and that is what I thought was the most remarkable moment, saying, in the history of the United States there is an exchange of speeches between two individuals which defined Federalism as we know it and the role of small States like West Virginia in the Senate and larger States. That exchange was between Daniel Webster and Robert Hayne.
Senator Byrd went on to say, Webster's reply to Mr. Hayne was delivered on January 20, 1830. And then Senator Byrd added, "and if my memory serves me, it was a Thursday." He proceeded to give an important history lesson to all who had gathered, Members of the House and the Senate, about why West Virginia had a fighting chance in the Senate but might not have that same chance in the House, as each State has two Senators, of course, in this Chamber, and represented proportionately in the House.
I was absolutely spellbound by his performance that day in that small room. When it was all over, of course, West Virginia fared well in that appropriations bill, as it always has since Senator Byrd has been here to make sure his State was not shortchanged. I was in the House at the time, and a few years later I came to the Senate and said to Senator Byrd: Of all the things you said in the speeches, when you said, "If my memory serves me, it was a Thursday," I still remember those words.
Senator Byrd said: Well, Mr. Durbin, if I am not mistaken, it was a Thursday.
I said: I am not questioning you; I am sure it was a Thursday.
Later in the day, he called me over to his desk and pulled out a perpetual calendar, and said, yes, January 20, 1830, was a Thursday.
It says a lot about this Senator, not only his reverence for history and this institution, but the fact that he brings to many of these political battles an insight that many Members admire so much and respect. Whether you are on his side or not, you best sit back and listen closely when Senator Byrd takes the floor because he brings to each one of these debates the very best in public debate and the very best in public service.
This Senator was happy to step back and listen very carefully as the Senator from West Virginia made another compelling argument on a very important and historic piece of legislation.
Mr. SARBANES. Will the Senator yield?
Mr. DURBIN. I am happy to yield.
Mr. SARBANES. I listened to the able Senator from Illinois with great pleasure because I strongly share his feeling and views about Senator Byrd. I took the floor for a brief moment to underscore the extraordinary contribution that Senator Byrd has been making to the national debate in the recent period on issues of critical national importance. He has taken to the floor time and time again and spoken with a clear strong voice. He has sounded a clarion call to the country. I know from people I talk to that voice is reaching into many corners across the land and prompting Americans to think deeply about the issues that confront the Nation, and even more deeply and fundamental about how we go about conducting our business and making these decisions.
The vote last night in the House of Representatives was held over for 3 hours in order for the Republican leadership to twist arms in order to change the outcome, which was already up on the board, where they had lost by two votes. That rollcall vote was held open indefinitely. My able colleague from Maryland, Congressman Hoyer, remarked afterwards, it would be as though you had election day, the time came for the polls to close, and you held the polls open for another 15 hours while you went out and somehow found the votes to assure you the result. It is an abuse of the democratic process.
The Senator from West Virginia has always spoken. He sounded a loud trumpet about our Nation. We are deeply in debt to him and appreciate that.
Mr. DURBIN. I thank the Senator from Maryland. I might just add something I have said in the Senate and I told Senator Byrd during the debate on Iraq. I went to my church in Chicago with my wife-this is highly unusual in my church-as we came back from communion, and we are kneeling, an elderly man came up to me and leaned over on his way back from communion and he said: Stick with BOB BYRD.
I came back to tell Senator Byrd that his message reached beyond this Chamber and beyond the State of West Virginia. It has been not only heard, but it has been applauded by the Nation of grateful people who are glad you are here in service to our country and continue to be. If you reach the age of Methuselah, Abraham, Isaac, or Moses, I hope I am still here to defer to you and listen carefully as you make these presentations.
Mr. BYRD. Mr. President, will the Senator yield?
Mr. DURBIN. I am happy to yield.
Mr. BYRD. Mr. President, I am deeply grateful to these two fine Senators for the kind words they have just spoken, Senator Durbin and Senator Sarbanes. I will go to my everlasting resting place with love and gratitude and affection and admiration and respect for these two Senators and how they have served the Nation and this institution and been loyal and true to the Constitution of the United States forever. I shall think of them and be in their debt. I thank the Senator.
