Debbie Stabenow

Ms. STABENOW

Ms. STABENOW. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Ms. STABENOW

Ms. STABENOW. Madam President, I rise this morning to comment on another very important topic that is before us and to urge my colleagues to come together to get something done. We have been talking a lot about Medicare and the fact it is outdated, that it needs to be modernized to cover prescription drugs. We had a very significant vote 2 days ago. It was historic. It was the first time the Senate, since 1965, has come together to vote to modernize Medicare. A majority of us, 52 Members, voted yes. I commend my Republican colleague--which was the one Republican vote joining us-- the Senator from Illinois, for joining us in that effort. A statement was made by a majority of the Senate, and I believe it reflects the will of the majority of Americans. We have a health care system for older Americans, a promise of comprehensive health care for older Americans and the disabled that was put into place in 1965. It has worked. The only problem is that the health care system has changed. We all know that. We have all talked about it many times. What I find disturbing at this moment, in light of the fact that we need 60 votes--we need 8 more people; we need 8 of our Republican colleagues from the other side of the aisle to join us to actually make this happen--in light of the success of Medicare, too many times I am hearing words such as ``big Government program'' from my Republican colleagues in the House. They refer to Medicare as a ``big Government program,'' and there are times I have heard that in this debate from the other side of the aisle. I am here to say I think Medicare is a big American success story. It is a big American success story, just as Social Security is a big American success story and one that we should celebrate. I worry, as I hear comments from our President about moving in the direction of wanting to privatize Social Security, wanting to move Medicare to the private sector and privatize it, that we are moving away from not only a commitment made but a great American success story. It has worked, and I think often now of those people such as Enron employees or WorldCom employees who have lost their life savings who have said to me: Thank God for Social Security and Medicare or I would have nothing. If Medicare was not there, they would have no health care. These are great American success stories. At this time in 2002, at this moment in July, we have an opportunity to make history so that when others read the history books and look back, they will find we took the next step to modernize a system that provided health care for older Americans and the disabled for over 35 years. I want to read a couple of stories from Michigan. I have set up a prescription drug people's lobby in Michigan and asked people to share their stories and to get involved because we know there is such a large lobby on the other side. As we all know and have said so many times, there are six drug company lobbyists for every one Member of the Senate. Their voice is heard every day. It is also heard on TV. It is heard on the radio. There is a full-page ad in Congress Daily from the drug company lobby that was brought to my attention urging us to oppose the amendment we passed to open the border to Canada. Heaven forbid that we add more competition. Heaven forbid that American citizens be able to buy American-made drugs that they helped create through taxpayer dollars, but they are sold in Canada for half the price they are sold in the United States. Heaven forbid that American consumers would have the chance to do that. So they have an ad, and I am sure there are many more. I am not sure how much it costs. I prefer the money that is being spent on this ad and other ads on television and the $10 million being spent on ads supporting the drug company version would be put into a Medicare benefit or lowering prices. That would be certainly much more constructive in the long run. The reality is that something has to be done because the system is just out of control, and it will not change unless we act because there is too much money at stake. Just as we have debated corporate responsibility in other settings--and I applaud colleagues who have come together to agree on a final plan related to legislation for corporate responsibility and accountability--this, too, is an issue of corporate responsibility, corporate ethics, as it relates to pricing lifesaving medicine. And how far is too far? Let me share stories that have come to me from various individuals in Michigan. This is one from Christopher Hermann in Dearborn Heights, MI. He writes: I am a nurse practitioner providing primary care to veterans. I am receiving many new patients seeking prescription assistance after they have been dropped by traditional plans and can no longer afford medications. Many of them have more than $1,000 a month in prescription drug costs. The vets are lucky. We can provide the needed service. Their spouses and neighbors are not so lucky. I also have such a neighbor. Al is 72, self-employed all his life with hypertension. When he runs out of his meds due to lack of money, his blood pressure goes so high he has to go to the emergency room and be admitted to prevent a stroke. I provide assistance through pharmaceutical programs, but this is not guaranteed each month. We either pay the $125 per month for his medications, or Medicare pays $5,000-plus each time he is admitted. It is pretty simple math to me. It is pretty simple math. We can either help people with their blood pressure medicine or medicine for their heart or medicine for sugar and all the other issues that need to be dealt with or we can pick up the pieces with hospitalization or worse that ultimately costs more to the system. I very much appreciate Christopher Hermann sharing this story. I will not share more this morning. I thank those who have been sharing their stories with me. I will close with one other story that was shared with me that has stuck with me since I read it a few weeks ago, and that was a little girl from Ypsilanti, MI. I have talked about this before, but I think this is important to remind us of what this legislation is about. She wrote a letter to me telling me that her grandma stopped taking her medicine at Christmas in order to buy Christmas presents for the grandkids. She later had health problems and passed away. There is something wrong with the United States of America when grandmas are not taking lifesaving medicine to buy Christmas presents for their grandchildren. Ultimately, that is what this debate is about. It is about taking a great American success story, called Medicare, and simply updating it for the times. Let's say no to the drug companies and yes to all the grandmas and the grandpas across the country and to everyone who is counting on us to do the right thing. I thank the Chair, and I yield the floor.

