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[Page: S6977] GPO's PDF---
The PRESIDING OFFICER. The clerk will report the pending business.
The legislative clerk read as follows:
A bill (S. 812) to amend the Federal Food, Drug, and Cosmetic Act to provide greater access to affordable pharmaceuticals.
Pending:
Reid (for Dorgan) amendment No. 4299, to permit commercial importation of prescription drugs from Canada.
Reid (for Stabenow) amendment No. 4305 (to amendment No. 4299), to clarify that section 1927 of the Social Security Act does not prohibit a State from entering into drug rebate agreements in order to make outpatient prescription drugs accessible and affordable for residents of the State who are not otherwise eligible for medical assistance under the Medicaid program.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I am going to send a modification to the desk very shortly, but I want to comment briefly on the statements of my friend from Missouri that were just made. He talked about lunacy of what is going on here. I will use his exact term--lunacy. Talk about the death tax, that is, the estate tax, at the same time you are talking about Medicare prescription drugs, the vast majority of people, the vast, vast majority--over 98 percent--of the people on Medicare have no relevance to the estate tax. Why he would bring up the estate tax at the same time we are talking about Medicare prescription drugs is beyond my ability to comprehend.
I would also say he talks about why we bring up some of these bills without going through the committee. We do not do that very often, but we have done it. When we were in the minority, it was done all the time. We have seen a number of these measures being brought up because of what has gone on after September 11.
Take terrorism insurance . We passed that. It was really good legislation. The President told us how much it was needed. It took us a long time to get the bill up because they objected to it. Now they will not let us go to conference on this bill. It is interesting to note, the majority leader said we should have a 3-to-2 ratio and we had a 3-to-2 ratio. They said no, we want 4-to-3 or we will not go to conference. We gave them 4-to-3, and they still won't go to conference. This is terrorism insurance . That is stopping construction
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There are other examples, of course--the trade bill. The trade bill is something the President said he wanted. He wanted us to get it to the floor as quickly as we could. We did, and it passed. Only the last couple of days were we able to get conferees appointed.
The farm bill, that is pretty important legislation--the President signed that into law. The energy bill, we finally got conferees there. The President said that was an important bill.
I only mentioned a few of them--the trade bill, the farm bill, the energy bill, the terrorism bill. They couldn't be too bad. They passed the Senate by large margins in every case.
I hope people will understand that we are doing the best we can to work our way through a difficult situation in this country. We are making progress. We passed legislation in spite of the obstinacy we have had--not the least of which is the legislation on which the Senate is now working. We spent all day yesterday on importation. I think we should have been able to do more. I agree about the fact that we finally passed our first appropriations bill.
As I see down the hall, we are completing the very difficult conference on the supplemental. I should be there. I am a member of that committee. I hope to go there in a matter of a few minutes. Senators BYRD and STEVENS, chairman and ranking member of that committee, indicated to me that they expect to complete that conference in the next hour and a half. That will be by 12:30.
AMENDMENT NO. 4305, AS MODIFIED
Mr. REID. Madam President, I have a modification at the desk. I call it up.
The PRESIDING OFFICER. Without objection, the amendment is so modified.
The amendment (No. 4305), as modified, is as follows:
At the end, add the following:
SEC. __. CLARIFICATION OF STATE AUTHORITY RELATING TO MEDICAID DRUG REBATE AGREEMENTS.
Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) is amended by adding at the end the following:
``(1) RULE OF CONSTRUCTION.--Nothing in this section shall be construed as prohibiting a State from--
``(1) directly entering into rebate agreements (on the State's own initiative or under a section 1115 waiver approved by the Secretary before, on, or after the date of enactment of this subsection), that are similar to a rebate agreement described in subsection (b) with a manufacturer for purposes of ensuring the affordability of outpatient prescription drugs in order to provide access to such drugs by residents of a State who are not otherwise eligible for medical assistance under this title; or
``(2) making prior authorization: (that satisfies the requirements of subsection (d) and that does not violate any requirements of this title that are designed to ensure access to medically necessary prescribed drugs for individuals enrolled in the State program under this title) a condition of not participating in such a similar rebate agreement.''.
The PRESIDING OFFICER. The Senator from Michigan is recognized.
Ms. STABENOW. Madam President, I would like to speak to my amendment which is now before us.
I ask unanimous consent that the following Senators be added as cosponsors to the amendment: Senators DORGAN, SCHUMER, FEINGOLD, TORRICELLI, CARNAHAN, LEVIN, JOHNSON, SNOWE, JEFFORDS and DURBIN.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. STABENOW. Thank you very much, Madam President.