Mr. DURBIN. I thank the Senator from West Virginia.
The Senator from West Virginia, when he came to the floor, gave us an important message. He asked us to look at this very carefully. This, my friends and fellow colleagues, is a proposed law. It is huge. But that is not uncommon. And that should not be a reason to vote against it. The reason to vote against it is what is contained in this law, this proposal, this bill.
When we started this debate about prescription drugs for seniors, overwhelmingly the President, the Republicans, Democrats, all agreed on one thing: We needed to find a way to provide affordable prescription drugs for senior citizens. Medicare, as good as it is, provides good care through hospitals and doctors but not enough help when it comes to paying for prescription drugs. We understood that needed to be done.
The solution was obvious from the start. The solution to this challenge was to put under the Medicare Program a voluntary, comprehensive, and universal plan to pay for prescription drugs, to use the same successful model that has guided us for 40 years in keeping seniors healthy through good doctors and good hospitals, and also provide prescription drugs. We knew if we did that, it would work as Medicare has worked. The proof of Medicare's success is the fact that seniors are living longer, they are healthier, they are independent, and they are strong.
But there was a criticism of using this so-called Government approach. The criticism came from political extremes that argue that the Government shouldn't be involved, and also from the pharmaceutical industry which understood full well, if Medicare could bargain for seniors across America, Medicare could bring down the prices of prescription drugs just as the Canadian Government has brought down the price of those same drugs for its citizens.
The pharmaceutical companies lived in dread that Medicare would be able to have cost control and competition and bring down the price of drugs.
So we started on this convoluted path to find an alternative. The first suggestion was, why not let private insurance companies provide this prescription care benefit? Let them compete. There is nothing wrong with that from this Senator's point of view. If private companies want to offer prescription drug benefits and compete with Medicare, so be it. Let's see what happens. Let's see if that competition will also help seniors.
But they said, wait a minute, we are not wanting these private companies to compete with Medicare. We want Medicare out of the business of competition completely. That was the starting point for the Republican approach to prescription drugs. Of course, the pharmaceutical companies applauded this because if they do not have to answer to Medicare with 40 million Americans under its protection but, rather, to smaller companies, they have more bargaining power. So we went through this long exercise in the Senate about this proposition that private insurance companies would somehow provide prescription drug benefits to seniors.
I offered an amendment on the floor, supported by most of my colleagues who are here today, that said: Give Medicare a chance to compete. We did not prevail. In fact, we did not get any votes from the other side of the aisle. The Republican approach to this from the start was to say they believed in Medicare, but then to turn their backs on Medicare when it came to prescription drug benefits.
Well, eventually we were faced with the prospect, in the Senate bill, of either accepting their approach, and moving toward prescription drugs for seniors, and passing it out of the Senate, or doing nothing. Most of us voted to move the bill forward and into the conference committee. But, sadly, that was not the end of the story.
When it came to the conference committee, there was a new political force at work, not just the people who wanted to keep Medicare out of the prescription drug business but a new group from the House of Representatives with a much more radical agenda. What they wanted to achieve was not just private insurance companies offering prescription drug benefits, they, in fact, wanted to privatize Medicare itself.
We started by wanting to add a benefit to Medicare, and now the House Republicans, and their cohorts in the Senate, have said: We want to change Medicare. We want to make certain that Medicare as you know it will not be there in the future.
One of the proponents of this point of view was former Speaker of the House Newt Gingrich, who this week came to the Republican House caucus and said: Vote for this bill; this is a good bill. That should be proof positive to anyone listening that this is a bad bill. Because it was that same Speaker Newt Gingrich, whom I served under in the House, who said, at one point, that we should allow Medicare to wither on the vine. There was no personal or political commitment by Speaker Gingrich to Medicare. And for him to endorse this huge bill is proof positive to me that within the four corners of this bill are threats to Medicare we need to take seriously.
