Mr. Speaker, I thank the gentleman from New Jersey (Mr. Pallone), my friend, and the fabulous work he has done and the courage he has shown in standing up to very powerful interest groups in this country in supporting and fighting for a…
Mr. Speaker, I thank the gentleman from New Jersey (Mr. Pallone), my friend, and the fabulous work he has done and the courage he has shown in standing up to very powerful interest groups in this country in supporting and fighting for a drug benefit.
I noticed something that the gentleman just said as I was sitting here watching this evening, that this bill does nothing to hurt the drug industry or the insurance industry. In fact, this bill, by and large, was written by the drug and insurance industries.
Let us talk for a moment about price. When any of us, Republicans or Democrats, people on that side of the room and people on this side of the room, go to a town meeting or go to a senior center or walk down the street or walk downtown or walk through a shopping mall and talk to people of all ages, especially seniors, but people of all ages about the whole issue of prescription drugs, the first thing they say is, why are our drug prices higher than the drug prices anywhere else in the world? And these are prescription drugs generally made in the United States, developed in the United States, manufactured in the United States. And, in fact, these drugs often, much of the research and development for these drugs was done in America and funded by U.S. taxpayers through the National Institutes of Health.
So we have the most profitable industry in America, 20 years running, whether it is return on investment, return on sales, return on equity, the drug industry, we have an industry that enjoys the lowest tax rate in America, in large part because of what this Congress and this President have done in giving them tax advantages. And, on top of that, we have an industry where much of the research, almost half of the research and development which leads to this industry's profits, to the drugs this industry manufactures, almost half of the research and development has been done by taxpayers, a full half has been done by taxpayers and by foundations. We put
all of that together, and then we say, why is it fair that this industry charges American consumers more than consumers in any other country in the world?
I have sponsored a dozen or so bus trips to Canada for seniors in my district and people who are not seniors, on some occasions. It is about a 2\1/2\ hour ride from Lorain in my district. We have taken trips from Medina and we will take them from Akron. It is about a 2, 2\1/2\, 2\3/ 4\ hour drive to Canada. They buy their prescriptions, they have saved literally hundreds of dollars per person, sometimes even more than that.
But why should drugs made in the United States and, in many cases, underwritten by taxpayer research, why should those drugs cost two and three times more here than they do in Canada? The reason is, frankly, because of the drug industry's influence on my colleagues on the other side of the aisle. The reason is President Bush's close alliances with the drug companies and the fact that the drug industry funds large parts of his campaign.
The gentleman from New Jersey may remember a couple of years ago, last year when we considered this drug bill about this time of year, we were in the middle of our committee work and the gentleman from Louisiana (Chairman Tauzin) recessed the committee for the day at about 5 or 6 o'clock because all of the Republican Members had to go off to a fundraiser headlined by President Bush, sponsored by the CEO of Glaxo Wellcome, a British drug company who makes millions of dollars a year, sponsored by them and headlined by President Bush. President Bush personally thanked the CEO of Glaxo Wellcome for all of the work they did in raising literally millions of dollars. Then, it is no surprise that come election time, the drug industry put in literally $80 million, hard money, soft money, independent expenditures, all the way, directly or indirectly, they put money into campaigns, they put that kind of money into these political campaigns. We can see the chart, if the gentleman from New Jersey would point out the chart next to him and in front of me, about drug company contributions, and if the gentleman would explain that.
Mr. Speaker, if the gentleman will yield, the issue is partly campaign money, but the real issue is the fact that Republicans and President Bush have invited the drug companies into their offices, into the Oval Office to meet with the President's people, into the Lincoln bedroom, if you will, in terms of putting big amounts of money into the White House, big amounts of money into President Bush's campaign and getting out pieces of legislation that benefit them.
In this country we continue to pay two and three and four times what the Canadians pay, the French pay, the Germans pay, the Japanese, the Israelis, the Finns, the Brits, all of the wealthy countries in the world, we pay two and three and four times what they do. And this drug bill, written by the drug companies and introduced by the Republicans, there is nothing in this bill, nothing in this bill to get prices under control. And that is what is outrageous, when the drug industry continues to fleece the American public. And it does not just hurt every senior who reaches into his pocket to pay the high cost of drugs, it is also what it does to American business, what it does to GM, or what it does to GoJo Industries in Akron or what it does to Inyacare in Elyria.
On the one hand, taxpayers are paying for all of this research and, on the other hand, Medicaid and other tax-supported institutions in this country are paying high prices for prescription drugs. I yield back to the gentleman.
Mr. Speaker, if the gentleman will yield, Congress continues, as they have done with Medicare HMOs, as President Bush has pushed for, and as the Republicans in their drug plan, cowritten by the drug and insurance industries suggest and propose, we have continued to ``subsidize'' is one word, ``pay off'' is another one; we continue to dump more and more millions and tens of millions, hundreds of millions of dollars, ultimately billions of dollars we dump into these insurance companies, and what are we getting?
