SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 849 words

COMMITTEE: HOUSE TRANSPORTATION AND INFRASTRUCTURE

HEADLINE: TRANSIT SYSTEM BENEFITS

BILL-NO:  
H.R. 4680             Retrieve Bill Tracking Report
                      Retrieve Full Text of Bill

TESTIMONY-BY: RAYMOND V. GILMARTIN,, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER,

AFFILIATION: MERCK & CO., INC., WHITEHOUSE STATION, NEW JERSEY

BODY:
Statement of

Raymond V. Gilmartin, Chairman, President and Chief Executive Officer, Merck & Co., Inc., Whitehouse Station, New Jersey

Testimony Before the House Committee on Ways and Means

Hearing on Integrating Prescription Drugs into Medicare

April 17, 2002

Mr. Chairman, Mr. Rangel, members of the Committee, I am pleased to have this chance to appear today to discuss Medicare prescription drug coverage.

At Merck, we believe that it is not enough to discover new medicines. We have to make sure that they get to those who need them.

Medicines change lives and increase life spans. Medicines can now control common illnesses in later life that once meant certain death, such as diabetes and heart disease. Work in Merck laboratories today holds great promise for creating tomorrow's medicines. These are medicines we need to prevent and treat Alzheimer's disease, HIV/AIDS, cancers, depression, and other illnesses that can rob us of our independence and prematurely take our loved ones from us. Sadly, for those seniors and disabled persons without good drug coverage who cannot afford the medicines they need, the promise of medicines is unfulfilled. These people also lack the coordination of care that comes with good coverage. Consequently, they may take medicines in dangerous combinations or at dosages that actually jeopardize their health and quality of life.

Our seniors deserve better. That is why Merck so strongly supports action this year to add prescription drug coverage to Medicare along with other changes to the Medicare program to improve its administration and competitiveness as well as better coordinate care around the patient.

All Medicare beneficiaries should have a choice of private-sector comprehensive health plans that include drug coverage. Those choosing to remain in the traditional Medicare program should be able to get drug coverage through competing, private-sector prescription drug plans.

We understand that a critical question facing this Committee is how best to deliver a quality prescription drug benefit while containing its cost. As a pharmaceutical manufacturer, we hear the concerns of employers, governments, and ordinary citizens about the cost of medicines. As a provider of pharmaceutical benefits to more than 65 million Americans, including more than eight million seniors, through our subsidiary Merck-Medco, we also understand the challenges of cost containment.

We believe that the answer to the cost containment question has profound implications, not only for taxpayers and Medicare beneficiaries, but also for the future health of patients and America's research-based pharmaceutical industry.

Merck supports allowing providers of Medicare prescription drug benefits to use a full range of clinically-appropriate, cost containment strategies. Specifically, Merck supports giving competing, private prescription drug plans the ability to engage in tough price negotiation with pharmaceutical companies. Plans must have the ability to encourage the use of the most cost- effective, appropriate medicine - whether that medicine is a brand or a generic.

We also believe that prescription drug benefit providers who serve Medicare beneficiaries should have financial incentives that ensure that they fully use these cost containment strategies. The best way to accomplish this is, first, to have prescription plans compete with each other to enroll beneficiaries based on quality and premium cost and, second, to put these plans at some financial risk to contain costs. These strategies will subject our medicines to tough scrutiny and ensure that their price reflects their value in treating disease and improving health.

We are encouraged that the major proposals under consideration for providing prescription drug coverage to Medicare beneficiaries have rejected the alternative path for cost containment - government price controls. Having government officials determine which medicines will be available and at what price, through price setting, reference pricing, mandatory rebates or other bureaucratic tools, is a sure path to impeding pharmaceutical research. Throughout the world, price controls have proven ineffective in controlling overall costs or improving patient health.

Mr. Chairman, we hope that the Committee will look to the work of the Bipartisan Medicare Commission as the best guide to needed Medicare modernization. We also support the ideas contained within the Breaux-Frist plan, this Committee's own H.R. 4680, and President Bush's Medicare proposals. These are strong building blocks for action.

At Merck we believe it is possible to craft a Medicare prescription drug benefit that meets the needs of our nation's seniors and persons with disabilities while maintaining an environment that rewards success in new drug discovery. Such an environment will allow Merck and others to continue to lead the world in inventing the medicines that improve and save lives.

Thank you again for this opportunity to present our views and I look forward to your questions.



LOAD-DATE: April 18, 2002