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   The SPEAKER pro tempore. Under the Speaker's announced policy of January 3, 2001, the gentleman from New Jersey (Mr. Pallone) is recognized for 60 minutes as the designee of the minority leader.

   Mr. PALLONE. Mr. Speaker, I am pleased to say that I will be joined this evening by some of my Democratic colleagues as we discuss the need for a real Medicare prescription drug benefit.

   I have been on the floor many times in the evening during Special Orders criticizing the Republican leadership in the House because of their failure to address the issue of prescription drugs and even bring a bill to the floor. So I want to start out by saying I hoped since they have promised that they are going to bring up a prescription drug bill to the floor of the House before the July 4 recess, which would be by this Thursday or Friday, I am hopeful since they made that commitment to do so that we will see some bill come to the floor, and there will be a debate on the prescription drug issue by end of the week.

   I am still somewhat skeptical that we are going to see that from the Republican leadership because initially they said this was going to happen Wednesday, and now we hear Thursday and now we hear maybe even Friday. So certainly if they do not bring up the bill at all, they should be seriously chastised for doing that since they promised it for 2 months.

   But even if they do bring it up, my great disappointment and that of my Democratic colleagues is that it is a sham proposal. It is not a bill that will provide any benefit or certainly any meaningful benefit to any senior citizen. And let me just explain why and very briefly raise two, I think, very major points. One is that the Republican bill is not a Medicare proposal. We all know that for many years since the mid-60's when Medicare was first signed into law that Medicare has been a government program that has provided senior citizens, every senior, with a guaranteed benefit for their hospital care and a guaranteed benefit for their physician's care. The bottom line is it works. It is a government program that works.

   Well, the Democrats have been saying, if we have a program that works like Medicare, then just expand it to include prescription drugs. And our proposal is very much like part B right now that pays for the doctor bills. There is a defined guaranteed benefit under Medicare. Everyone gets it. There is a very small premium, $25 a month, a low deductible of $100 a year, and 80 percent of the cost of the prescription drugs are paid up to $2,000 out-of-pocket, in which case 100 percent of the prescription drug bills are paid.

   We have a very effective cost-control pricing mechanism that says that since there is now 30 to 40 million seniors under Medicare, that the Secretary of Health and Human Services has a mandate to negotiate lower prices on behalf of this large pool of senior citizens to bring prices down.

   The Republicans have gone just the opposite. Rather than provide a Medicare benefit, rather than continuing and expanding the Medicare program to include prescription drugs, all they are proposing, if it even comes to the floor this week, is to throw some money to private insurance companies hoping that these insurance companies will offer some kind of drug policy to senior citizens. And we know that the insurance companies are saying they are not going to provide these kinds of drug policies because they have never existed before.

   And even if they do, there is no guarantee seniors will be able to buy one, what the premium is going to be, whether they will get certain prescription drugs, nothing, and no mechanism in the Republican bill to deal with the issue of price and trying to reduce costs. In fact, there is actually language in the Republican bill that says that the administrator of the program cannot interfere in any way and try to reduce costs or reduce prices.

   So we have here a sham proposal on the part of the Republicans. I hope they bring it up. I hope we have a debate by the end of the week on the prescription drug issue, because we have not had it for almost 2 years as this Congress draws to a close. But when they bring it up, we are going to have to show there really is no benefit at all and no proposal at all.

   Mr. Speaker, I yield to my colleague from Ohio, the ranking member on the commerce Subcommittee on Health, who has been an outstanding spokesman on this issue and who has really fought very hard to make sure that we get a real Medicare prescription drug proposal.

   Mr. BROWN of Ohio. Mr. Speaker, I thank my friend from New Jersey, who has been, as a member of the Subcommittee on Health has helped to lead the charge on all these issues in the last couple of years as Congress, some of us, have moved towards a real Medicare benefit.

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   I want to sort of build on what my colleague has just said. Our plan, the Democratic plan, a Medicare

   prescription drug benefit, is administered by a program that Americans have learned to trust in the last 37 years, the Medicare program, while the Republican plan subsidizes the insurance companies to set up a Medicare prescription drug private insurance HMO plan. And we know how HMOs have treated seniors throughout this country over the last 5 years. Our plan, again, is a Medicare benefit. Their plan sets up drug company HMOs.

   Now, let us for a moment again compare the two plans. The Democratic plan has a $25 premium, the Republican plan, the premium is undefined. The premium will be set by insurance companies. And if what has happened in the States is any indication, the premium could be as high as $70 or $80 or $90 a month. The Democratic plan has a $100 deductible. The Republican plan, again set by the insurance companies, will have a deductible of at least $250. The Democratic plan, while there is a 20 percent copay for the first $2,000, the Republican plan has a 20 percent copay for the first $1,000 then a 50 percent out-of-pocket cost copay for seniors the next $1,000. Then, at $2,000, the Democratic plan will cover all drug costs from there on up. The Republican plan covers no drug costs for the next $1,800. So if a senior's drug bills are $4,000, $5,000, $6,000, they are out of pocket thousands and thousands of dollars in the Republican plan.

