Today U.S. health care spending has reached 16 percent of our gross national product. At the same time, our population is growing older, and the retirement of the “baby boom” generation will substantially increase health care expenditures. No matter what we do to provide coverage to Americans, or to improve the quality and efficiency of care, a failure to manage costs will undermine those efforts.
One area in which I have focused efforts to reduce costs is the increasing problem of the affordability of prescription drugs, where price increases outpace inflation by two to three fold. That reduces access, and as has been said, “A drug one that one cannot afford is neither safe nor effective.”
That is why I joined in a bipartisan effort with Senator Ron Wyden (D-OR) in 2004 to offer legislation to improve our Medicare prescription drug benefit. While millions today benefit greatly from Part D, the cost of prescription drug coverage is far in excess of what the Congress was promised. Today seniors are realizing help primarily due to government subsidy, without the substantial discounting of drug prices we should be seeing. Our legislation – the MEND Act (S.239) – will assure that the HHS Secretary has an appropriate role in drug price negotiation to ensure that seniors and taxpayers realize the savings they deserve. Indeed, achieving modest additional savings on just a single blockbuster drug would save several billion dollars per year. Such savings are essential to making this benefit more affordable and to providing a means to help eliminate the “donut hole” gap in coverage.
Even as Medicare extends substantial help to seniors, many more Americans must bear the full cost of prescription drugs. Yet in other industrialized countries the cost of prescription drugs is 35-55 percent lower. That is why I joined with Senator Byron Dorgan to introduce the Pharmaceutical Market Access and Drug Safety Act of 2005 (S.334) to provide a regulated system for drug importation which will be both safe and effective. In fact, the Congressional Budget Office has projected our legislation would produce direct savings of $50 billion in direct savings alone, with $6.1 billion realized by the federal government. Today the Senate stands ready to pass this legislation, which is supported for by four out of five Americans.
As we approach 2007, we must address costs, and achieving saving on prescription drugs will be an essential part of that effort.