Ms. STABENOW

Ms. STABENOW. That is exactly where we stand. My friend from North Dakota is correct. That is exactly where we stand. The question is, Will the minority be able to block what the majority of people want to have happen? Turning back and asking my friend a question as well, I want to say for those who are watching today, there is a way to express yourself. We certainly hope you will engage with your Senator. You can also go to fairdrugprices.org and be part of an online petition drive urging the Senate to act, and share your own individual story. We have never had a more important time for people to be involved. We need people now to be involved. There are six drug company lobbyists for every one Member of the Senate, but the majority of the people in this country, regardless of where they live, know that we need action for them now, and that is what this is about. Since my colleague has been a leader in another important effort, lowering prices for everyone, which is the other piece of the puzzle, we want to make sure Medicare is updated to cover prescriptions for those on Medicare, and that is critical. But for everyone else who is not on Medicare, they also pay too much, and there are a number of efforts we are equally engaged in to get more competition, to lower prices for everyone, and I wonder if I might ask my colleague to speak to that specifically, since we have joined in efforts to open the border to Canada, and other efforts. I know that the Senator has been very involved in those efforts to create more competition.

Ms. STABENOW. Mr. President, I rise today, as I have now for many weeks, and in particular in the last 2 weeks, focusing on prescription drugs, which is another disaster, quite frankly, that has been facing our seniors, our families, our farmers who are trying to find health insurance for their families, our small businesses that are seeing their health care premiums double in some cases, trying to afford health care for themselves and their employees. I rise on behalf of those workers who have had their employer say: You are going to have to take a pay freeze this year because we have to have money to pay for health care benefits. I rise for those manufacturers that are seeing an explosion as well, and basically for everyone who is paying the price for the explosion in prescription prices, and the system that is basically out of control. We have been working hard in the last week and a half. I think we are making some progress, but we are not there yet. Yesterday, we had an opportunity to vote on two different plans before the Senate. One was a plan to strengthen Medicare, to put a system in place that was promised in 1965 with the advent of Medicare: That once you are 65 or you are disabled, you will know that health care is available for you. We all pay into the system. The promise was made, and we have been trying to update and modernize that system to reflect the way health care is provided today, which is primarily on an outpatient basis with prescription drugs. Yesterday, we had that plan that would pay the majority of the bill and would do it within Medicare, which we know works. Then we had another plan much more focused on private insurance, HMOs, and I believe a step in privatizing the system. Quite frankly, that is supported by the drug industry, the pharmaceutical industry that has a situation right now for them that is too good to give up voluntarily. They fight everything. They fight any effort to modernize Medicare, to put 40 million people, seniors and disabled persons, in one insurance system because they know that if 40 million seniors and disabled persons are in a system together, they will be able to get a group discount, like all the other insurance companies. They are fighting that. They know when the Federal Government goes to buy for veterans in the VA hospitals, we do not pay retail, we get a discount on behalf of the veterans. The outrageous part of the system today is that the only people who pay retail, the only people who walk into the pharmacy and have nobody negotiating on their behalf, are the seniors of this country and those who are disabled and need help with health care. Everybody else gets a discount. So we are trying to change that. The companies are fighting us every step of the way. I think we did something historic yesterday. We did not get all the way to where we need to be, but for the first time in the Senate--52 people, a majority of our colleagues--voted for a Medicare prescription drug benefit. Unfortunately, in this process we need to get to 60 votes, but I believe we sent a very strong message with 52 people--and the other plan, in fact, had fewer; I believe it was 48 people that voted for that plan. So fewer than the majority voted to move in the direction of privatizing, to set up a system that is much more favorable to the drug companies. A majority of us, in fact, said we want to do this under Medicare; we want to pay the majority of the bill for our seniors. I am very hopeful that now we will be able to bring enough of our colleagues together, on both sides of the aisle, to be able to get those eight extra votes for something that moves us in the right direction. We know it is not going to be all that we had originally hoped, but I desperately hope the drug companies are not successful again in stopping anything real from happening. I believe this is a point in history that people will look to just as they will look to 1965, and it is up to us to show that we will do the right thing.