   But the ultimate comparison is look what has happened with this issue. The Republican plan is written by the drug companies. It is clear the drug companies are very happy with the Republican plan. In fact, in The Washington Post last week, and I quote, ``A senior House Republican leadership aide said the Republicans are working hard behind the scenes on behalf of the drug industry to make sure that the party's prescription drug plan for the elderly suits drug companies. Republicans favor a private sector solution to lowering drug costs,'' and on and on. But I will say it again, a senior House Republican aide said the Republicans are working behind the scenes to make sure the plan, the drug plan for the elderly, suits the drug companies.

   The Democratic plan was written with input from the AARP, from consumer groups, from all kinds of senior citizen organizations that want to see seniors benefit from this plan. The Republican plan was written by the drug companies so that drug companies benefit.

   The logical question then is, why would the Republicans do that? Well, last week, as my colleague, the gentleman from New Jersey (Mr. Pallone), saw as a member of our committee, right in the middle of the markup, right in the middle of hearing amendments and working on this legislation, the Republicans, on Wednesday evening at 5 p.m., and we usually work much later than that when we are doing important pieces of legislation, at 5 p.m. the Republicans adjourned the committee so they could go off to a fundraiser underwritten by Glaxo-Wellcome, a British pharmaceutical company, to the tune of $250,000 and supported by other drug companies.

   PhRMA, the trade association for the drug companies, committed another $250,000; other drug companies put in $50,000, $100,000, and $250,000. So that the drug industry was pumping literally well over $1 million into this fundraiser. And so we stopped working on the drug bill at 5 p.m. and the Republicans went to this fundraiser underwritten by America's drug companies, the world's drug companies, Glaxo-Wellcome, Bayer, and others from outside the United States.

   Then the next day the Republicans returned to the committee hearing and voted consistently in support of the Republican prescription drug plan programs and consistently in support of what corporate interests, what the drug companies wanted.

   As an example, I had an amendment that no Member of Congress should get a better benefit than senior citizens; seniors should have the same prescription drug benefit as Members of Congress. The drug companies did not want that, so the Republicans voted down the line against that amendment that says to the public senior citizens, sorry, your drug benefit is not as good as a Member of Congress.

   Other amendments, offered by the gentleman from New Jersey (Mr. Pallone), by the gentleman from California (Mr. Waxman), by the gentleman from Wisconsin (Mr. Barrett), by several on the committee, by the gentlewoman from California (Mrs. Capps), also were voted down by the Republican majority because the drug companies did not want them. Anyone sitting in that committee with a scorecard could have written a column that reflected senior position, drug company position, and every single time the Republicans went with the drug company position. Every amendment, on rural health, on how to control and bring down prices of prescription drugs, on closing what is called the donut hole, or the gap, where prescription drug benefits simply end in the Republican plan at $2,000, one issue after another the Republicans checked the box on whatever the drug companies wanted.

   The kind of money that the Republicans raised from the drug companies last week is scandalous. The kind of money Republicans raised from drug companies and then turned around and voted the Republican line is absolutely outrageous. Americans need to speak out, tell the Republicans in this body how ashamed they are that they would take that position and vote the drug company line after pocketing literally millions of dollars from drug company interests.

   Until the Republican leadership in this Congress gets its act together and realizes this drug bill should be for seniors, not for drug company interests, Americans are going to continue to see the kind of stalemate here that has happened.

   I just urge people in this country to understand where each party sits. The drug companies and the Republicans are on one side, seniors and Democrats are on the other side. And that is why this Thursday or Friday, when we vote for this, it is important that this House pass the Democratic substitute which gives a real benefit, which limits prices that drug companies charge so they cannot continue to charge Americans more than they charge the British and the Japanese and the Germans and the French and the Canadians and the Israelis and everybody else on Earth.

   The fact is it is an industry that is the most profitable industry in America. They pay the lowest tax rate of any industry in America, U.S. taxpayers help to fund research and development, and the drug companies turn around with their Republican friends in Congress and continue to stick it to the American public.

[Time: 19:45]

   I thank the gentleman from New Jersey (Mr. Pallone) for the good work the gentleman has done on this legislation.

   Mr. PALLONE. Mr. Speaker, I thank the gentleman for his comments. He articulates so well the price issue.

   I have to say during that Committee on Energy and Commerce markup, there were two things that we realized over and over again. One is the Republicans were never going to put this program under Medicare because they are ideologically opposed to Medicare because they see it as a government thing, and they were not going to do anything to effect price reductions.

   Mr. BROWN of Ohio. Mr. Speaker, Republicans want Medicare to take a right turn, and that right turn is to expand health maintenance organizations, to deliver the prescription drug benefit through a privatized HMO/insurance system. We want to see Medicare remain a public program and deliver the drug benefit the way it delivers hospital benefits and physician benefits. The Republicans want to put Medicare back into a private insurance scheme just like HMOs and put the prescription drug coverage into that same scheme to privatize the greatest government program in history, Medicare.

   Mr. PALLONE. Mr. Speaker, we know when Medicare began under President Johnson it was because the private sector was not able to provide health insurance that was affordable for most American seniors. That is why the program was set up, not because we wanted a government program or we thought a government program was superior, but because the private sector was not providing any kind of affordable health insurance that most seniors could buy.

