NOTE:
Grassley sent a letter
to the Congressional Budget Office seeking information about proposals to allow
Medicare Part D to negotiate pricing. The
Congressional Budget Office sent a response which can be found here.
Prepared Floor
Remarks by U.S. Senator Chuck Grassley of Iowa
Chairman, Senate
Finance Committee
On Medicare Part D
Price Negotiation
Wednesday, May 22,
2019
I
come to the floor today to set the record straight on an issue that affects
every American who is eligible for Medicare.
More
specifically, I’m here to talk about our efforts to reduce the rising cost of
prescription medicine.
Prescription
drugs save lives. Millions of Americans, like myself, woke up this morning and
took their daily medication
But
there’s something that’s become a tough pill to swallow for an increasing
number of Americans.
And
that is paying for the rising costs of their prescription drugs.
I
applaud President Trump for turning up the volume on this issue last summer.
That’s
when he announced his administration’s blueprint to lower drug costs for all
Americans.
It’s
a goal that has widespread support.
That
includes Republicans and Democrats as well as urban and rural Americans.
There
are many good ideas to build upon that share broad, bipartisan bicameral
support.
There
is one policy out there, however, that I don’t agree with.
That is repealing the non-interference clause in Medicare Part D.
Let
me explain why Congress kept the government out of the business of negotiating
drug prices in the Medicare program.
Some
16 years ago, I was a principle architect of the Medicare Part D program.
For
the first time ever, Congress in 2003 added an outpatient prescription drug benefit
to the Medicare program.
Adding
a prescription drug benefit for seniors was the right thing to do.
But
it needed to be done in the right way-right for seniors and right for the
American taxpayer.
By
that, I mean allowing the forces of free enterprise and competition to drive
costs down and drive value up.
For
the first time ever, Medicare recipients in every state had the voluntary
decision to choose a prescription drug plan that fit their pocketbooks and
their health care needs.
The
Part D program has worked.
Beneficiary
enrollment and satisfaction are robust.
The
Part D marketplace offers consumers better choice, better coverage and better
value.
And
yet, here we are again. It’s been 13 years since Part D was implemented.
And
once again, I am hearing the same calls to put the government in the driver’s
seat.
It’s
the same back seat drivers who think centralized government knows best.
As
the Senator who once again chairs the committee with jurisdiction over Medicare
policy, I’m not going to let Congress unravel what’s right about Medicare Part
D.
Remember,
I was a Republican leading the charge to add a new benefit to a government
program.
You
heard me correctly. I was a Republican chairman working with my Democratic
Ranking Member, Max Baucus.
We
negotiated an agreement to add prescription drug coverage for seniors.
For
me and other Republicans, namely, President George W. Bush, there were a few
key caveats.
First, it must be voluntary.
Second,
beneficiaries would share the cost with the taxpayer.
Having
skin in the game keeps check on spending and utilization.
Third,
we must allow competition – not government mandates – to drive innovation, curb
costs, expand coverage and improve outcomes.
It
wouldn’t work if the federal government interfered with the delivery of
medicine and dictated which drugs would and would not be covered.
That’s why we wrote a non-interference clause in the law.
And
my friend Senator Wyden, the current Democratic Ranking Member of the Finance
Committee, voted for final passage in 2003.
The
non-interference provision expressly prohibits Medicare from:
One,
negotiating drug prices; two, setting drug prices and three, establishing a
one-size-fits-all list of covered drugs.
That
list is called a formulary.
I remember that many of my friends on the other side of the aisle voted for
this policy. And yet, many are now pushing for a repeal of this provision.
Many
Democrat leaders supported banning Medicare from negotiating drug
prices: Senators Biden, Kennedy, Baucus, Reid, Schumer, Leahy, Durbin,
Stabenow, Cantwell. On the other side of the Capitol, the list includes Speaker
Pelosi and Chairman of the Ways and Means Committee, Chairman Neal.
There’s
something else I’ve learned in all my years talking health care policy with
Iowans at my annual 99 county meetings.
At
the end of the day, Iowans don’t want the government prescribing life-saving
medications.
They
want to make those decisions with the physician who is treating them.
Last
year 43 million out of 60 million Medicare recipients were enrolled in a
Medicare Part D plan.
That’s
the vast majority of Medicare beneficiaries nationwide that don’t have coverage
through a past employer or similar coverage for another source.
Plan
sponsors design different plan choices and compete for beneficiaries based on
what those plans cover and what they cost.
Beneficiaries
can pick from many options, with over three thousand plans offered across 34
geographic areas.
Most
beneficiaries were covered by a prescription drug plan, a growing number were
covered by a Medicare Advantage prescription drug plan.
The
Part D base premium amount is low and has remained stable over many years.
So,
the non-interference clause ensures that plan sponsors create plan options that
respond to what beneficiaries want.
The
nonpartisan Congressional score keeper, the Congressional Budget Office has
repeatedly stated that repealing non-interference wouldn’t save money unless
there was a restrictive formulary.
Last
week, CBO sent me a letter stating the same thing.
I’d
like to submit the letter for the record.
Repealing
noninterference means a restrictive formulary which places limits on the drugs
that are available to seniors.
I
don’t believe Medicare beneficiaries want that.
As
policymakers, we must keep in mind we are making decisions that affect health care
choices for the people we are elected to represent.
Let’s
all remember to first, do no harm.
Repealing
the non-interference clause may sound good, but not even a spoonful of sugar
will help a bad dose of policy medicine go down.
I
hope this puts the issue to rest.
Part
D has been a great success.
We
need to preserve the foundation of private enterprise on which Part D is based
and get to the real work of reducing prescription drug costs.