Prescription Drugs

PRESCRIPTION DRUGS

Mr. WYDEN. Mr. President, yesterday, the Senate got the eye-popping news that prescription drug benefits will cost far more than anyone had ever anticipated. In fact, the early appraisal was that it would cost $400 billion, and then it shot up to over $500 billion. Yesterday, we learned that it would cost $720 billion over the next decade, and perhaps would even go to $1 trillion. A lot of us in the Senate, frankly, were not too surprised because the legislation doesn't allow for the use of cost containment strategies that are utilized in the private sector.

To me, it is incomprehensible, for example, that Medicare, with all of its bargaining power, wouldn't use the same kind of clout that a timber company does in Alaska or Oregon or an auto company in the Midwest or any other big purchaser. Under this law as it is constituted today, what Medicare does is the equivalent of standing in the price club and buying toilet paper one roll at a time. There is absolutely nobody in the United States who goes out and purchases that way. What Medicare is going to be doing just defies common sense because we all know that if you buy more of something, whether in Oregon or in Alaska or anywhere else, you say, Let us try to negotiate a better deal. But Medicare is not allowed to do that under current circumstances.

I have come today to say that in addition to the debate about how the numbers are crunched, what we ought to be doing is working on a bipartisan basis to ensure that we have real cost containment in this program that seems to grow in costs almost by the day. I have worked with Senator Snowe for more than 3 years on legislation to do that. We have introduced it. It has bipartisan support.

On our side of the aisle, Senator Feinstein and Senator Feingold were original sponsors. Senator McCain joined Senator Snowe and me in this bipartisan effort. We simply believe that at a time when we are seeing so many Government programs cut and reduced and tremendous financial pressures for belt tightening, we shouldn't leave seniors without even the kind of private sector bargaining, the kind of private sector cost containment power that we see in communities all across the country.

I will tell you, I can't for the life of me figure out why Medicare shouldn't have the power to be a smart shopper. As it stands today, everybody in the United States tries to be a smart shopper instead of Medicare.

What I would like to do for a couple of moments is try to lay out the legislation that Senator Snowe and I have spent so much time working on and why I think it is particularly critical right now.

For a senior who lives in rural America where there may be only one private plan serving that area--and maybe there is no private plan at all--that senior is likely to be part of what is called the fallback plan. As of now, all of those seniors in those small communities, many of them in Arkansas--I see our distinguished colleague has joined us; like me, she vetted for the law. We would like to see people in Arkansas and Oregon, in areas with large, rural populations, have some bargaining power the way smart shoppers would. Under the Snowe-Wyden legislation, we say that the seniors in those fallback plans could in effect be part of a group that could use private sector bargaining power in order to hold costs down.

Many of us also represent the larger cities. I have Portland, but we want to hold down costs in Miami, New York, and Chicago. These people might have a choice of larger health programs to try to deal with their benefits.

Maybe they are in a managed care organization or what is called a PPO, preferred provider organization. However, these private entities ought to have some bargaining power to hold down the cost for all of their members. Our bipartisan legislation that I have with Senator Snowe and Senator McCain stipulates we can have bargaining power for seniors in those metropolitan areas as well.

This legislation is going to save taxpayers money as well, not just seniors but taxpayers because, as the Senate knows, we put out a substantial amount of money to offer assistance to employers to not drop their coverage. When the Medicare plans save seniors money on medicine, that means less cost for the retiree plan to make up. Containing costs on the Medicare side, in our view, will help keep costs down for employers insuring retirees as well.

We have an opportunity to get beyond the debate about the numbers that came out in the last day or so, these shocking numbers that Medicare prescription drug care will cost $720 billion. We can get beyond those numbers and go to a comprehensive, bipartisan, market-based cost-containment strategy, a bipartisan plan that will contain costs for rural and urban seniors in plans across the country, in plans in rural and urban areas, and a plan that will also provide cost containment for employers insuring retirees as well.

It is our view we desperately need some common sense as it relates to cost containment for prescription drugs in our country. It is my view that giving bargaining power to millions of seniors through the private sector is essentially Economics 101. There is no sense waiting when the costs of this program go up almost daily. It started at $400 billion, then $500 billion, now we are at $720 billion, and we are still counting. With these costs continuing to go through the stratosphere, the choice for the Senate, in my view, is to either sit around and say we will just wait and see what happens--and maybe the next report will put this at $1 trillion--or we can take the opportunity in a thoughtful, bipartisan way to do what is being done in communities all across the country.

Virtually everyone who buys in quantity says: Excuse me, wouldn't you be willing to give me a break given the fact I am making additional purchases? Medicare is not doing it. It defies common sense. We have a bipartisan opportunity to reign in these costs that continue to soar. I hope the Senate will do this as soon as possible.

I yield the floor.

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