   I want to develop a little bit what the gentleman from Ohio (Mr. Brown)

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   So everything is being done by the Federal Government to make sure that they get a nice profit, whether it is money for research, whether it is preventing importation of foreign drugs, whether it is the patent exclusivity that they get, or the advertising break that they get through the Internal Revenue Code, and there are probably many other things that I could mention as well.

   On top of that in terms of tax breaks and money and exclusivity of patents, even with all that help, they still want the American people, they want to charge the American people the highest drug costs in the entire world. That is not fair. That is why the Democrats are saying an important part of this prescription drug plan that we should pass here has to address the price issue. Otherwise, prescription drugs will be unaffordable and the Federal Government will not be able to afford a prescription drug plan that will actually help senior citizens.

   I want to reiterate how important the price issue is. The Democrats in our bill, because we have our prescription drug program under Medicare, language that mandates that the Secretary of Health and Human Services take the 30 or 40 million seniors that are now part of the Medicare program and negotiate lower prices for them. He has the power with all these seniors to do the type of negotiation that would reduce prices because he can bargain. The Republicans not only have nothing like that in their bill, they have a clause, and I want to mention it briefly, in their bill called noninterference.

   It specifically says that the person who administers the prescription drug program under their legislation cannot in any way require or institute a price structure for the reimbursement of covered outpatient drugs or to interfere in any way with negotiations between these private insurers and the drug manufacturers or wholesalers or other suppliers of covered outpatient drugs.

   So the Republicans, contrary to the Democrats, are so concerned that under whatever program they have that somehow prices would be reduced, that they actually put

   in language to say it is not possible for the administrator of their prescription drug program to do anything to bring costs down. It is unbelievable how much they are willing to do the bidding of the drug industry because of the amount of money that they get from the drug industry.

   Mr. Speaker, I yield to the gentleman from Massachusetts (Mr. Lynch).

   Mr. LYNCH. Mr. Speaker, I thank the gentleman from New Jersey (Mr. Pallone) and also the gentleman from Ohio (Mr. Brown) for their great work on this issue.

   Mr. Speaker, I am new to this Congress and I must say I had a handful of issues that I thought stood head and shoulders above all issues when I came to Congress; and one of those issues, quite frankly, that I think would greatly improve the quality of life for seniors in this country, America's greatest generation, would be to create a reliable and affordable drug benefit program under Medicare. That was my hope when I came to this Congress, and that is my hope tonight.

   However, I must admit to great disappointment in reviewing the Republican plan for prescription drugs. I think that we need to start from the very beginning. In 1965, when Medicare was created, I think that back then there was a good-faith, bipartisan effort to develop a plan that would indeed address the health concerns of a lot of our seniors. However, in 1965, the model for health care for seniors at that time, the paradigm, if you will, was for seniors to receive health care. It meant hospitalization in a great many respects.

   Nowadays, though, fast forwarding to go to what we have today, for many seniors, in order to achieve the goals of Medicare, we need to provide solid, reliable, affordable prescription drug coverage. Many medical benefits accrue to seniors now because of recent discoveries and developments by pharmaceutical companies who have done good work with their research. We need to provide access to those prescription drugs that offer a medical benefit. Today, to accomplish that, we need to have a plan under Medicare that is available to all seniors.

   Under the Republican plan, there are a number of problems. First of all, a senior citizen would have to go out and find an insurance company or a plan that would allow them to participate. There is an obstacle at the very beginning. I think many seniors who have tried to acquire Medigap insurance, things of that nature through a private insurer, find out those insurers are few and far between, and the cost is prohibitive. Also in this program there is a substantial premium for seniors who would participate in what the Republicans are proposing here.

   There is at least a benchmark premium of $35 a month, which is $420 a year, with a deductible of $250 a year. Under the Republican plan, the seniors would pay 20 percent of the first $1,000 and then 50 percent of the next $1,000. So if a senior has a regular and serious need for prescription drugs, the very people we are trying to help in this, there are substantial costs.

   In fact, the out-of-pocket premiums continue until that senior basically has reached the $3,800 a year mark. That is when the full government benefit through their plan would begin. Again, that is not under Medicare. So there are serious problems with that.

   I think this plan, the Republican plan, allows the seniors to be victims of low expectations. I think we can do better. I sit on the Committee on Veterans Affairs, and under the VA proposal, the pharmaceutical program under the VA, we have a straight $7 copay for seniors, for our veterans who participate under that program. It is indeed a model that we should use in providing the Medicaid prescription drug program under

   Medicare.

   Now, the way the VA does it, they use the collective weight of their purchasing power and they negotiate in a tough and competitive way with the drug companies. They end up getting a good deal for our veterans through good, hard-nosed negotiations, and that is the type of negotiations we should have with our drug companies on behalf of our seniors under Medicare.

   The very provision that the gentleman from New Jersey (Mr. Pallone) has pointed out, there is a provision under this Republican bill that actually requires the administrator not to interfere, not to go after discounts, and not to upset what the market would otherwise charge. I think that cuts the legs out from under this plan and under the administrator and prevents us from actually achieving what we are trying to do in this Congress.

   Mr. Speaker, we owe it to our seniors to provide for this drug benefit. This is what they need. We have a responsibility to provide it, and we should let nothing come in between ourselves and that goal.