Ms. STABENOW. Absolutely.

Ms. STABENOW. I thank my colleague from North Dakota. To support the comments of the Senator from North Dakota, it is so frustrating to look at what is happening, and I think so unfair for consumers in the United States, taxpayers, and ratepayers. People say: How can this happen? The reality is that today, while the companies say, oh, no, they cannot possibly lower prices at all because they would have to cut research, we know today that they spend two and a half times more on advertising, marketing, and administration than they do on research. When we look at the numbers for last year, the top companies' profits were three times more than they spent on research. This is not about research. We all are for research and, as my friend from North Dakota indicated, we as taxpayers fund research. This year we will contribute over $23 billion to basic research. I support that. I support doing more than that. It is an important investment. After we do that, the companies take the basic information and see if they can develop new lifesaving medicine. That is great. However, we give tax deductions for research, as well as advertising and other costs of doing business. When they get to the point where they actually have a new drug, we give them a patent of up to 20 years to protect their competitive edge, their brand name, so they can recover their research costs. We know it costs a lot of money to develop a lifesaving drug. We want to make sure it is a good investment and they can recover their costs. The problem is, we get done with all of this and what do we have? The highest prices in the world--higher than anyone else. If you are uninsured and using medications--which is primarily the seniors of this country--and you walk into your pharmacy, you get the great pleasure and honor of paying the absolutely highest prices in the world. That is outrageous. That is what we are trying to fix, both by making sure the health care system works with medications through Medicare, and also making sure that we have greater competition, that we address the outrageous spiraling prices and we can bring those down for everyone. That is the point of the debate. We made some progress through amendments last week on cost containment. Yesterday we had an important debate on Medicare coverage. The question now is whether or not we will be able to get this done on behalf of the American people. I am hopeful we will be able to do that. I am happy to yield to my friend.

Ms. STABENOW. The Senator is absolutely correct. There is not a free market. There are barriers placed in the way from real competition, real trade across the border, and there are ways now that the companies stop competition--buying up generic companies and blocking other competition. I say in conclusion, unfortunately, we cannot just say, let the free market prevail. We are not talking about optional products. We are not talking about a family saying, we cannot afford a new car this year, we will wait; we cannot afford a pair of new tennis shoes or lawn equipment. We are talking about lifesaving medicine. Sometimes when people have to wait, they do not survive. This is different. We have to be serious about the difference. I urge my colleagues to come together and get something done.

Ms. STABENOW. I would be honored to yield to my friend from North Dakota, who has been such a leader in this effort.

Ms. STABENOW

Ms. STABENOW. Mr. President, we are playing revolving chairs today. It is a pleasure to be in the Chamber with you. I indicate to my colleagues--the Senator from Nebraska and my colleagues from Minnesota--that I completely understand and support what they are fighting for and join them in that fight. We also have had in northern and western Michigan disasters that happened as late as this spring where we have seen our cherry crop wiped out because of extremely hot weather, in the nineties, and then immediately going into freezing temperatures. We have seen our orchards literally wiped out in terms of the ability to produce cherries and other crops. When this happens to our farmers, it is critical we step forward in a bipartisan way and do everything we can to support them to get through this year, to get through these disasters.