This morning, as I came to the office, on Saturday, I had an e-mail from one of my staffers who fields the phone calls that come into my office. She wrote and said: Senator, something unusual is happening out there. When you first started debating prescription drugs under Medicare a few months ago, the phone calls were generally positive. Seniors were saying: Let's do it; we have waited too long. But she said: Something's happened. There is a sea change out there. The phone calls are overwhelmingly negative now.
Seniors have come to understand this bill not only does not give them good prescription drug coverage but it is a full-scale assault on Medicare itself, and they are calling every office, congressional and senatorial office alike, saying: Defeat this legislation.
Now, doesn't that tell us something? Doesn't it tell us something, that what we started off in believing-that seniors wanted prescription drugs-has now been rejected by them when they learned what is at stake? And there is a lot at stake.
This bill will raise Medicare premiums, something which lower income seniors will find very difficult to deal with. It will force seniors into HMOs. And you know what that means. That means insurance companies will pick their doctors and their hospitals for them and say that they will lose the right to choose their own doctors and hospitals.
Of course, that is the grand old Republican plan: that Medicare as we know it would change; that, instead, we would be dealing with HMO insurance companies. And I can tell you, I have yet to run into a senior citizen anywhere who endorses HMOs, nor many doctors who believe they are very good when it comes to quality health care. Yet that is the solution that is being offered here.
It is not bad enough that my friends on the Republican side of the aisle have said they want to move toward private insurance companies and privatizing Medicare. They do not even believe in the value of the free market in this experiment. Because they are not saying to HMOs: We want to open the door and give you your chance to compete. No. They are coming through with more than $10 billion in Federal taxpayers' subsidies to be given to these HMO insurance companies so that they capture more and more seniors out of Medicare.
Think of that. The Republican free market, entrepreneurial spirit that is being sustained by a $10 billion Federal slush fund for HMOs so they can take more and more seniors out of Medicare.
What is even worse, as they draw seniors out of Medicare, they will look for, as most insurance companies do, the healthiest of the seniors, leaving behind the poorest and the sickest seniors in Medicare, meaning that the costs of Medicare per person are going to go up, and Medicare will become more expensive, and perhaps less popular from a budget point of view.
That is the grand plan here: Starve Medicare; have it wither on the vine. Newt Gingrich's vision for Medicare is finally realized in this 1,200-page bill. Speaker Gingrich rides again. He has prevailed. His was the voice that prevailed when it came to the contents of this bill.
Sadly, too, this bill will eliminate drug coverage for millions of Americans. We have had a Congressional Budget Office review of what happens when this bill goes into effect.
Mr. President, 2.7 million retirees will lose the private insurance coverage they currently have. Understand who these people are. These are people who have worked for a lifetime for a company, with the understanding they would receive a retirement benefit which included prescription drug coverage. And when this goes into effect, this proposal that has been brought before us, the Congressional Budget Office and other sources tell us 2.7 million Americans will lose their prescription drug coverage. They may lose all of their health coverage during retirement.
Over 100,000 of these unlucky retirees are in my State of Illinois. For them, if for no other reason, I will be voting no on this. I will be voting no because, frankly, we are basically saying: We want to reward HMOs. We want to reward pharmaceutical companies at the expense of people who have worked a lifetime for security in their retirement and will lose it because of this bill.
How can we, in good conscience, stand here and say we are going to create a mechanism where companies will have the rationale and the opportunity to drop their retiree health care coverage? That is sad. Medicare was created because seniors across America did not have a helping hand when it came to doctors and hospitals. And now, in this effort to privatize Medicare and reward the big drug companies, we are going to provide less coverage for seniors across America.
Let me speak for a moment about the pharmaceutical aspect of this bill. We know if we have competition, we can bring prices down. We also know if the Government shows leadership, as they have in Canada, prices of drugs will come down. But the pharmaceutical companies have prevailed. The pharmaceutical companies have won the argument.
The most important question asked about any piece of legislation before the Congress is this: Who wants it? Who wants this bill?