   Mr. PALLONE. Mr. Speaker, I thank the gentleman for what he said. He brought up many important points, but there are two I want to develop a little more because I think the gentleman stated something so important.

   One, the gentleman is a member of the Committee on Veterans Affairs; and how it works with the VA, the administrator, because he has all of these veterans, he is authorized by Congress to negotiate prescription drug prices for the VA. I guess it is pursuant to the Federal Supply Schedule, and he is able to get huge discounts. I understand they are 30, 40 percent, sometimes more.

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   We actually had an amendment, the gentleman from Michigan (Mr. Stupak) had an amendment in the Committee on Energy and Commerce that was totally tied to the Federal Supply Schedule and that used the VA as his example. In other words, he wanted to put language in his amendment in the bill that would have said that the Secretary had to use the Federal Supply Schedule and do the same thing that the VA administrator did for all senior citizens.

   Not only was that voted down strictly on partisan lines with all of the Republicans voting against it, but they actually articulated that they did not want that type of negotiating power for senior citizens. I do not have the faintest idea why. There was some suggestion it was okay to do it for the VA because they fought for the country, but seniors should not be treated the same way.

   I wanted to point out that a lot of those seniors were also veterans, so that made no sense. Just to show how far they were willing to go to say they did not want any kind of pricing mechanism in this bill, they actually rejected an amendment by the gentleman from Michigan (Mr. Stupak) that would have modeled itself on the VA, the way the gentleman described it.

   The other thing that the gentleman said that was so important is the whole idea of prevention. In other words, the gentleman pointed out when Medicare started out in the mid 1960s, the reason it was set up was because most senior citizens had no health care. They could not buy health insurance.

   At that time, we primarily were providing through Medicare for hospitalization; and then later we expanded it to under Part B to cover doctor bills. But the reason we need this prescription drug benefit is because things have changed so much over the last 30 years. Now the prescription drug benefit is just as important as Part A for hospitalization and Part B for doctors' bills.

[Time: 20:00]

   I would venture, and you pointed out, and I know that the gentlewoman from Texas has said this before and the gentleman from Ohio has said this before, that if you actually provide a generous prescription drug plan under Medicare, where 80 percent of the costs are paid for by the Federal Government, which is what the Democrats do, because it is preventative, you will prevent the hospitalization, the nursing home care, the having to go to the doctors.

   We had a couple of our colleagues, the gentleman from Arkansas (Mr. Ross) who owns a pharmacy company and the gentleman from Arkansas (Mr. Berry) who is a pharmacist, two guys from Arkansas, they pointed out that someone will come into their pharmacy like on a Monday or a Tuesday morning and ask for a certain drug that has been prescribed by their doctor and be told, Okay. Well, that is $350. The person says, I can't afford it, walks out of the pharmacy; and because the town is so small where they are in Arkansas, they actually see that person in the hospital at the end of the week running up a bill for Medicare that is 10, $20,000. It makes no sense. We need to basically reform Medicare and include a prescription drug benefit, not put it outside Medicare, because we will save money if we do it. It is such a simple thing to explain to our Republican colleagues; and they just reject it because they do not like Medicare, and they certainly do not want any impact on pricing.

   Mr. LYNCH. I think you raise a great point. I think that there is also a sad reality. I just met with about 50 senior citizens in my district who are actually boarding a bus to go to Canada. There was a woman, Mrs. Morgan, who had just fought off her second bout with breast cancer and had been prescribed Tamoxifen, which if she bought it at her local CVS in my district, in and around the neighborhoods of Boston, it would have cost her about $1,500 per year. She was going to Canada to buy in one visit a year supply of that Tamoxifen for $155.

   There has got to be a better way. Even under the veterans plan, there are hard-nosed negotiations going on between the VA on behalf of veterans and the drug companies; and the drug companies while they are not happy with the negotiations as hard-nosed, they are making a profit. They are making a reasonable profit, however; and it allows the research to continue, it allows drug companies to continue to pursue what we will, I think, in a very short while see as really miraculous developments in terms of prescription drugs for many very debilitating diseases. We need to keep that initiative forward. But we also defeat our purpose if we pass a drug prescription program that seniors cannot afford, which is the great risk if the Republican plan prevails.

   I thank the gentleman from New Jersey for his kindness in allowing me to participate this evening.

   Mr. PALLONE. I want to thank the gentleman. I appreciate his remarks. I yield to my colleague from Texas who has been here so many times in the evening, oftentimes late at night, to make the point about how important it is that we have a prescription drug benefit that actually means something for senior citizens.

   Ms. JACKSON-LEE of Texas. I thank the distinguished gentlemen, first of all, as I listened to my colleague from Massachusetts for articulating so well what the obstacles and the crisis that we are in and what we face in this debate this coming week. I was in another meeting and I was called indicating that you were having this discussion on the floor, and I thought of several points and as I came in you were making some points that I would like to briefly pursue because in my heart, this hurts me.