Ms. STABENOW

Ms. STABENOW. Mr. President, I rise to join with my colleague from Maryland who spoke so eloquently about the need for real Medicare prescription drug coverage. I thank her for her leadership for our seniors over the years, both in Maryland and around the country. I join her today, and I would like to start by sharing some additional stories, some voices from Michigan. I have been inviting people to join me in a prescription drug peoples' lobby. The idea of the people's lobby is to counter the huge special interest lobby in the form of the prescription drug lobby that we see every single day. We know there are six drug company lobbyists or more for every Member of the Senate. Yet what we are doing here is so important to people--businesses, farmers, seniors, families--and their voices need to be heard in this debate. I am very confident, if their voices are heard, the right thing will be done. So I would like to share a story from Christopher Hermann from Dearborn Heights, MI. He writes now as a member of our People's Lobby: I am a Nurse Practioner providing primary care to Veterans. I am receiving many new patients seeking prescription assistance after they have been dropped by traditional plans and can no longer afford medications. Many of them have more than $1,000/month in prescription costs. The Vets are lucky! We can provide the needed service. Their spouses and neighbors are not so lucky. I also have such a neighbor. ``Al'' is 72, self-employed all his life with hypertension. When he runs out of his meds due to lack of money, his blood pressure goes so high, he has to go to the emergency room and be admitted to prevent a stroke. I provide assistance through pharmaceutical programs, but this is not guaranteed each month. We either pay the $125.00 per month for his medications, or Medicare pays $5,000.00 plus each time he is admitted. It's pretty simple math to me. I would agree with Mr. Hermann that it is pretty simple math, that what we are talking about is saving dollars in the long run by helping people stay out of the hospital and remain healthy. It is important that it be a real program that is defined, that folks can count on every month. Let me also share a story from Debbie Ford from Clio, MI, who called my office. Her 72-year-old mother cannot afford a supplemental, so the family pays for her prescriptions. This is a very common story, as I know the Presiding Officer knows. She is the widow of an ironworker whose pension continued for only 10 years. She gets what assistance she can--food assistance, energy credits--but no medication assistance. Her Social Security disability is $800 a month. She has resorted to pill splitting and borrowing medication from others who have prescription coverage. This is the greatest country in the world. This is the United States. We should have folks having to either split pills or borrow medication in order to get what they need to live. Let me also share something from Myra McCoy of Detroit, MI. She says: I receive disability due to a number of medical problems; it is not a choice for me. My poor health has been the hardest thing I have ever had to deal with in my life and it started at age 35, my whole life over. I have lost so much and the depression has made it so bad, I'm in so much debt for medication, I have a second mortgage I can't afford because of my medication. I've been robbing Peter to pay Paul for medication and trying not to lose my mind in the process. It is hard to talk about this even after ten years. I hope something can be done about the high cost of medication. We do live in a time of damaged care, if I could work again I would just to cut the cost of my medication. I would like to know what has to happen to make sure all people get treated fairly! I thank Myra for sharing this as a part of the People's Lobby. Now is the time to get it right, to make it fair, to make prices affordable for everybody, and to have a real plan. What do we have in front of us? We have two kinds of plans: One passed by the House, a similar one called the tripartisan plan supported by my good friend from Vermont and Senator Breaux from Louisiana, joining with the Republicans in this plan; and then we have a separate plan which is being supported by