First and foremost, the pharmaceutical companies want this bill because there is no effort to bring down the cost of drugs that American families and seniors have to pay-no effort whatsoever.
We had a provision included that called for generic drugs, one way to try to get good drugs that are lower priced in the hands of seniors, and it was weakened dramatically in the conference. We had an opportunity, through a provision proposed by the House of Representatives, for reimportation of drugs from Canada and Europe so seniors had a chance to get a break there if they could not afford the drugs here in the United States. That was dramatically weakened, too. And the Bush administration has vowed they will never let it happen, they will not allow reimportation to happen.
So if you do not have generics encouraged, and you do not have reimportation, and Medicare is not competing for cost, what it means is the pharmaceutical companies have their prayers answered, their dreams come true. They will continue to hike the cost of pharmaceuticals and drugs, and this Government and this bill will do nothing to stop it, and seniors across America will find this so-called prescription drug benefit of little or no value as time passes. Because if the cost of drugs goes up 10 or 15 percent a year, no matter what the Federal Government offers, in the end, there is little to show for it-less and less each and every year.
Mr. SARBANES. Will the Senator yield for a question?
Mr. DURBIN. I am happy to yield for a question from the Senator from Maryland.
Mr. SARBANES. Am I correct in my understanding that under this bill, the Government, through Medicare, could not, in fact, bring its weight to bear in order to lower the cost of prescription drugs through a buying program, where they are a heavyweight in the scale-that the bill actually precludes that from happening?
Mr. DURBIN. The Senator is correct because Medicare is not given the option of offering prescription drug coverage here, an option which most seniors would gladly endorse. And the reason is obvious: If Medicare can bargain on behalf of 40 million Medicare recipients, it has the bargaining power to bring down the cost of drugs for seniors. The pharmaceutical companies hate that concept, "like the devil hates holy water," to quote our old friend Senator Bumpers, who used to say that on the floor from time to time.
They don't want competition. They don't want cost control. They have won the day.
The Senator from Maryland has turned on his television at home in the last few days and weeks and maybe heard his name mentioned on television commercials that are being paid for by the pharmaceutical companies saying: Senator Mikulski, Senator Sarbanes, vote for this bill. They are spending millions of dollars saying vote for this bill because this bill will mean millions and millions more in profit for those same pharmaceutical companies.
Mr. SARBANES. Will the Senator yield for a further question?
Mr. DURBIN. I am happy to yield.
Mr. SARBANES. In addition to precluding the Government from bringing its weight to bear in purchasing in order to lower the cost of drugs because they would be a very big purchaser and obviously they would have an impact, some have said: Well, let's at least allow for the reimportation of drugs from other countries, particularly Canada. Some of our people have been going to Canada in order to get their prescription drugs. They cross the border, and they can buy them at 40, 50, 60 percent less than they pay in this country. So there were provisions that passed to allow reimportation. Am I correct that, in effect, this bill eliminates that?
Mr. DURBIN. The Senator is correct. This bill gives the last word to the Bush administration and the head of the FDA who have said categorically they are opposed to reimportation. The reason they are opposed is that it would be more competition for pharmaceutical companies that want to charge higher prices in the United States. I have believed all along that we are not importing drugs from Canada, we are importing leadership from Canada. The Canadian Government has stood up for its citizens and said: We are not going to allow the drug companies to raise their prices every single year. This Government, this Congress, refuses to show the same leadership, and now is effectively blocking the reimportation of drugs that seniors need to survive.
Mr. SARBANES. Will the Senator yield for a further question?
Mr. DURBIN. I am happy to yield.
Mr. SARBANES. I also understand there was an effort to clear the path for generic drugs to become available. Of course, generic drugs sell at a lesser cost than brand name drugs. A lot of the pharmaceutical people are opposed to that.
It is also my understanding that this bill fails to carry through on the efforts to make it easy to bring generic drugs to market. Am I correct in that respect?