   I want this benefit so much for our seniors. I do not want to seem as if I am exaggerating. I really want us to bring closure in a positive way to this issue because it has gone on for so long. I believe that so many of us have been in our districts so closely involved with our seniors who really have a personal crisis as relates to their medication. There are a multitude of examples of seniors having to leave the country. It is one thing to have to leave the State, but having to leave the country in order to secure the drugs that they need in order to live. Can I say that again? In order to secure the drugs that they need to live. That is what we are talking about.

   What I am concerned about is that there are those of us who believe that there is value to the pharmaceutical research that is done in this country, and I know the distinguished gentleman from New Jersey who sits on the Committee on Energy and Commerce also recognizes that we must have that kind of scientific research, pharmaceutical research, drug research, new drug research. No one is discounting that.

   One of the arguments being made by our friends in the pharmaceutical industry is that you are cutting our profit and we cannot do any more, if you will, far-reaching drug research to be creative in new drugs.

   I want to respond to that, because there are answers to that point. First of all, I think we should be concerned about senior citizens. I heard my colleague from Connecticut last week call them the Greatest Generation. But they have lived longer because of Medicare starting in 1965, in the mid-sixties.

   We now can provide a crowning touch to that because what we are seeing is that the life expectancy diminishes when they are not able to get the drugs as prescribed by their physician. The key element that I think is important about this particular provision of the Democrats is that our provisions are not voluntary. It goes through the Medicare trust fund. It provides 80 percent in Medicare coverage. It means that every senior who needs it will have a definitive benefit which they can utilize. And it will eliminate confusion and whether or not they have to make choices.

   This does not discriminate as far as I am concerned against our pharmaceutical companies. Why? Because they will have to use those drugs. And as was made very clear, and I think the gentleman from New Jersey made this point and I am convinced that he is right, that since this will be similar to part A and B or these provisions that come under Medicare, we will have the ability to see the maintenance decrease the cost of hospitalization that you do under A and B. And that in fact as they secure the drugs prescribed by their physicians, do the pharmaceutical companies not see a decided increase in utilization, because they will then be able to use the drugs prescribed.

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   My good friend knows that there is some rumoring and fear about generic drugs. There are some prescriptions, quite a number of them, that cannot be substituted by generic drugs. The physician wants the patient to take that particular drug. We know that. I know from my own parent, my own mom, that she takes drugs that are particularly prescribed by a particular drug company, a name brand, if you will. Look at the increase that will come with the ability to purchase and purchase the quantity that you need and at the same time provide good care for these seniors. Do our friends in the pharmaceutical industry not see the benefit and the profit for allowing the Democratic plan that has the higher percentage of value to go forward? And, by the way, providing, if you will, the same kind of compensation to providers, the hospitals and physicians, I think that should be noted, in the Democratic substitute, but providing that benefit that is not mandatory but it is part of the Medicare program which then gives them the automatic right and the automatic compensation, if you will, or income to be able to purchase those drugs. That is what I think is a point of contention that really should be enlightened upon, because I have always wanted us to come to the floor of the House with a bipartisan proposal that really works.

   It saddens me that we are now at a point where we are about to vote on this and we are voting politically. We are voting simply to make some group happy over here that needs to be happy and that is our pharmaceutical friends who believe they cannot be happy with this plan that provides the 80 percent coverage. I disagree with them. I wish they would look closely at this plan because I cannot imagine when you increase the population of purchasers how that does not increase the profit margin if we have to talk about that. I only talk about that because I do believe that the research of new drugs is important. None of us want to deny that or diminish that, but we have got to be realistic about the needs of our senior citizens. I do not believe a voluntary program, which I was willing to look at, by the way, I need to be very frank with the distinguished gentleman, wanted to look at it because I wanted something to work.

   I would almost say that how do you mesh them and make them work together? But the key is a voluntary program is less able to provide the benefit than a program that is under Medicare and provided by Medicare and funded by Medicare.

   And for those naysayers about the cost, all we have to do is put a moratorium or repeal the enormous tax cut that has really sent us into the deficit, if you will, that we are in. I would much rather invest in this particular plan because this plan has growth. It provides a lifesaving component to senior citizens benefits for Medicare. You cannot have health care and maintenance by physicians and they are not able to take the prescribed drugs that they are given. This is a key element. I hope that my colleagues will join us and vote almost in unanimous manner on the substitute that I believe offers to all of us a real chance to make a difference on prescription drug benefits.

   Mr. PALLONE. I want to thank the gentlewoman not only for what you said tonight but for being here so many nights as we try to literally pressure the Republicans to bring up a prescription drug plan and have it debated on the floor. You expressed with me how disappointed we are if this actually does happen this week and they bring up a proposal, that the proposal is such a sham that will not actually do anything to help senior citizens.

   I wanted to yield to the gentleman from Arkansas, but I just wanted to say one point about what the gentlewoman from Texas said about the drug research and the increased utilization, because that was so important. We hear the pharmaceuticals saying, well, we need money for research, and you cannot reduce our profit. But I had said before, it is incredible to hear them say that because the Federal Government is so much involved in rewarding them and making sure that they have enough profit.

   First of all, we provide a lot of money for basic research to the drug companies through NIH and other Federal programs. Then you talked about generics. It is true, of course, that there are many drugs for which there is no generic alternative because of the patent exclusivity. In other words, if you develop a new drug and you can get it patented and we give you an exclusive right to sell that over a period of time before a generic can come to market, that is a huge amount of money that the Federal Government through its patent policy is giving to the drug companies. You cannot have a generic under those circumstances.