Madam President, I am very pleased to offer this amendment which is a bipartisan amendment, and hopefully one that we will be able to pass, working together and moving forward on the issue of lowering prices of prescription drugs and also providing Medicare coverage for our seniors and the disabled.
This amendment addresses an issue that our States are facing, the question of allowing States to have the right to have flexibility to lower prices.
This is a simple amendment. It would give States the flexibility to set up programs to pass along negotiated Medicaid rebates and discounts to their citizens who do not have prescription drug coverage and are not covered by Medicaid. So the States will have the ability to negotiate and pass on those similar discounts to their citizens who are without coverage and who are not on Medicaid.
This is critical. States should have the ability to provide similar discounts to all of their uninsured citizens. Since Medicaid only covers low-income people, and lower and middle-income citizens, they do not have the ability to get the same negotiated discount. Some States are setting up programs to do that.
One of the biggest challenges, as you know, and as we all know--we will be debating it this week and next--is the challenge facing not only our citizens, our families, and our seniors but also the business community, which I have talked about frequently. Also, State governments are addressing this issue of the rising cost of prescription drugs and the implications to Medicaid.
In fact, the National Governors Association is meeting right now. Earlier in the week, I shared a newspaper article where all of the Governors of the United States were speaking about their biggest challenge. Their biggest challenge, according to the article, is the rising price of prescription drugs and the rising cost of Medicaid to the State budgets. This is a critical issue for them.
We know that from 2000 to 2001 prescription drug prices rose about 17 percent. This is not unusual. It has been that way every year. This is causing health care expenditures and health insurance premiums to go up for business, for States, for individuals, and most certainly for those who do not have any insurance and don't have the clout to negotiate a discount. Those citizens are paying retail, which, in fact, is the highest price in the world right now.
In an attempt to respond to the skyrocketing prices, 30 of our States have enacted laws with some type of prescription drug coverage for those without insurance . They are looking for ways to be innovative--to use what we often have heard on the floor from our colleagues--the innovations of the States, the laboratories of democracy, and the ideas that come from our States. About 30 of them are looking for ways to enact something that relates to prescription drug coverage--looking for ways to lower prices and expand coverage. That is according to the National Governors Association.
However, unfortunately, the drug companies' trade association--PhRMA--has mounted legal challenges against several of those States, including my own State of Michigan. They have been opposing State efforts to lower prescription drug prices and increase coverage for those without insurance .
Specifically, they filed lawsuits against Maine and Vermont for their programs because the drug lobby does not want them to extend the Medicaid discounts to those without insurance who are hard-working citizens. In fact, we know that a majority of
the people without insurance in this country work in small businesses. They are working. Their small business is trying to get health care coverage for themselves and their workers. Those individuals have no access now to any kind of group purchasing power or to any kind of discount. States are trying to use their group purchasing power for Medicaid and extend that same discount--usually 15 to 20 percent--to their employees. Many work in small businesses and don't have any insurance .
While Maine's two programs have been upheld in court, Vermont's program has not. It was actually struck down by the courts. Both States are embroiled in a very lengthy appeals process.
Specifically, the Maine Rx program is now pending before the Supreme Court. The current administration is supporting Maine's right to implement their program.
I commend President Bush and the administration for siding with the State of Maine and their right to make decisions about their citizens and how to operate their businesses for their State.
In fact, the Solicitor General, Ted Olsen, filed a brief on behalf of the Federal Government urging the Supreme Court to allow Maine's Rx program to go forward without further delay.
I argue that this amendment, in fact, is supported by both parties, people on both sides, and that administration certainly has indicated--I have not heard directly regarding the amendment, but they certainly have indicated support for the program on which this amendment is based. I appreciate their leadership on this issue.
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These legal challenges are very costly to taxpayers. They just deter other States from establishing other similar demonstration projects, such as the underlying generics bill. Unfortunately, the drug companies are trying to stop these kinds of innovations.
This amendment would, in fact, try to stop the drug companies from using the legal system to keep their prices high. We all know that they will dispatch their high-priced attorneys whenever they can to, unfortunately, keep their profits as high as possible.
Since the price of prescription drugs is soaring, States have the unfettered ability to pass on Medicaid rebates to their residents. They should have that ability to pass those rebates on to their residents.
I hope we will agree to this amendment because even if Congress passes a Medicare prescription drug program this year, it will be several years before it is fully phased in.
I hope and pray that we will come together and pass a Medicare prescription drug benefit. It is long overdue. But we know it will take several years to phase it in.
In the meantime, our States are struggling to help their citizens. I believe they need our support.