Mr. DURBIN. The Senator from Maryland is correct. It is another success story for the pharmaceutical industry because they bring the drugs to market, brand name drugs, under patent, and during a period of time they have a right to sell them exclusively in America. But when that patent runs out, then other companies can make that same drug and sell it, usually at a much lower cost. So the pharmaceutical companies that make the brand-name drugs found ways to delay the process so that the generic drugs could not replace the brand-name drugs, so they could continue to make millions and millions of dollars off the brand-name drugs even when their patents expired. We changed that in the Senate.
We put in language that said we are going to move toward generic drugs so consumers can have affordable drugs. And, frankly, in conference committee, the pharmaceutical companies won again, another reason they are running ads about this Senator and the Senator from Maryland saying vote for this bill right now, because they know it means more money to an industry that is already the most profitable industry in America.
Mr. SARBANES. Will the Senator yield for one final question?
Mr. DURBIN. I am happy to.
Mr. SARBANES. I hate to intrude on his time, but this is a very important point. With this legislation, the pharmaceutical companies have, in effect, slowed the ability of generic drugs to come to market, which would be one source of competition that would lower their prices. The reimportation provisions have been written in such a way that it is completely in the hands of the administration whether reimportation of drugs, say, from Canada is allowed. The administration has been very clear that they are opposed to doing that. The legislation also, in effect, knocks out the Government from being a direct purchaser and controlling the prices.
Every source that potentially could exercise some pressure or influence on the pharmaceutical companies to lower or restrain their prices is being blocked out by this legislation. So the end result is that it is an absolute bonanza for the drug companies. Would you say that is a reasonable perception of what this legislation does?
Mr. DURBIN. I would say the Senator from Maryland is correct. I would refer him to a Bloomberg News article yesterday with the headline "139 Million Dollar Lobby Blitz Thrown at Medicare Bill." And it leads by saying:
Health care companies, led by drug makers Merck & Co. and Eli Lilly, spent a record $139.1 million in six months to lobby Congress on a Medicare bill that will help the elderly buy prescription medicines. The pharmaceutical companies were the biggest spenders in the health care industry putting money into this lobbying effort.
The Senator knows, as I do, that if you find pharmaceutical companies working feverishly night and day to pass this legislation, it isn't because they want to make less money. They want to make more money. So we have the GOP, which could now be the acronym for the Greedy Old Pharmaceutical companies; that is what is pushing this legislation. That is proof positive that the seniors will be the losers.
The seniors understand that, as do families across America. It isn't bad enough that it is just pharmaceutical companies that are going to make out so well. The same thing is true about HMO companies, the HMO insurance companies with the more than $10 billion Federal slush fund so they can compete with traditional Medicare, $10 billion, and a reimbursement level of 109 percent for these same companies for their expenses while they are competing.
Then to add the crowning touch is something called health savings accounts. I would say to the Senator from Maryland, you are going to recognize this song after I sing a few lyrics. A company called Golden Rule Insurance Company, originally out of Evansville, IL, now based out of Indianapolis, with a man named Mr. Rooney as its CEO, has been locked at the hip with the Republican leadership on Capitol Hill since Speaker Gingrich took over in the House. That is when they dreamed up this idea of medical savings accounts and said: Here is the wave of the future. We can replace health insurance as we know it with the Golden Rule model of medical savings accounts, resulting in our efforts in 1996 of a demonstration project to so see if this flawed concept would work. So few people were interested in signing up for it, it was a failure on its face.
Guess what. In this bill there is a $6 billion subsidy for health savings accounts. In other words, not only are we guaranteeing record profits for pharmaceutical companies, not only are we creating a $10 billion slush fund for HMOs to take seniors out of Medicare, we are putting $6 billion into this boondoggle health savings account. I was on the floor watching the Energy bill yesterday and thinking it was scandalous that we were putting $2 billion into the MTBE and oil industry-$2 billion. They did us better with this bill. The Republican conferees came back and said: Let's up the ante; let's make it $6 billion to subsidize this crazy concept of health savings accounts engendered by the Golden Rule company, one of the greatest benefactors of the Republican Party on Capitol Hill. If that isn't proof positive that this bill has gone astray, I don't know what is.