   Then you think about the fact, and a previous speaker talked about, because he is from Massachusetts, the buses going to Canada. We also say you cannot import foreign drugs, so we are again through Federal policy giving them another windfall because you do not have the option of competition with the drugs that would come from Canada or overseas in lower prices. Then we give them huge tax breaks for their advertising. For them to complain about how they need money for research is absurd.

   I totally agree with you as well. I have never understood why they do not see bringing in all these seniors, now millions of new people in to be able to purchase prescription drugs, would simply increase their profits even more because now a lot more people would be buying the drugs. Their arguments are specious and make no sense. I just do not understand where they are coming from.

   Ms. JACKSON-LEE of Texas. If the gentleman would yield for just one sentence on that point. It is such an important point and I end on this particular point, that is the incentive and the response that the government gives to the pharmaceutical companies. It gives them that benefit. That is why you have the patent, in order to protect them for a period of years so that there is no generic undercutting of the investment that they made to produce the drug. That is why you provide that patent and as well, many people disagree with that, but that is why we have those kinds of restrictions in terms of importation of drugs. Now people are, as I said, having to leave the country to save their lives. So you would find those same people right here using that Medicare benefit, that 80 percent Medicare benefit and buying those drugs that they now leave the country to buy. I cannot understand why there is not an understanding about that logic, but I hope we will have a coming together of the minds and vote on a good bill this week, which would be the Democratic substitute.

   Mr. PALLONE. I thank the gentlewoman. I yield to the gentleman from Arkansas. We already mentioned your name tonight in the context of prevention, the person at the pharmacy that does not get the prescription drug and ends up being hospitalized.

   Mr. ROSS. I would like to thank the gentleman from New Jersey and the gentlewoman from Texas. It seems like every week we are here on the floor of the United States House of Representatives talking about the need to truly modernize Medicare to include medicine for our seniors. Yet it seems like the majority, the Republicans on the other side of the aisle, only continue to give us rhetoric on this issue.

   Let me tell you what I mean by that. Let me preface my remarks for those who do not know me in this body. I want to make sure that they clearly understand that I am a conservative Democrat. I have crossed over and voted with the Republicans when I think they are right. On this issue, they are dead wrong; and I believe it is time for some of us to stand up for our seniors and say so.

[Time: 20:15]

   That is why I am proud to rise tonight in opposition to this prodrug manufacturer prescription drug bill and in support of the Democratic alternative, which I refer to as the prosenior bill, a bill that will truly help our seniors.

   Let me also say that I believe I understand this issue. I understand it because my wife is a pharmacist. We together own a small-town family pharmacy. I have seen seniors in our small town of Prescott, Arkansas, with a population of 3,400 people. In that small town I have seen seniors come through our door after they have been to the doctor. Medicare paid for their doctor bill, Medicare paid for the tests that were run on them, and Medicare will even pay for their hospital stay and

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   Mr. Speaker, we hear a lot of talk about them having to choose between their medicine and their rent and their home mortgage and their utilities and their food. A lot of seniors in my district are getting by from Social Security check to Social Security check; and I understand that and I understand it clearly, because that is exactly what my 91-year-old grandmother back home in Prescott, Arkansas, does. She worked hard all of her life. Did not have a retirement at work. Her Social Security check is her only source of income. If you get ill later in the month, oftentimes you are not having to choose because you have already paid out of your $500 Social Security check for those other things: your rent, your utilities, your food. And there is nothing left for your medicine.

   Living in a small town, I would see a week or 10 days later so many seniors end up in Hope, Arkansas, at the hospital, just 16 miles down the road, running up a $10,000 or $20,000 Medicare bill or required to have a surgery that could exceed $100,000, or diabetics who have legs amputated or require a quarter of a million dollars worth of kidney dialysis before they later died, simply because they could not afford their medicine or could not afford to take it properly. So I am not standing here tonight with a lot of rhetoric; I am standing here tonight with real-life stories from our small-town family pharmacy in Prescott, Arkansas.

   Mr. Speaker, if we think about it, today's Medicare is designed for yesterday's medical care. I have said this before, but I will say it again because I think it makes a good point.

   I recently ran into a senior, a woman who is a retired pharmacist in Glenwood, Arkansas, who just happened to be a relief pharmacist in my hometown when I was a small boy growing up. She said, you know, back in those days, which was not that long ago, she said, I would see prescriptions rarely exceed $5; and when I did see a prescription that exceeded $5, I would go ahead and fill the next one while I built up enough courage to go out and tell the patient that their medicine was going to cost over $5. Today, it is nothing for a prescription to cost $100.

   I think health insurance companies are among the most greedy corporations in America. Even they cover the cost of medicine. Why? Because they know, as the gentleman talked about earlier tonight, they know it holds down the cost of needless doctor visits, the cost of needless hospital stays, and the cost of needless surgeries. All we are trying to do here is pass a bill that will help our seniors get the medicine that they so desperately need.