the Democrats in the Senate. What are the differences? What does it mean to the people I have been talking about today, and so many others? The question is, Which plan guarantees seniors a defined benefit and premium? They know they receive the benefit, and they know what the premium will be every month. This is a pretty important issue to folks--to have a regular benefit, and they know what it is, they know what it will cost. The Democratic plan will provide that. The other plans--Republican or tripartisan--will not. Seniors receive the same benefit regardless of where they live. That is a very important issue. Whether you are in the upper peninsula of Michigan or the southwestern tip of Benton Harbor, St. Joe or Detroit or Saginaw or Bay City or Alpena, it should not matter where you live, you should be able to have the predictability of knowing the same plan exists with the same premium for you. The Democratic plan does that. The other plan in front of us does not. Seniors are guaranteed affordable coverage throughout the whole year. People debating this issue have talked about the so-called doughnut hole. People probably think we are debating breakfast or something, but the reality is, there is a gap in every plan, except the Graham-Miller- Kennedy plan, supported by the majority. For the other plans, you would be paying all year but there would be part of the year--in some cases a majority of the year--where you would not receive any help, even though you have to continue to pay. I do not think that is a very good idea. The plan that we have in front of us, the Graham-Miller-Kennedy plan, would guarantee people that if they pay all year, they get coverage all year. Another important principle: Seniors are guaranteed access to local pharmacies and needed prescriptions. Under our plan, yes; under the other plan in front of us, no. And then, finally, seniors retain their existing retiree coverage. This is very important. I have a lot of retirees in Michigan, retired autoworkers and others, who have coverage and we want to make sure they can keep their coverage. Our plan would say yes to that; the other plan would say no. On the last point, let me share that the Congressional Budget Office has estimated that a similar provision to the one that is in the tripartisan plan, a similar provision that was in the House plan would prompt about one-third of the employers to drop retiree coverage. This translates into about 3.6 million seniors who would lose their coverage. That is not a good deal. What we have in front of us is an optional plan, optional under Medicare, so you can get the full clout of Medicare and get a group discount. People are covered all year. It is affordable. It is reliable. It has a premium of $25 a month. It is clear. Every month you pay you are getting help with your bill. It is a very clear, straightforward effort to make sure that low-income seniors are fully covered, without out-of-pocket expenses. And we make sure that we keep intact Medicare because one of the real concerns I have, in the long run, is that by forcing seniors to retain coverage through private drug-only insurance plans or HMOs--such as the tripartisan plan does--I am concerned that ultimately we are moving to a privatization of Medicare. It certainly is a step in that direction, which would be certainly something that I would strongly, strongly oppose. So I say to people today--even though we are voting today--if there are not the votes for either of the two plans in front of us, we are going to be continuing to work in a direction to get the kind of plan that we need. I urge people across the country to get involved and go to a Web site that has been set up--fairdrugprices.org--to sign a petition, to get involved, to share their story, to make their voice heard in this debate. There is nothing more important than the debate in front of us--to the economy, to the cost of business, to the out-of-pocket expenses for our seniors and for our families. It needs to be done right. We have the right plan. I urge my colleagues to support the Graham-Miller-Kennedy plan. If, in fact, that is not adopted, I urge that we keep these principles in whatever plan that we are able to construct. Thank you, Mr. President. I yield the floor.

