SENIOR ISSUESTo view video from the meeting click here.
I am happy to announce today the formation of a Senior Advisory Council which will help me better understand and effectuate the needs of Vermont's senior citizens. The Council and I met earlier this morning and some of the issues we discussed included the need to strengthen senior centers in the state of Vermont by physically improving their facilities, increasing funding for the Older Americans Act, making sure that we protect the Commodity Supplemental Food Program, the congregate meal program and other nutritional programs.
We also intend to work together on senior health issues, affordable housing and assisted living arrangements for seniors and transportation. Obviously, one of the ongoing issues facing seniors and all Americans is the high cost of prescription drugs—despite the Medicare Part D Prescription Drug Program.
The unfortunate reality is that Americans continue to pay, by far, the highest prices in the world for prescription drugs. Because of the escalating cost of medicines, many people do not get their prescriptions filled. That's just not right. It's time for Congress to act decisively to make sure every person in this country can afford the life-saving medicines that he or she needs.
Let's be clear, the high price of prescription drugs is a financial burden that risks the health of seniors. Too many seniors cannot afford to buy their medications and must make decisions between the drugs that keep them well, the food they eat, or keeping their homes warm in the winter. This is a sad fact in the richest nation in the world.
Congress can make a significant difference in the lives of seniors this year. By taking two common sense steps, the cost of medicines for our nation's seniors can be greatly reduced and we can see a great savings in taxpayer dollars.
Medicare Prescription Drug Negotiations
- However, the federal government has a great opportunity to force the pharmaceutical companies to lower prices. By using the enormous buying power of the government, Medicare can negotiate cheaper prices. But there is now a law that says they cannot. This is absurd.
- Congress passed Medicare Part D three and a half years ago, creating a new prescription drug benefit for Medicare beneficiaries.
- Unfortunately, this was a law written by the drug companies. And it has a major flaw, a big hole. Seniors must pay 25 percent of the cost for the first $2,400 of the cost of the medicine. Then seniors must pay all of the costs until their total out of pocket bill for medicines is $5,451. So seniors are caught in what is called the "donut hole"—the price range where covered seniors are forced to pay 100 percent of the cost of their medicines.
- Meanwhile, the federal government is paying $44.7 billion a year for pharmaceuticals.
- With some 22.5 million seniors and the disabled enrolled in the Medicare prescription plans, and more than 780 million prescriptions filled each year, Medicare could use that leverage to drive a better bargain and in the process save money for taxpayers and seniors.
- The Veterans Administration is negotiating drug prices, and it does work. The VA pays less than Medicare for prescription drugs. A Government Accountability Office (GAO) study based on data from the mid-1990s found that average Veterans Affairs prices are less than 50 percent of the non-federal average manufacturer's price. Later, in 2000, the GAO reported that the Department of Defense and the VA paid prices for 21 brand-name drugs were up to 30 percent lower on average than those prices reported by Medicare.
- The issue is that Congress should have two goals: One, to save taxpayer money and, two, to use that savings to fill the hole that too many seniors are stuck in.
- This is also the opinion of most Americans. A December poll by the Kaiser Family Foundation showed that 85 percent favor negotiations to lower prices.
- Unfortunately, the Republican leadership in the Senate is blocking even consideration of this legislation. However, I will continue to press this issue and hope we will see a vote on this important opportunity later this spring.
Pharmaceutical Drug Re-importation
As the first member of Congress to take constituents across the border to highlight the huge difference in prices, I have seen first hand that Americans have to pay up to ten times more than people in other countries for exactly the same medicine.
- Some of the women on the trip bought the medicine their doctor prescribed to treat breast cancer. At that time, the medicine cost around $150 a month in the United States. In Canada, they bought the same medicine, from the same company, made in the same factory, for just over $12.00.
- The drug companies have been fighting back hard with literally hundreds of lobbyists and tens and tens of millions of lobbying dollars and campaign contributions because they know this plan will lower the price of prescription drugs by 30 to 50 percent.
- Since 1998, the pharmaceutical industry has spent over $900 million on lobbying activities, more than any other industry.
- There are over 1,200 prescription drug lobbyists, more than two for every Member of Congress.
- Since 2000, the pharmaceutical companies have contributed almost $250 million in campaign contributions.
- It is not like the Drug Companies are hurting. According to Fortune Magazine, pharmaceutical companies are the 5th most profitable industry in the U.S. And Fortune also reports that the top 19 prescription drug companies in the United States made $42.1 billion in profits in 2005.
- And at a time when prescription drug costs are soaring, Henry McKinnel, the former CEO of Pfizer, walked away with a retirement package worth over $180 million. Meanwhile, the CEO of Eli Lilly made $32 million in total compensation and the CEO of Johnson & Johnson made $28 million in total compensation.