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Prescription Drugs

Location: Washington, DC

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

Ms. STABENOW. Mr. President, I rise today to speak to the Medicare prescription drug benefit. I have a different view, and the Michigan seniors and people with disabilities who are trying to access this program have a different experience and view than my friend from Texas.

As I said yesterday, I think it is incredibly important that we join with the House of Representatives to do the first step, which is to require negotiation for the best price on prescription drugs through Medicare. I also know there is incredible confusion, that seniors have been offered a variety of private choices but not the one that most seniors asked for, which is to be able to go through Medicare and sign up as they do for Part B and the rest of Medicare and get a good price. I also know there is great concern from seniors who find themselves in this gap, somehow being called a doughnut hole, but the gap in coverage where you continue to pay a premium but don't receive any help. There are a number of concerns I hope we are going to address.

Number 1 needs to be to say clearly that we want the Secretary to negotiate the best price for people. Right now, as we know, the law actually prohibits, actually stops the Secretary from using the bargaining power of all of the seniors and the people with disabilities on Medicare to be able to get the best price. Why in the world does that make sense? In fact, it doesn't make sense--particularly for something that is lifesaving; it is the major way we provide health care today from a preventive and maintenance standpoint, as well as in a crisis.

There are huge differences between the way the Veterans' Administration successfully serves our veterans and what is being done through, unfortunately, inflated prices through the Medicare system that not only seniors are paying, disabled are paying, but taxpayers are paying as well.

Yesterday, I talked about a report--and I want to talk to that today--from Families U.S.A. released last week, which looked at 20 prescription drugs commonly used by seniors. The results are startling. The report compares the prices the private Medicare Part D plans charge and the prices obtained by the VA, which negotiates for low drug prices on behalf of America's veterans.
It showed, again, what we have been seeing over the past year: For each of the top 20 drugs prescribed to seniors, the lowest prices charged by any of the top private Part D providers are higher than the price secured by the VA. It is not just a little bit higher, but in many cases it is astoundingly higher.

Let's look at some examples. I am mentioning specific drugs, not to pick on particular drugs, but we talked about the fact in the committee that transparency, the ability to compare price, and the ability for people to know what they are purchasing is very important. This is something we want the Secretary, on behalf of the people of America, to be doing--looking at the differences in these prices, and the particular points where there is a wide disparity, using their negotiating power to be able to step in on behalf of seniors and the disabled.

When we look at Zocor, which I mentioned yesterday--the drug many seniors use to control their cholesterol levels--the lowest VA price for a year is just over $127. The lowest price under a private plan is $1,485.96--over a 1,066-percent difference. That is astounding. I argue that you could still continue to work with the Federal Government and partner to do research and bring that price down.

Why should seniors pay $1,359 more in a year for this particular prescription drug than veterans do? It is exactly the same drug.

Now, I also mentioned Protonix yesterday. It is the same thing. We are looking at $214.52 for a year, the VA price, negotiating the best price, and $1,148.40 with the lowest Part D plan, a difference of 435 percent.

It is the same thing as we go through the next one, which is Fosamax, which is a 205-percent difference, and on down.

We are talking about substantial differences in price--some smaller than others. But the reality is negotiation works. All we have to do is look at the fact that, on average, we are seeing a price difference of 58 percent between the Veterans' Administration and what is happening from the lowest possible plan with the top 20 most prescribed drugs for our seniors. In other words, for half of the drugs our seniors need most, the lowest price charged is almost 60 percent higher, and it is not demagoguery to say people are choosing between food and medicine. It is not. It is not an exaggeration to say that right now somebody is sitting down and deciding: am I going to pay the heating bill or get the medicine I need? That is the reality for people. We need to have a sense of urgency about fixing this.

I also want to speak to the fact that we have heard a lot about the VA. Unfortunately, we have heard things that are not true, according to information from the Veterans' Administration. Yesterday, I was asked if I knew there were well over 1 million veterans who moved to Medicare Part D. The assertion was made that veterans were leaving the VA because the VA could not give them the drugs they wanted. I knew there were veterans who were adding Medicare Part D coverage. We went back to look and see what that was all about after I received that question. In fact, approximately 280,000 veterans have signed up for Medicare. They are not leaving the VA. In fact, it is not even clear that they are getting any drugs through Medicare at this point. They may have done it to add extra coverage. We are not sure what that mix is, but we are not talking about a million veterans or more running to leave VA because it is such a bad program.

Moreover, according to both the Government Accountability Office and the Institute of Medicine, the VA system is working well. According to the GAO, an overwhelming majority of VA physicians report that the formulary, the grouping of drugs that are available, allows them to prescribe drugs that meet their patients' needs.

The Institute of Medicine has reported that veterans believe their needs are being met. Access to drugs is an issue in less than one-half of 1 percent of the complaints about the VA health system. One-half of 1 percent relate an inability to be able to get the medicine they need.

I also need to point out that at our Finance Committee hearing last week it was mentioned that there are fewer drugs available to our veterans. In fact, we have heard it today on the floor. That is exactly the opposite of what is true. The VA actually has more drugs on its formulary, its list of available drugs. I have not heard anybody say, first of all, that we should take the VA system and impose it on Medicare. But there is a lot of misinformation about what is happening in the VA and what is happening for our veterans, and there is a lot we need to do to focus on the reality and the facts of the huge disparities, an average of 58 percent, and the highest is over 1,000 percent.

I find it very interesting that, on the one hand, we hear two different kinds of arguments occurring. One is that negotiation will make no difference in price. On the other hand, we hear we will lose lifesaving research because of negotiation. Those two arguments don't fit together, even though they are being made by the same people. We don't have to worry about research and development if, in fact, negotiation doesn't lower prices. I argue--and I think common sense dictates--that when you are looking at a 1,000-percent difference in price, at the fact that the American taxpayer is contributing, on average, at least as many dollars for research as the brandname industry is--overall, at least contributing that, because we want the lifesaving drugs--when you look at all of the facts, it doesn't add up; it doesn't add up for anybody but the industry itself to be able to argue that they want to keep the prices this high. I appreciate that. Any industry that has such a significant advantage certainly wants to fight to keep it. But I am very hopeful we will join with the House in saying this is lifesaving medicine, it is not an optional product, and we have to get the best price for our seniors and for the disabled in America.

I thank the Chair.


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