There was a study put out literally today by a group called Families USA, a group that represents seniors and especially families around the country, a large organization.
They did a study of the average salary of CEOs for big insurance companies, the big HMOs that will benefit from this Medicare privatization plan. So understand, President Bush wants seniors out of traditional Medicare, put them in these private insurance HMOs. Now the average pay for the CEOs of these largest insurance companies, HMOs that will be handling Medicare if the Republicans get their way, is more than $15 million.
Now, contrast the $15 million salary, plus I am not even counting stock options and all that, but just their base salary, contrast $15 million the CEO of the insurance companies make with the $130,000, which is what the CEO, if you will, Tom Scully of the Center for Medicare and Medicaid Services makes, the agency that runs Medicare for our government.
So you have got $15 million on the average for the CEO of the insurance companies which will run Medicare if the Republicans get their way, versus $130,000 running Medicare the way it is done now, traditional Medicare.
You make one other comparison. You have the insurance companies are spending three and four times on administrative expenses more than Medicare spends. Medicare's administrative expenses are between 1 and 2 percent. Insurance company Medicare expenses are between three and four times that amount. And then the last comparison if you are in traditional Medicare, you stay in Medicare. They do not cut you
out. They do not throw you off. They do not decide to abandon you. They do not take your plan out of the county. If you are in a private Medicare HMO, even with these big salaries they are paying the executives, maybe because of that, they pull out of a county. They drop tens of thousands, hundreds of thousands of seniors out of their plan.
One CEO in particular, United Health Care, a big insurance company HMO, paid Norm Payson, last year he was paid $76 million. And that $76 million could cover about 30,000 seniors for prescription drugs. So look at what you have got. You have got big salaries, high administrative expenses, and organizations that will dump seniors out, that is, unreliable care; or you have lower salaries, smaller bureaucracy, a government program which will never ever dump seniors, which will provide reliable care, which will always be there for those seniors.
It is a pretty easy choice. You have the Republican plan, the privatized plan; or you have the Democratic plan, traditional Medicare, which seniors in this country have used and plans that have obviously served seniors well for 38 years.
It can be so simple. In Canada, what the Canadian people do, what the Canadian Government does is they have created a small office with a board called the Pricing Board and the Pricing Board negotiates on behalf of 29 million Canadians with individual drug companies, German companies, French companies, American companies, Canadian companies. They negotiate price and then the drug is sold, for every drug manufactured, then the drugs are sold to retailers, sold wholesale into Canada at those much, much lower prices because they have negotiated them on behalf of 29 million Canadians. Then the drug stores negotiate, and they end up with much lower prices.
So it would not be difficult for this Congress to figure out a way, there are a dozen ways, the Canadian way is a very simple and effective way obviously because you can tell from the prices there, but it is not difficult to come up with a way to bring prices down.
The reason that the Republicans have not chosen any of those methods is anybody's guess; but it is hard to believe that they are doing it for any other reason than their political closeness, if you will, political allegiances to the big drug manufacturers.
I know it offended our chairman in the markup and it offends some Republicans, including the President, to suggest that their behavior on this bill is connected to their drug company contributions. But when you saw the drug companies spend 80 or $90 million last year, 85 percent of it going to Republicans, when they spend that kind of money, it is hard to believe that the Republicans would do anything without the drug companies' approval.
I would argue the Republicans have not just not done anything without drug company approval. I suggest they have turned over the writing of the legislation to the drug companies. They could not have done a less effective job. They could not have done a worse job of controlling prices, of ratcheting drug prices down than this bill does.
As the gentlewoman from Ohio (Ms. Kaptur) pointed out, as the gentleman from New Jersey (Mr. Pallone) pointed out earlier this evening, this bill not only does not do anything to try to restrain prices, to ratchet prices down; it expressly prohibits the government from doing anything to get the price down. It is so logical to say to the Secretary of Health and Human Services, all you have to do is negotiate on behalf of U.S. consumers, Medicare beneficiaries or the entire consuming public of all ages. You simply need to negotiate price.
Another way we could do it is say that Medicare should pay no more than the Canadian price or the average price of the G-7 nations, the largest economies in the world, whatever price they are paying. There is a lot of ways to do it; but the way not to do it is the Republican way of doing nothing and actually prohibiting the government from doing anything from getting prices down. The higher prices are hurting seniors individually, hurting American business, and American competitiveness in this economy that continues to drift, continues to stagnate; and it obviously is hurting U.S. taxpayers because we are paying too much for drugs.
I yield back because I think the gentleman wants to share with other Members of the House the language that is actually in the Republican drug bill.