Ms. STABENOW

Ms. STABENOW. Madam President, can you give us an indication of the time remaining to each side?

Ms. STABENOW. Madam President, I yield myself 4 minutes. Madam President, first of all, I want to speak to my colleague from Oklahoma. My mother grew up in Oklahoma, and I have a great affinity for that State. I have a lot of relatives there. But I was quite surprised to hear the comment that ``if it ain't broke, don't fix it,'' when we are referring to Medicare. When we look at the Medicare system and the inability to cover prescription drugs for our seniors, when we look at the explosion in the price of the prescription drugs, I would say it is very tough to find a system that is more broken than our inability today to provide low-cost prescription drugs, whether it be through Medicare or whether it be a small business or a farmer trying to get coverage for their family. This system is broken. That is why we are here. It needs to be fixed. I rise in opposition to the Hagel amendment. I appreciate the desire of my colleagues to find an alternative, but I certainly am concerned that this does not begin to address what it is that seniors in this country are needing or asking them to do. There seems to have been a lot of confusion about where AARP is regarding this issue. So I will read a letter sent to the author of the amendment on July 23--today-- which says: Dear Senator Hagel: Enacting a comprehensive prescription drug benefit in Medicare this year remains the top priority for AARP. Our members are counting on the Senate to pass a meaningful drug benefit that is available and affordable to all beneficiaries. Our members were promised in the last election that a comprehensive drug benefit would be a priority, and we are counting on you to make good on that promise this year. We appreciate the intent of your bill, S. 2736, the ``Medicare Rx Drug Discount and Security Act of 2002,'' to provide a prescription drug discount card and stop-loss protection to Medicare beneficiaries. However, in addition to our substantive objections, we are concerned that by offering this scaled-back proposal today, you would effectively derail bipartisan discussion and compromise on more meaningful comprehensive approaches. We believe Congress should focus its efforts on enactment of a more comprehensive drug benefit this year. In addition to the timing of your proposal, AARP has concerns about the approach taken in your bill, including: Catastrophic coverage--While AARP has not opposed income- relating premiums, income-relating the Medicare benefit changes the nature of the program. This would set an extremely dangerous precedent in Medicare. Further, the stop- loss levels set in the bill do not provide enough protection for lower income beneficiaries. A low-income couple could spend 25 percent of their income just for drugs before this plan offered assistance. Thirdly, there are a number of issues involved in using tax returns to determine program eligibility levels, and we believe other options should be explored. Discount card--While AARP supports the use of a discount card program as a building block for a Medicare prescription drug benefit, your proposal lacks the necessary specifications to guaranty the level of discount, what level of discount would be passed to beneficiaries, and the degree to consumer protections required of plans. Given these concerns, AARP opposes your amendment. We remain fully committed to developing a comprehensive drug benefit for all Medicare beneficiaries and we look forward to working with you on legislation that our members can support. This is signed by the executive director and CEO of AARP. I simply wanted to enter that into the Record to make it clear that AARP joins us in opposition to the amendment.

Ms. STABENOW. Madam President, I will simply say in closing that AARP, representing seniors, and other senior organizations across this country do not believe this, in fact, is a good deal. There is no question they want action now, but it has to be real and meaningful. Discount cards are available now. In many cases, they do not work at all or they are very limited. It is important we be responsible. I would argue there is a broader responsibility in the Senate. When we debate whether or not the tax cut geared to the wealthiest individuals in the country will be extended another 10 years, we are debating an amount of money that is more than four times any comprehensive Medicare plan that we will have before us. This is a question of priorities. It is a question of what we believe, as Americans, should be our values and how we act on those in terms of our priorities, and I argue that doing the right thing with the real Medicare benefit is what our seniors are asking for and it is what they deserve. I urge my colleagues to vote no on the Hagel amendment.

Ms. STABENOW. I was looking forward to what the Senator might say in 5 seconds.

Ms. STABENOW. Does the Senator from Nebraska wish to take his 5 seconds?

Ms. STABENOW

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to hold a Hearing during the session of the Senate on Thursday, July 18, 2002, at 2:30 p.m. in SD-366. The purpose of this hearing is to receive testimony on the following bills: S. 1865, to authorize the Secretary of the Interior to study the suitability and feasibility of establishing the Lower Los Angeles River and San Gabriel River watersheds in the State of California as a unit of the National Park System, and for other purposes; S. 1943, to expand the boundary of the George Washington Birthplace National Monument, and for other purposes; S. 2571, to direct the Secretary of the Interior to conduct a special resources study to evaluate the suitability and feasibility of establishing the Rim of the Valley Corridor as a unit of the Santa Monica Mountains National Recreation Area; S. 2595, to authorize the expenditure of funds on private lands and facilities at Mesa Verde National Park, in the State of Colorado, and for other purposes; and H.R. 1925, to direct the Secretary of the Interior to study the suitability and feasibility of designating the Waco Mammoth Site Area in Waco, Texas, as a unit of the National Park System, and for other purposes. THE PRESIDING OFFICER. Without objection, it is so ordered. committee on environment and public works

