Grassley Speaks to Fiscal Responsibility of Prescription Drug Bill; Announces Updated Bill Coming Soon
Nov 21, 2019
Prepared Remarks by U.S. Senator Chuck Grassley of Iowa
Chairman, Senate Finance Committee
Summit on Health Care Savings: Committee for a Responsible Budget
Thursday, November 21, 2019
Thank you, President MacGuineas, for that kind introduction.
Good morning, everyone. And a special thanks to the Committee for a Responsible Federal Budget for all the work you do to encourage lawmakers to take a fiscally responsible approach to governing.
Thanks as well to the West Health Policy Center for all you are doing to foster public debate on ways to save taxpayer and patient dollars by making our health care system more efficient and accountable.
The launch of the Health Savers Initiative couldn’t come at a better time.
I don’t recall ever meeting anyone who said health care costs were too low.
In fact, high health care costs consistently rank as one of the top concerns Iowans raise at my annual 99 county meetings.
Between the skyrocketing prices of prescription drugs, surprise medical bills, and ever-increasing insurance premiums and co-pays, health care is breaking the bank for millions of Americans every year.
A recent poll by Gallup conducted in partnership with West Health found that one-in-five American adults said they couldn’t afford the medicines they needed.
And 34 million Americans said they knew someone who died because they couldn’t pay for the treatments they needed to survive.
As the richest country in the world where the most miracle, live-saving drugs are created, that’s a real shame.
And it’s something we simply have to address if we want to continue to be the country that not only invents cures, but delivers cures to Americans in need.
Now, I’m saying what you already know here, but balancing the federal budget is no easy task.
Putting both parties’ spending wish lists on the national credit card seems to be the only way we’re even able to pass a budget these days.
That poor habit is setting up our country for big fiscal problems down the road.
And that’s why today I want to talk to you about some of the biggest ways we can save taxpayer dollars and put programs we all care about, like Medicare, on a stronger financial footing.
Earlier this year, the Senate Finance Committee passed the bipartisan Prescription Drug Pricing Reduction Act.
This legislation includes the most significant reforms to Medicare in nearly a generation.
And that was the last time I led the Finance Committee, under President Bush, when I authored the legislation that created the Part D program in Medicare.
Its free market structure has worked well.
It’s one of only a few major federal government programs to ever come in under budget.
While I’m committed to maintaining Medicare Part D’s free market structure, what cannot continue are the staggering, year-after-year price increases that far outpace inflation.
Not only is the status quo unsustainable from a budget perspective, but it’s not fair to ask taxpayers and patients to continue to foot the bill, no questions asked.
I’m not one to vilify private individuals or businesses seeking to make a profit.
After all, capitalism is the foundation of our nation’s economy.
It has lifted billions out of poverty worldwide.
And its incentive structure has created a system that’s led to the development of new treatments that save and extend countless lives every day.
But we also must recognize that when it comes to federal health care programs like Medicare, where the government has already inserted itself into the market, we have a duty as legislators to protect the taxpayers.
That’s why pharmaceutical companies will be able to recover their research and development costs for past and future drugs when they launch a new medicine.
And make serious profit on top of it.
But what they won’t be able to do is continue hiking prices past the rate of inflation every year.
This unjustifiable practice must end if there is going to be any sanity in our prescription drug market or if there is going to be any fairness for taxpayers.
Reforming federal entitlement programs is often referred to as the ‘third rail’ of American politics for the electoral consequences that seem to befall anyone who dares.
But we’ve flipped the conventional wisdom on its head by not only saving taxpayers more than $100 billion, but by increasing benefits to beneficiaries.
Our bill would lower beneficiaries’ premiums by $6 billion, reduce their out-of-pocket costs by $25 billion, and even lower drug prices in the commercial market.
And that’s not just Chuck Grassley saying that, that’s according to the independent Congressional Budget Office.
This bill is the only comprehensive, bipartisan prescription drug legislation currently being debated in Congress.
But we’re not done yet. Right now, Ranking Member Wyden and I are working to further improve our legislation by delivering more savings to beneficiaries.
This updated version of the Prescription Drug Pricing Reduction Act will improve the out-of-pocket cap by giving seniors and Americans with disabilities more flexibility when it comes to upfront costs.
It will also include improved mechanisms to reduce what consumers pay out-of-pocket when they go to the pharmacy.
In the coming weeks, we’ll be releasing this amended legislation.
We hope these changes will help the bill garner the support we need to turn it into law this year.
It will be important for Congress to continue working to lower health care costs in other areas too.
Spending on prescription drugs accounts for about 9% of national health expenditures.
It’s a big part of the problem, but more must be done to lower health care costs in other areas.
I’ve greatly appreciated the Trump administration’s efforts to lower costs for Americans, and in particular the recent focus on bringing about much-needed transparency to the health insurance and hospital industries.
It’s going to take hard work in both chambers of Congress and all corners of the Administration if we’re going to achieve truly affordable health care in America.
And with that I’d like to say that I’m very glad that my friend, Senator Wyden, is also here today to talk about our bipartisan bill.
I often say that in the United States Senate, nothing gets done unless it’s bipartisan.
And so at the beginning of this year, Ranking Member Wyden and I sat down together and agreed to take a bipartisan approach to lowering the price of prescription drugs.
I’d like to thank Senator Wyden for his hard work and his understanding approach when crafting this bill with me.
Because of his dedication to compromise and to good faith negotiations, lower prescription drug prices are in sight for tens of millions of Americans.
Now it’s up to our colleagues in Congress to join us in this effort and finally deliver what our constituents have been demanding.
I’m hopeful we can achieve more affordable health care for taxpayers and patients very soon.