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Public Statements

Cost of Prescription Drugs

Location: Washington DC

June 2, 2004
Ms. STABENOW. Mr. President, I first thank my colleague and friend from Minnesota for his eloquent remarks today. I certainly agree with the sentiments he has expressed. I personally thank him for his personal commitment and willingness to help fund ways for people in Minnesota to be able to lower their prescription drug prices. I think that speaks to his personal dedication and willingness to do whatever he can to help.

Ronald Reagan asked the question back in 1980, "Are you better off than you were 4 years ago?" When it comes to the issue of prescription drugs and the cost of medicine today, certainly the answer to that is no.

I rise today to discuss the new Medicare Drug Card Program, as my colleague and friend from Minnesota has done. Yesterday, Tuesday, was the first day these cards could be used. But by any measure, this attempt to lower drug prices has been a complete failure. We can do much better. We can give our seniors real savings if we make the commitment to do that. Simply put, when it comes to Medicare, we need to do it again and we need to get it right.

From the beginning, the drug card was designed for the pharmaceutical companies and not for our seniors. That is one of the reasons why there is an estimate that the drug companies will receive over 8 years $139 billion in new profits because of the new Medicare law.

That doesn't add up if the purpose is to lower prices for our seniors. Obviously, $139 billion in new profits demonstrates this is not about lowering prices. First, because the law provided no guarantee and no guaranteed savings for seniors, drug companies were free to inflate their prices before the discount cards were issued. Therefore, companies were free to raise their prices in the last year or two in excess of any possible discount seniors might receive from these drug cards. In fact, the prices of 14 of the top 30 brand-name drugs rose more than 5 times faster than the rate of inflation from 2003 to this year, virtually wiping out any discount a senior might receive from one of these Medicare cards. That is like a department store taking up its prices 50 percent and then putting a sign out front that says 25 percent off. If you think about it, you are not going to save any money; you are actually paying more.

Second, the new law gives the companies that distribute the Medicare cards complete flexibility to change their prices every 7 days but forces seniors to lock into one card for an entire year. That means you might pick a particular card because it offers you a lower price on medications that you take, and then in 7 days, maybe even before you use the card, the price of that drug has gone up or two or three of the drugs you are taking have gone up. That might make the card absolutely useless, even though seniors may have to pay up to $30 to sign up for the card.

Also, we know that every 7 days the discounted drugs can be changed. So you wade through all of these cards, over 70 cards, to figure out the one that covers the most medicines you use and provides you some kind of help with lower prices. You purchase that card. You spend $30. You purchase a card, you lock yourself in for a year, and then you find out 7 days later the drugs you use are no longer on the list. Who does that benefit? Who is better off under this Medicare bill? Certainly not our seniors. We can do much better. We need to do it again and do it right. This new Medicare bill needs a complete overhaul.

There are two ways we can lower prescription drug prices for seniors and all Americans if we do this right. We have two ways right now we can fix this situation. First, we simply need to pass bipartisan reimportation legislation supported by people on both sides of the aisle in both the House and the Senate. We have a very strong bipartisan coalition to allow Americans to buy American-made FDA-approved drugs from other countries such as Canada. All of us could then save much more on prescription drugs than the small savings from the Medicare drug cards.

Second, we can and should allow Medicare to negotiate directly with the drug companies on behalf of our seniors and the disabled to get the lowest possible price.

Why on Earth wouldn't that be the first thing we would do? Right now States, Fortune 500 companies, large pharmacy chains, and the Veterans' Administration use their large bargaining clout to obtain low drug prices. Common sense says Medicare should be doing it.

Regrettably, the only entity in this country that cannot bargain for lower group prices is Medicare. Why? Who benefits from that? Who benefits from locking in up to 40 million people forced to pay the highest prices? Certainly not our seniors and the disabled.

Because the supporters of the drug industry in Congress at the eleventh hour inserted into the final Medicare bill a special interest provision that strictly prohibits Medicare from getting group discounts, our seniors are paying top dollar.

We know the drug companies are powerful. We know they have over six lobbyists for every one Member in the Senate. We can do better, and people expect us to do better than this new law and these cards.

If we want, we can provide real savings for Americans. I wish to point to charts to demonstrate with a couple of medications what the differences are.

Right now for Lipitor, which lowers cholesterol, if we were to do a group discount, such as the Veterans' Administration does, our seniors would pay $40.55 for a month's supply. If we were to open the border to Canada and allow trade, as we do for everything else, back and forth between Canada and the United States, we would be able to get that price down to $35, from $40.55 to $35.04. However, if we continue with this current Medicare card, the low end is $64.67 up to $74.77. This makes no sense.

Right now people are being told to go out and sign up for a Medicare prescription drug card that will require them to pay more than we could get for them if we simply negotiated group prices or open the border to Canada.

Another demonstration: Norvasc, which controls high blood pressure. Again, with the VA, for a little over $25, you can get a month's supply; Canada, $28. But under the so-called discount card, it is anywhere from $41 to $49. These numbers just do not add up, and the seniors of this country, as well as all Americans who would benefit by opening the border and allowing us to do business across the border, are saying to us: Do it again, and do it right.

One more example: Protonix, which treats ulcers and other stomach conditions. If we were to negotiate a group price, as does the VA, the individual out of pocket would pay $26.83, and through Canada, $41.60. Under these new cards, they would pay from $86 to $108. It just does not add up. These numbers do not add up for our seniors or for anyone who is struggling to purchase medicine or to keep up with the incredibly high and rising prices of their health insurance because we know this is a major driver.

In conclusion, are you better off than you were 4 years ago under this Medicare law? We need to change it, and we need to get it right.

The PRESIDING OFFICER. The Senator's time has expired.

Ms. STABENOW. I thank the Chair.

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