Ms. STABENOW

Ms. STABENOW. Mr. President, I appreciate very much being recognized and having an opportunity this morning to speak regarding the situation I believe we are in and the challenges right now as they relate to moving forward on addressing prices and cost containment in the pharmaceutical industry. We heard a lot of discussion yesterday. We had the opportunity to debate whether to open the border to Canada to have more competition between the prices that American companies charge in the United States and those in Canada. I was pleased we were able to move forward and come together on a plan to open the border, and now we place it in the hands of the Secretary of Health and Human Services to certify the difference in prices which we know are there and the fact that there is no safety risk, which we know is the case. So I look forward to moving ahead. A lot came up during that debate and I did want to, as we set the stage to debate additional efforts today to lower prices, speak as to how I view the situation in our country right now with our most profitable industry. I welcome the fact that we have a very profitable, successful prescription drug industry. There are new lifesaving drugs being created that keep people out of the hospital and living longer. We celebrate that. Over the last several years, we have seen more and more of a focus on selling and marketing and promotion than creating the next generation of lifesaving drugs. That is of great concern to me. When we talk about reducing prices, we hear that means reducing research and development. Yet there is nothing today that indicates that is factually accurate. Yesterday, Family USA produced another study showing the companies are spending 2.5 times more on advertising, promotion, marketing and administration than they do on research and development. The blue on my chart is R&D and the gold is advertising and marketing. For each of the top drug companies, the gold line is much higher than the blue line. We know there is more being spent in this effort. We also know when you look overall at the profits versus R&D, we see stark numbers. Merck is a successful company in the United States. Their profit was three times more than what they spent on R&D last year. I do not begrudge that profit margin, but if we are going to have the next generation of new lifesaving medications, we need to see that R&D is the focus and that prescriptions are affordable. If they are not affordable, they are not available. That is not acceptable. This is about trying to get some balance in the system. Pfizer had 1.5 times more in profit last year than what they spent on R&D. They spent more on advertising than on R&D. In the context of what we are talking about right now with corporate responsibility, and companies where executives take the dollars and run, leaving the shareholders or employees holding the bag, my concern is that while we are talking about the need to stop prescription drug prices from rising three times the rate of inflation, which is the average right now--the average drug used by seniors last year went up three times the rate of inflation. Our seniors do not have insurance coverage and are paying the highest prices in the world--but these companies are making top profits in the world today, and we find astounding salaries in compensation for the CEOs. I do not begrudge it, but I do when our average senior is deciding this morning: Do I eat breakfast or do I take my medicine? Companies are saying, no, they cannot lower prices; they could not possibly have more competition, they cannot open to Canada, they cannot allow more generics on the market, they cannot possibly handle more competition, or lowering prices without cutting R&D. I am offended when I look at the numbers, when we are seeing more on promotion and advertising, more on the sales machine than on research and developing new drugs, more in profits, way more in profits than R&D, and more in the compensation for those at the top. I will not name individuals, but we see the five highest paid executives in the industry, and the top at Bristol-Myers, with a salary of almost $75 million last year in direct compensation, not counting unexercised stock options. Compare that to the average senior who is either not getting their medicine, cutting their pills in half, or taking them every other week; families who are struggling; small businesses whose premiums are skyrocketing and are having trouble affording health care for their employees because of 30 to 40 percent premium increases, mostly because of prescription drugs, and employees are told they cannot get a pay raise next year because the company has to cover more in medical premiums. I believe that company is sincere in having to struggle with those benefits, those prices. Put that picture together with that of the drug companies, one of the most highly subsidized industries in the world: $23.5 billion we as taxpayers put into the National Institutes of Health this year. So the companies can take that basic research, and I support that--I would support more--they take that basic research, and they then develop their drugs. We give them tax credits and tax writeoffs to develop through research. We also give them tax writeoffs for their administration, their sales, their marketing. We give them a 20-year patent so they are protected from competition for their name brand so they can recover their costs for R&D. What do we get at the end? The highest prices in the world, and an effort to fight everything we are trying to do in the Senate--to increase competition and to lower prices and to provide Medicare benefit. Then to add insult to injury, we see those at the top of the companies that who are fighting us earning $75 million a year, $40 million a year, $28 million, $23 million, $15 million a year. We see unexercised stock options. At the top is Merck, $93 million in unexercised stock options; $76 million; $60 million; $56 million; $46 million. I could live on that. I think everybody within the sound of my voice together could live on that. I don't begrudge that. But I do begrudge people in that category heading companies that fight everything we do. They have put more money into their lobbying corporation than anybody else. For every one Senator there are six drug company lobbyists who spend their time more on sales and marketing than anything else. Let me speak from the standpoint of our future health care discoveries. In Money and Investing, the Wall Street Journal, there was an article about a merger this week, and one of the disturbing parts of that was this: After falling for 5 years, new drug applications to the Food and Drug Administration are expected this year to slide further. Through the first 5 months of this year, the FDA had received just two new applications for new drugs. Last year, total new drug applications dropped to 24, less than half the 53 received in 1996. Many in the industry say that past mergers may be among these reasons for these drops in new drug discoveries. What I see is an effort more and more to focus on the fast, easy money, the quarterly report. Eighty percent of the new applications for patents now at FDA are not for new lifesaving discoveries that increase our longevity and deal with health challenges, but they are, instead, what are called ``me too'' drugs; 80 percent of the patents. A purple pill becomes a pink bill, a daily dose becomes a weekly dose, or maybe, to add insult to injury, the packaging changes. I urge, as I draw to a conclusion, that as we look at the issues before the Senate on increasing competition and lowering prices, we do so understanding there is a lot of room to bring down prices without ever touching R&D. I argue we need to do everything possible to change the incentives to a longer view, to more research and development. This industry is out of whack, just as the other industries we were talking about, the system of accounting and auditing, the whole process that has now put us in a position where the incentives are to run right up to the line or over the line, to push for the quarterly profit statement, to look for the intermediate gain, the immediate cash rather than the long-term view. Unfortunately, this is not a pair of shoes. It is not even a new car--and I want everybody to buy a new car. This is not an optional buy. This is lifesaving medicine. The research is heavily subsidized and paid for by taxpayers, and I think we deserve better. I think that is what this debate is about. We want a healthy industry, we want R&D, but we want the American taxpayers to get their money's worth and be able to afford the medicines they have invested in and helped to create, medicines that will help them and their families be able to be healthy.