   So why is the Republican bill a prodrug manufacturer bill? I do not know. It is crafted by the drug industry for the drug industry. They have been unwilling, the Republicans have been unwilling to work with Democrats to develop a bipartisan bill; and I say to my friends on the other side of the aisle, it is time that this Congress stop talking about this issue and got to work. It is time we united in a bipartisan fashion on the need to truly provide our seniors with the medicine they need, just as we have united on this war against terrorism.

   Now, the drug manufacturers are going to spend, actually through a front group known as United Seniors Association, they are going to spend $3 million on an ad campaign trying to convince seniors that this Republican plan is good. Again, I have crossed that aisle and voted with the Republicans many times; and when they are right, I will vote with them. I am a conservative Democrat from south Arkansas, but I can tell my colleagues this: on this issue, I understand this issue, and on this issue they are dead wrong.

   Mr. Speaker, this is a quote from the Washington Post: ``A senior House GOP leadership aid said yesterday that Republicans are working hard behind the scenes on behalf of PhRMA,'' that is the drug manufacturers, ``to make sure that the party's prescription drug plan for the elderly suits drug companies. Republicans favor a

   private sector solution to lowering drug costs, one that requires seniors to buy insurance for drugs from companies or through a managed care plan. Democrats want the benefit, drug benefit to be a part of Medicare, a change companies fear could drive down profits,'' Washington Post, June 18, 2002.

   In the midst of the Republicans marking up this so-called prescription drug plan for our seniors, first they had this crazy idea of coming up with a discount card like it was some new concept. They have been around for years. Seniors who have bought them know there is no real meaningful discounts to a discount card.

   When we created Medicare, thank God we did not say, here is a discount card, go cut a deal for your doctor visit or surgery. This should not be complicated. It is time for us to simply go into the pharmacy and get the medicine that our seniors need, just like going to the doctor and going to the hospital.

   In the midst of the Republicans marking up, writing this prodrug manufacturer bill, they did take a break. They took a break long enough, and I am quoting here, and this is from The Washington Post, June 19: ``Pharmaceutical companies are among 21 donors paying a quarter of a million dollars each for red carpet treatment at tonight's GOP fundraising gala 2 days after Republicans unveiled a prescription drug plan the industry is backing, according to GOP officials.'' Again, Washington Post, June 19, 2002.

   I get angry when I look at statistics that tell me that PhRMA, the drug manufacturers, have over 600 lobbyists on Capitol Hill promoting their interests. Let me tell my colleagues what makes me angry about that. Pharmaceutical company profits are nearly four times the average of other Fortune 500 companies. The annual profit of the top 14 pharmaceutical companies is $38 billion, with a B, and the drug industries' effective tax rate is half that of other major industries. I could go on and on, but I will not.

   But let me say this. The next time we see one of those slick ads on TV trying to tell us which drug we need to tell our doctor you need, have my colleagues ever thought about that? The next time my colleagues see one of those ads, remember this: many drug manufacturers spend more money day in and day out, year after year, on those slick TV ads trying to sell their product than they do on research and development of drugs that can save lives and help all of us to live healthier lifestyles.

   Please, do not be confused by this ad campaign they are putting up trying to pass this prodrug manufacturer Republican bill. It is H.R. 4954. It is nothing more than a Band-Aid, at best.

   Our plan, the Democratic plan, the seniors' plan truly gives our seniors the ability to go to the doctor, to go to the hospital and, yes, to be able to go to the pharmacy and get the medicine that they so desperately need. We treat the prescription benefit just like going to the doctor and going to the hospital. No gimmicks, no tricks. It is that simple.

   Mr. Speaker, I am glad to yield to the gentleman from New Jersey (Mr. Pallone).

   Mr. PALLONE. Mr. Speaker, I want to yield to the gentleman from Washington who has been out front on this issue for so long as well. But I just wanted to comment, I was so glad the gentleman brought up the statement, or the quotes, if you will, from The Washington Post about this big dinner that the Republicans had the night of the prescription drug markup in the Committee on Commerce. We actually had to break at 5 o'clock so that they could go to the dinner.

   I have people come up to me and say, Congressman, no one thinks that anybody who is elected to this House has evil intentions. I mean, whether they be Republican or Democrat, they are not elected here, and they do not come here because they want to be evil. I really believe that strongly. I am sure all of my colleagues believe that.

   So my constituents will say, well, why is it that the Republicans do not want to put the prescription drug benefit under Medicare if Medicare is such a good program, and why is it that they do not want to reduce prices, because that will save the Federal Government money? The answer is the special interest prescription drug industry. That is where we have the Republican aid very much saying that.

   They do not want this to be a Medicare benefit. They want to give it to

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   But they are convinced that they are going to make less money, so they put pressure on the Republicans to say, do not put this under Medicare, do not reduce prices, do not have any pricing mechanism in it. There is no other explanation for it because it does not make sense. People are not doing things because they want to be bad and hurt people; they are just doing it because they are getting the money from the special interests.

   Mr. ROSS. Mr. Speaker, if the gentleman will yield, if the gentleman recalls, he and I were here on the floor while they were out at the fundraiser with the big drug manufacturers talking about this very issue.

   Let me say that those on the other side of the aisle, the Republicans, I am convinced, I know a lot of them, and I am convinced that they love this country just as much as I do. It is not about that. I think it is about being misinformed.