I say to seniors who continue to call congressional offices, keep the calls coming in. Let me suggest to them as well that if many of them happen to be members of AARP, here is that telephone number. Call your friends at AARP, ask Mr. Novelli, who has endorsed this boondoggle, why in the world has he turned his back on seniors? Why is he not fighting for more competitive drug prices? Why isn't he trying to stop the HMOs from privatizing Medicare? And why are we putting a $6 billion subsidy in here for friends of the Republican Party, the Golden Rule Insurance Company. I think seniors across America get the message.
There was just a poll taken this week of members of AARP, which I hope Mr. Novelli will have a chance to read.
The poll shows that once seniors have been told what is in this bill, 65 percent of the members of AARP said they should stop trying to pass this bill and work for a better plan, and only 18 percent of the members of AARP supported it. So by a margin of almost 4 to 1, the members of AARP are saying to their leadership: You have it wrong.
I think, frankly, it is a burden now on AARP to come back to its roots and decide whether it is going to stand up for seniors or for pharmaceutical companies and HMOs. I hope the seniors across America who are as upset about this as many of us are will call AARP and tell them to stop spending millions of dollars trying to pass this bill. Instead, they should try to save Medicare first, and they should say basically don't sell out the seniors of America.
AARP is now in lockstep with these pharmaceutical companies and HMOs. They have forgotten their mandate, which is to stand up as a voice for seniors across America. That is unforgivable. I think they are going to find a lot of their members tearing up their cards and walking away from this organization. It has become very political and insensitive to the seniors across America.
Mr. SARBANES. Will the Senator yield for a question?
Mr. DURBIN. Yes.
Mr. SARBANES. The Senator made reference to a better bill. The very able Senator from Illinois, in the course of debate in the Senate, offered a better bill, which I was very pleased to support. That bill would have been a very significant and substantial step forward. Among other things, it did not have this "donut" in coverage that is in this bill.
As I understand this bill, at a certain point-I think $22.50 in drug cost-and beyond that, up to $3,600, the burden falls back on individuals; is that correct?
Mr. DURBIN. The Senator is correct.
Mr. SARBANES. In the Senator's bill that didn't happen; is that correct?
Mr. DURBIN. That is correct. This is a moving target. The fact is that there is a gap in coverage for prescription drugs built into this proposal so that the sickest seniors with the highest prescription drug costs will find some coverage on the front end of the year for their illness and then find themselves paying out of pocket $2,850, if I am not mistaken, before they get more coverage from the prescription drug benefit. So this so-called donut hole is one that I think seniors who are really sick and those who need expensive drugs should be aware of.
The bill we offered said Medicare will come in and compete for lower drug costs and the savings we can gather for lower drug costs will close this donut hole.
Mr. SARBANES. Will the Senator further yield for a question?
Mr. DURBIN. Yes.
Mr. SARBANES. Would we not also have been able to not have a donut hole if these moneys the Senator made reference to that are going to the HMOs-the $10 billion, I think you said-
Mr. DURBIN. Yes, a $10 billion slush fund for HMOs.
Mr. SARBANES. Also $6 billion-
Mr. DURBIN. Yes, for health savings accounts, for their buddies at Golden Rule.
Mr. SARBANES. So that $16 billion could have been taken and put directly to improve the benefit for our seniors, could it not?
Mr. DURBIN. The Senator is correct. The Senator starts with the same premise I do-that seniors are most comfortable with Medicare. If this started off as an added benefit to Medicare, this bill would have been much smaller and more understandable and supported by seniors. But when they rejected that and said, we are going to go to private companies, they really opened up all sorts of problems. They guaranteed profitability, put in slush funds, and they complicated it to the point where most seniors will struggle to understand it. This didn't have to be the case.
When you are out to privatize Medicare and reward pharmaceutical companies and help HMOs, that is where you end up.
Mr. SARBANES. As I perceive it, all of these things that are being done-the HMOs, the medical accounts, the limitation on Medicare being able to act directly, and so forth-if this stack of papers on the desk represents the Medicare Program itself, they are circling around it to undermine and undercut it. This bill has taken on an added fundamental dimension.