That is exactly my argument. Under the Republican plan, you just simply do the math, and we know that seniors around the country will do the math. I hope they do the math before tomorrow when we vote on this bill because once they have, they will see they are not getting very much in this benefit. For a senior in the United States under the Republican plan who has $5,000 in drug costs, the government will only pick up $1,000. Four thousand of that will come from out-of- pocket costs. So $5,000 drug costs, saving only 20 percent of that. The government will only pay 20 percent. The senior will pay $4,000 out-of- pocket costs. What is so disingenuous about the Republican plan is that it is hard to figure out because they charge a premium. They say it might be $35, but the only time it has ever been tried it was $85 a month. Then there is a $250 deductible. Then they pay 20 percent of the first $2,000, but after $2,000 they pay zero percent. The government does of the next $2,100. It is very complicated.
That is what you are talking about. The Democratic plan operates the same way traditional Medicare does. It is a simple $35 premium, $250 deductible, 20 percent co-pay, and then 100 percent coverage by the government of catastrophic coverage if you have huge drug bills.
It is very simple by the way the Democrats do it because it operates the same way that traditional Medicare does. Seniors know how Medicare operates. The Republican plan is so confusing, so Rube Goldberg-like, so complex, so difficult to understand, I challenge my Republican friends on the other side of the aisle to try to explain it. I do not think anybody can explain it very well. But they will have to explain it when seniors see, if this bill passes, seniors see how difficult it is to understand that.
The point the gentleman made too is that not only is the Democratic plan simple and the Republican plan a Rube Goldberg, complex, almost unfathomable kind of plan, but the Republican plan does nothing to keep prices down. And the Democratic plan gives the Secretary of Health and Human Services the right to negotiate and bring prices down the way the Canadians do and to reimport drugs, to bring drugs in from Canada if they are not cheap enough in the United States.
And that simply makes all the difference in the world; that our plan is simple, and our plan will bring drug prices down, and our plan is a generous, adequate benefit for America's seniors.
Mr. Speaker, if the gentleman will yield, the President has been bringing Members to the White House today and lobbying them, and I also know the President this week has raised a lot of drug company money and insurance company money. The President is using the power of the Presidency trying to get people to pass this. And from the reports coming out of the meetings from Members whom I have talked to, in both parties, the President is not talking about the details of the bill. He is just saying you have to do this for me. We need a prescription drug benefit. Seniors deserve it. But he is not doing the math for them.
If every Member of Congress tonight, tomorrow morning, before we vote on this tomorrow during the day would sit down and calculate, listen to the discussions like this and calculate individual numbers about what seniors are going to get, and then would look at what drug prices are, as the gentlewoman from Ohio (Ms. Kaptur) pointed out, what drug prices are in Canada, France, and Germany, what they are in the United States, and how this bill does nothing about that, and then look at how this bill privatizes Medicare in 2010, I think Members, particularly if they began to listen to what people at home are saying, would have a very different take on this bill, no matter what the President said, no matter how many campaign contributors that Republican leadership and the President of the United States want to honor by passing this legislation.
If the gentleman will yield for just a moment, and I know the gentleman from Connecticut (Mr. Larson) is here, but the gentlewoman from Ohio (Ms. Kaptur) just talked about privatization, as we have. We know that idealogically, in addition to the drug company and the insurance industry contributions to the Republicans and how that seems to affect their thinking, we also know that some Republicans just do not like Medicare. There is a history of it.
Donald Rumsfeld, Gerald Ford, and Bob Dole voted against it when it was created 38 years ago. Newt Gingrich tried to cut it so he would have money for his tax cuts. Same old story. But the gentleman from California (Mr. Thomas), who is the number one point man in this entire Congress to privatize Medicare, he said this morning, and the gentleman from California (Mr. Thomas) is the Republican chairman of the Committee on Ways and Means, he said, ``To those who say that the bill would end Medicare as we know it, our answer is, we certainly hope so. Old-fashioned Medicare isn't very good.''
That is like Newt Gingrich saying Medicare would wither on the vine and Bob Dole, just a few years ago, before he ran for President, saying I fought the fight to try to stop Medicare from being created. These guys do not like Medicare.
Mr. Speaker, I would add it is pretty clear there are two things going on. One is the huge contributions from drug and insurance interests and connections between that and the Republican plan, essentially since it is pretty clear those interest groups wrote the plan.
Second, they just do not like Medicare. There is clear evidence of a 38-year history of that. But the proof is in the pudding. One, it is what the legislation looks like. The second way the proof is in the pudding is that this debate is held in the middle of the night. The Committee on Rules will meet later this evening. It is already 5 after 11 in Washington. The Committee on Rules will meet behind closed doors with no C-SPAN and no reporters basically there to make these decisions.
And while the Senate is debating their plan, which is moving toward some bipartisanship, for several days, we will have a debate tomorrow of only a few hours. That will be the end of it. The Republicans do not want the public to learn about this. That is why it
is so important that our colleagues speak out and make sure that people understand the difference between the simple Democratic plan that adequately covers seniors and ratchets down the price of prescription drugs, and the Republican confusing plan which gives very little benefit, is written by the drug companies, pushes seniors out of traditional Medicare into private plans, and does nothing about getting prices down.