   Mr. Speaker, when seniors cannot afford a quarter of a million-dollar contribution to get into an event, it makes it difficult for them to get their side of the story heard. So I challenge, I welcome, I encourage my colleagues on the other side of the aisle to call seniors in their district, to call their hometown family pharmacies and talk to the pharmacist. They understand these issues, and they know they are going to take a hit as a result of Medicare setting the price on something they now set the price for. They are okay with that, as long as the drug manufacturers share that hit. Do not forget, when one goes into a pharmacy, every dollar we spend, 84 cents, is a direct result of the drug manufacturer; 84 cents out of every dollar, a direct result of the drug manufacturers.

   I just think they are misinformed. I think they are well-intentioned. I think they are good folks; they love this country like we do. This just happens to be an issue that they do not understand. Seniors cannot afford a quarter of a million-dollar ticket to get into a fundraiser in the middle of writing a bill. So I would ask them to put politics aside, get on the phone and call seniors, call your hometown family pharmacist. Ask them what they think about the Republican bill and the Democratic bill, again, the drug manufacturer bill versus the seniors' bill that will truly modernize Medicare for our seniors.

   Mr. PALLONE. Mr. Speaker, I thank the gentleman from Arkansas, and I appreciate the fact that the gentleman from Washington is here, and I apologize. I think there is about 7 minutes left, and I know that is not a lot of time, and I yield to the gentleman.

   Mr. McDERMOTT. Mr. Speaker, I appreciate the gentleman yielding to me. I think that this is an issue where the question that if I were sitting out there, I listen to all of these people tear this Republican plan apart and ask themselves, why in the world are the Republicans putting forward something that has so many defects in it? I think the truth really is that Newt Gingrich was quite honest when he said once, we expect Medicare to wither on the vine. They never liked the senior health care plan we have in this country paid for through the government. They have always thought it ought to be done by the private sector. They have thought that for 38 years.

   Now, the reason they have this prescription drug benefit out here is like the old story about the Trojan horse. They came up to the gates of Troy with this horse and everybody inside said, oh, what a beautiful horse. People said, well, the Greeks have brought it over here. It is a gift. So the people from Troy said, well, okay, open the gates and we will bring it in. They brought the horse in and lo and behold, it was hollow and filled with Greek soldiers who took over and captured and destroyed Troy.

   Now, that is what this whole issue of pharmaceuticals is about. The Republicans want to destroy Medicare as we have always known it and make it under the private insurance industry. What they have done in this bill is to set up two bureaucracies. Right now we have one bureaucracy; it used to be called HCFA, the Health Care Financing Administration. They changed that, they call it CMS now, whatever that is; and they have that over there for the fee-for-services. Then they created something called the Management Benefit Administration over here, and they put all of the HMOs under that; and they put the drug benefit under that.

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   They separate the two and they give these two agencies the responsibility of managing competing ways of delivering health care, but it is not fair. They did not level the playing field. They said to these people over on the private side that they can hire anybody they want at any amount they want to pay them, but over here in the public side they have to use the civil service rules, so this will allow these people to take the best people away, and the whole idea is to set up this competing private sector delivery of health care.

   I sat on the Medicare Commission for a year, and the whole time they were trying to set up a private health care system. In those days, they called it a voucher. What they were going to do was give everybody $5,400 and send them out to find a health care plan, and then we would not need this public program. We would just dole out the checks at the beginning of every year to the old people, and they would go out into the private sector and look for an insurance company that would give them their health insurance for $5,400.

   We said that will not work because there are people who are sick and people who are healthy. Some people will get a good program, some will get a terrible program, and what we want is a program for all senior citizens that give all an opportunity to have good benefits. And they said, no, let us just give them the money, and we will give them choice.

   This is that magic word they throw around, ``choice.'' My mother is 92, and I do not know but there are probably a few members of Congress who have got an older parent. When one is 92 years old, they are not much interested in choice. They just want something they can count on that they know will be there.

   But Republicans are determined. From Gingrich, for the last 10 years, well, longer than that, 35 years, they have been trying to push us into the private sector because they know how to manage things so well and they are so kind and loving and they take care of us so well. Over the last 3 or 4 years, we have tried to get people to go into managed care. People went into managed care. What happens to them? They close down the program. We have had millions of people lose their benefits in this country.

   So now it is not bad enough with HMOs. Let us do this to drugs. Let us put the folks into the private sector and let them start out and get a benefit and have it closed down, and then they will have to look around for somebody else. They will not have a benefit because it will not be a guaranteed Medicare benefit. It is a voucher. They are going to give a voucher to people and tell them to find a drug company that will take care of them. And the American people are not stupid. They can see a Trojan horse for what it is. These people have been after destroying Medicare for 35 years, and they are doing it today.

   My view is that, if we allow that to happen, we will have given away one of the most important programs in this country for economic security. Most senior citizens feel comfortable knowing that they do not have to go to their kids for health care benefits, they do not have to go to their kids and beg to them and say please buy my medication.

   My mother lives on a small Social Security pension. That is all she has. She has got three boys and one girl. We will help her. But the Republicans will not even count as paying for the drugs in their program what the kids put into it. My mother has to pay it all out

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