The Rx flexibility-for-States amendment would seek to remove the legal hurdles that are preventing States from providing lower priced prescription drugs to their citizens.
Specifically, States would be able to extend their Medicaid rebates and discounts for prescription drugs to non-Medicaid-eligible persons.
State governments are close to the people. I know our Presiding Officer was in the State government, as was I. We understand that States and local governments are on the front line hearing from people, and wanting to respond. We have States that are responding, and are being stopped through the legal system right now by the drug company lobby. The solution to higher prices, higher prescription drug prices, is not just in Washington. It is not just in the Senate, or in the House of Representatives. But it is in capitals all across the country where our Governors and our State legislators are working to respond to what is critically one of the most fundamental issues that families and seniors and businesses face to today, which is the explosion in health care costs, predominantly coming from the rising cost of prescription drugs.
Today we have a chance to send a very important message to our colleagues and to States across the country.
I ask my colleagues to join with us, on a bipartisan basis, as we have in this amendment, to adopt this amendment and to tell the States that we are standing with them as they fight to lower prices for their citizens and make lifesaving medicines available.
If we fail to pass this amendment, many States could be faced with legal challenges from PhRMA as they try to come up with programs to lower prescription drug prices. Right now, we have the ability to stop the dollars going into the lawsuits and redirect those to lowering prices and making prescription drugs available.
I invite and urge my colleagues to join with us. This is an opportunity for us to stand together in support of our State governments. Let the Governors know, this week, as they are meeting, that we understand what they are going through and we want to back them in their efforts to make sure that lifesaving medicines are available to their citizens.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I commend my friend and colleague from Michigan for this absolutely excellent amendment. I am hopeful we can get strong support for this amendment because it is so compelling in its logic and reason, and the result will be so important to our fellow citizens across the country.
Just to catch up to where we are, Madam President, the underlying bill, the Schumer-McCain legislation, tries to halt the gimmicking that the drug companies use to get around the Hatch-Waxman bill that was passed a number of years ago. They have gimmicked the rules, and they do it in ways that completely circumvent the spirit and the understanding of the law, in order to keep prices artificially high. And every family and every user of prescription drugs knows the challenges families are facing with high drug prices.
Under the McCain-Schumer legislation, we have tried to deal with that issue. I think we have dealt with it effectively. That is the matter that is before the Senate.
We had a good debate yesterday on different measures that continue to put downward pressure on the escalation of drug prices. I think we had a very good debate on that, both in support of the underlying legislation and in support of the Dorgan amendment, yesterday. Now we have the Stabenow amendment before us, which will, in a very important way, continue this effort to exert downward pressure on the prices of drugs in this country.
I am amazed at the opposition to this amendment. For a good part of the afternoon yesterday, we listened to talk about the free market system that urged us to get away from price controls and use the free market system. But when the States
use the free market system, in order to bargain for the lowering of the prices, what happens? What is the reaction of the drug companies? The drug companies go ahead and sue the States to try to restrain them from using the free market system.
This isn't Government intervention, it is the States themselves, States that have Republican Governors and Democratic Governors. The States themselves are trying to use the States' power in order to get the best price for the neediest citizens in their States: the poorest individuals, the ones without insurance . And here comes PhRMA with their legal actions to make sure the States are not going to be able to do that.
When does that greed stop? When does that greed stop? When do they stop wringing the final few cents out of the poorest individuals in this country? That is what this is all about.
The States are trying to negotiate lower prices for the poorest individuals in these States, and PhRMA says no. They gimmick and circumvent the clear spirit and language of the Hatch-Waxman law in order to perpetrate billions and billions of dollars of additional profits.
Then we hear a great deal of debate in this Chamber and much admonition from many of those who are opposed to the underlying legislation saying: Let's let the free market work.
We had hours and hours of discussion about price controls in Canada. We are not for price controls, as in Canada. We want the free market to work. But what is happening when the free market works in the State of Maine, the State of Florida, the State of Michigan, and other States? In comes PhRMA, and they say: No, we are not going to let it work. We want to stop them from doing it.
This is the same kind of action that is underlying the basic measure.
So I want to review, very briefly, the situation. I understand the problem we are looking at.
Under the terrible burden of skyrocketing drug prices, the State governments are trying to use their authority and bargaining power to help residents--and our constituents--obtain lower prices.
Already, 30 States have passed laws to extend drug coverage or lower prices. But PhRMA has done it again, suing the States to stop our ``laboratories of democracy'' from fighting the drug industry on behalf of American consumers.
The drug industry has sued the State of Maine. They have sued Vermont, Michigan, Illinois, and Florida. The drug industry is waging war against our Governors and our State legislatures in the courts.
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