Ms. STABENOW

Ms. STABENOW. Mr. President, I will be pleased to yield some time to my friend from Pennsylvania. I am not sure what he is asking for at this point. I need to preside at 10 a.m., and I know we have other colleagues coming, but I will be happy to yield.

Ms. STABENOW

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.

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. 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.

Ms. STABENOW. I thank both of my friends and colleagues, who are such champions on this underlying issue--the entire issue of Medicare and prescription drug coverage and lowering prices. In fact, as our leader, the Senator from Massachusetts, indicated, this is a measure that is a bipartisan amendment. We have Governors--frankly, the majority of Governors--Republicans and Democrats, who are struggling with this question of lowering prices and making prescription drugs and lower prices available to their citizens. So as the National Governors Association is meeting right now, they have said their biggest challenge is the price of prescription drugs and the explosion, in their budget, of Medicaid. They need to address these issues. This amendment will support the Governors across the country. It is a bipartisan amendment. It is something supported across the country on a bipartisan basis. I am very hopeful that we will have colleagues' overwhelming vote on both sides of the aisle supporting the effort to say yes to this innovation of the States. This is not mandatory, it is purely based on States taking action on their own to decide if they would like to do this. If they do that through their State legislatures and the Governors on behalf of their people, this simply says that this is legal and that, hopefully, it will stop the suits PhRMA has been bringing against our State governments.

Ms. STABENOW. Madam President, I think my friend from Oklahoma knows that in fact that did not have a hearing. That is not unusual. That happens sometimes in the process. I have only been here 1\1/2\ years. But there are many times when that has occurred. The Senator is correct. That has not occurred on this bill.

Ms. STABENOW. Will the Senator yield?

Ms. STABENOW. Will my friend from Oklahoma yield for a question?

Ms. STABENOW. I am wondering if you are saying for the future, then, any amendment that comes to the floor that has not gone through a committee or subcommittee, you intend to oppose from here on out? Is that correct, for as long as you and I are here in the Senate, you would, in fact, oppose any amendment that comes before us that way?