So as we look at this bill, we have to look at not only its shortcomings in adding prescription drugs to the Medicare Program, but we have to perceive that built into the bill are a number of efforts being put into place that will undercut the Medicare Program itself. Is that a reasonable view of the potential of this legislation?
Mr. DURBIN. The Senator is correct. There are those who began this debate saying: We are going to change Medicare. Well, they had their way. Many came here saying: We want to help seniors pay for prescription drugs. If we had stuck to our original goal and focused on what seniors really want and what works, I think we would have achieved this result through Medicare a long time ago. It would have been at the expense of the profitability of pharmaceutical companies.
I say to my friend, who follows some of these corporate reports more than I do, this pharmaceutical industry is the most profitable in America. Look at this chart. Profits as a percentage of revenue in 2002: No. 1, pharmaceutical companies, with 17 percent return on revenues. Return on assets: No. 1, pharmaceutical companies, with 14.1 percent. Then they were nosed out when it came to return on shareholders' equity by household and personal products, but they are still No. 2, with 27.6 percent profit as a percent of equity.
This bill is giving them more profit at the expense of families and low-income seniors in America. That is why the pharmaceutical companies are spending millions of dollars for television, radio, and newspaper ads telling this Congress to "do our bidding." That is why they already spent $139 million lobbying Congress to pass this bill.
If the pharmaceutical companies wanted to help seniors, they could have done this long ago. They could have charged more reasonable prices, particularly to low-income seniors. But that isn't their goal. Their goal is more profitability. Sadly, they found allies with the Republican majority who are attempting to pass this bill and make certain they are more profitable.
Mr. SARBANES. If the Senator will yield on that point, in confirmation of the Senator's analysis, the markets, in the last few days, have been boosting the price of the stocks of the pharmaceutical companies. The perception in the capital markets of the smart money people is that this legislation is going to significantly benefit the pharmaceutical companies, and they are building up the stock prices, which only goes to confirm and corroborate the analysis the Senator from Illinois has made on this issue.
Mr. DURBIN. The Senator from Maryland is correct. I will make this one last reference as I see colleagues in the Chamber who want the floor.
Represented on this chart are the compensation packages for the HMOs. This is another group that is benefiting. The $12 billion slush fund will be going to HMO companies such as these on the chart. They will leave poor and sicker people behind. There will be a $12 billion slush fund and some more benefits given to HMO companies. Look at the compensation for the executives. It runs from the obscene at Oxford, where Norman Payson gets $76 million.
Mr. SARBANES. Is that per year?
Mr. DURBIN. Yes. Mr. Payson had a very good year. Alan Wise at Coventry gets $21.6 million. This man must be really gifted if he is worth that to run a managed care company, which is now going to be in the category of companies eligible for the $10 billion Federal subsidy.
Down here is United Health Group, where R. Channing Wheeler is getting $9.5 million. I bet he was embarrassed going to the country club with his friends and only making $9.5 million.
Incidentally, United Health Group-do I remember that name from the AARP newsletter? Yes. It turns out they are in business together. It turns out that AARP, which is for this bill, is in business with United Health Group, a managed care company. Frankly, as I understand it, 60 percent of the revenues of AARP come through their insurance and advertising. Is it any wonder that AARP is pushing for this bill, when seniors are opposed to it?
I want to close because I see other colleagues in the Chamber. I say to seniors across America: If you have received your AARP solicitation and sent back your membership card, please call AARP at 1-800-424-3410. Tell them to stand up for seniors for a change, to reject this bad bill that won't result in lower prescription drug costs and will privatize Medicare.
Tell them you are opposed to a slush fund that is being created for HMOS. Tell them you think it is scandalous that we give $6 billion to Golden Rule for health savings accounts. And tell them it is time for your organization, AARP, to stand up for seniors and stand up for Medicare instead of caving in to the special interest groups and supporting this legislation.
Mr. President, I yield the floor.