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A Great Injustice

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Location: Washington DC


A GREAT INJUSTICE

The PRESIDING OFFICER. The Senator from Michigan is recognized for 7½ minutes.
Ms. STABENOW. Thank you, Mr. President.

I first want to thank my friend from Illinois for his usual eloquence, and our leader and others who have spoken about what has been happening under an administration that chooses to fight those who state their opinions, face the facts, and give us information rather than working with us to make sure we have the best information; working with us to make sure the decisions we make are the right ones.
MEDICARE

Ms. STABENOW. Mr. President, I want to speak about Medicare today, and the fact that one of those who stood up and was prepared to give us information is the Medicare actuary Richard Foster.

We now know he was told if he gave up information about the cost of the Medicare bill that passed last year before we voted on it, he would face being fired. We have heard this repeated over and over in different ways about people who had the courage to stand up and disagree-or in this case a career public servant who was trying to do his job.

We find now on this Medicare bill that as we look more closely, over and over we are deeply disturbed by what has unfolded relating to the Medicare bill.

As I indicated over and over on the floor before we passed the final version, this is clearly about what is in the interest of the pharmaceutical industry and the insurance industry in this country-not in the best interests of seniors, not in the best interests of consumers or taxpayers. Piece by piece, we are seeing major flaws in this law; in fact, so much so that we are seeing comments from colleagues. Our colleague from Mississippi, Senator Lott, has indicated now if it were to be done over he would in fact change his vote. I wonder how many others would be doing the same thing given what we have found.

This law does nothing to lower prices for Medicare recipients and families, which should be one of the primary goals. That should have been at the top of the list for us to do. Despite the passage, in fact, of something that would lower prices-what we call the reimportation of prescription drugs or the ability to allow the local pharmacist, say, in Michigan or across the country to do business with pharmacists in other countries such as Canada to bring back prescription drugs at half the price; most of them are made in the United States, and American taxpayers helped subsidize the research to make them. But instead of allowing that to happen-to lower prices, in fact, up to 70 percent in some cases-we saw nothing in the final bill.

The law prohibits the Medicare program from using its purchasing power to lower prices, which is stunning. What organization doesn't want to purchase in bulk in order to lower prices? Yet the Medicare legislation that passed specifically prohibits that from happening. There is only one group that benefits from that.

The law, as we know, would also lead to about one in four retirees losing their private coverage, if they have retiree coverage, given the way it is designed. My latest concern relates to what is happening with the discount cards in the legislation.

One thing we thought at least would be helpful-not as much as allowing us to bring back lower cost prescription drugs from Canada and from other countries, but something we had hoped would help a little bit-would be the discount card that was put in place which was supposed to provide from a 10 percent up to a 25-percent discount on prescription drugs.

But just as Health and Human Services announced which companies would be providing the discount cards, we also learned the meager savings these cards might offer is being eaten up by the continued explosion in prescription price increases.

As reported in the Wall Street Journal, the prescription drug provision for our seniors and the disabled increased nearly 3½ times faster than the overall inflation rate in 2002. Because there are no checks or controls or accountability on these prices, the discount cards are very vulnerable to gaming by the pharmaceutical industry.

What do I mean by that? For example, the wholesale price for Lipitor or Zoloft went up 19 percent in the last 2 years. The pain reliever Celebrex went up 23 percent. Their producer has said these increases are among the most moderate pricing in the industry.

We are seeing great increases so that any kind of a discount now will be based on an inflated price, not providing relief for seniors.

I am very concerned. We are hearing from Families USA, which we know is a consumer health care advocacy group. They have now laid out four concerns they have which I will share regarding discount cards.

Their first concern is they say neither the new law nor the legislation specifies the base price on which the discounts will apply. Gains in the base price are going up dramatically, and we are going to give a 10 or 15-percent discount, or even a 30-percent discount. But the price has gone up 40 percent. You are not getting much of a deal.

Second, under the Discount Card Program, sponsors are required to pass on to cardholders only an undefined share of the rebates they get from drug manufacturers, and they can keep the remaining savings as profits. They are not required to pass on the entire amount of savings from the manufacturers to our seniors.

I know our leader Senator Daschle has a bill that would correct that, of which I am cosponsor, and I hope very strongly we will be able to pass it.

The regulations foster, in fact, also what is called bait-and-switch schemes so that people go into a particular card, and then things are switched. What is amazing is while the senior is locked into a specific card for 7 days, the size of a discount can change. Seniors are locked in but the provider is not.

Finally, there is a $600 credit, which is positive for low-income seniors, that is applied to these cards. However, with the low-income asset tax and new, very cumbersome paperwork involved, we are not sure how many low-income seniors will actually receive the discount.

We can do better than that. If we were simply to do what the House of Representatives did in a strong bipartisan vote a number of months ago, we would be able to immediately drop prices at least in half with reimportation.

I urge my colleagues to get serious and pass that bill.

Thank you, Mr. President.

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