CREATING A MEDICARE PRESCRIPTION DRUG BENEFIT: ASSESSING EFFORTS TO HELP AMER- ICA’S LOW-INCOME SENIORS HEARING BEFORE THE SUBCOMMITTEE ON HEALTH OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION APRIL 17, 2002 Serial No. 107–101 Printed for the use of the Committee on Energy and Commerce ( Available via the World Wide Web: http://www.access.gpo.gov/congress/house U.S. GOVERNMENT PRINTING OFFICE 79–466CC WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate Sep 04 2002 14:30 Sep 25, 2002 Jkt 010199 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 W:\DISC\79466 79466 COMMITTEE ON ENERGY AND COMMERCE W.J. ‘‘BILLY’’ TAUZIN, Louisiana, Chairman MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan JOE BARTON, Texas HENRY A. WAXMAN, California FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts CLIFF STEARNS, Florida RALPH M. HALL, Texas PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey NATHAN DEAL, Georgia SHERROD BROWN, Ohio RICHARD BURR, North Carolina BART GORDON, Tennessee ED WHITFIELD, Kentucky PETER DEUTSCH, Florida GREG GANSKE, Iowa BOBBY L. RUSH, Illinois CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California BARBARA CUBIN, Wyoming BART STUPAK, Michigan JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York HEATHER WILSON, New Mexico TOM SAWYER, Ohio JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland CHARLES ‘‘CHIP’’ PICKERING, Mississippi GENE GREEN, Texas VITO FOSSELLA, New York KAREN MCCARTHY, Missouri ROY BLUNT, Missouri TED STRICKLAND, Ohio TOM DAVIS, Virginia DIANA DEGETTE, Colorado ED BRYANT, Tennessee THOMAS M. BARRETT, Wisconsin ROBERT L. EHRLICH, Jr., Maryland BILL LUTHER, Minnesota STEVE BUYER, Indiana LOIS CAPPS, California GEORGE RADANOVICH, California MICHAEL F. DOYLE, Pennsylvania CHARLES F. BASS, New Hampshire CHRISTOPHER JOHN, Louisiana JOSEPH R. PITTS, Pennsylvania JANE HARMAN, California MARY BONO, California GREG WALDEN, Oregon LEE TERRY, Nebraska ERNIE FLETCHER, Kentucky DAVID V. MARVENTANO, Staff Director JAMES D. BARNETTE, General Counsel REID P.F. STUNTZ, Minority Staff Director and Chief Counsel SUBCOMMITTEE ON HEALTH MICHAEL BILIRAKIS, Florida, Chairman JOE BARTON, Texas SHERROD BROWN, Ohio FRED UPTON, Michigan HENRY A. WAXMAN, California JAMES C. GREENWOOD, Pennsylvania TED STRICKLAND, Ohio NATHAN DEAL, Georgia THOMAS M. BARRETT, Wisconsin RICHARD BURR, North Carolina LOIS CAPPS, California ED WHITFIELD, Kentucky RALPH M. HALL, Texas GREG GANSKE, Iowa EDOLPHUS TOWNS, New York CHARLIE NORWOOD, Georgia FRANK PALLONE, Jr., New Jersey Vice Chairman PETER DEUTSCH, Florida BARBARA CUBIN, Wyoming ANNA G. ESHOO, California HEATHER WILSON, New Mexico BART STUPAK, Michigan JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York CHARLES ‘‘CHIP’’ PICKERING, Mississippi ALBERT R. WYNN, Maryland ED BRYANT, Tennessee GENE GREEN, Texas ROBERT L. EHRLICH, Jr., Maryland JOHN D. DINGELL, Michigan, STEVE BUYER, Indiana (Ex Officio) JOSEPH R. PITTS, Pennsylvania W.J. ‘‘BILLY’’ TAUZIN, Louisiana (Ex Officio) (ii) VerDate Sep 04 2002 14:30 Sep 25, 2002 Jkt 010199 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 W:\DISC\79466 79466 C O N T E N T S Page Testimony of: Braun, Beatrice, Board of Directors, American Association of Retired Persons ........................................................................................................... 70 Fuller, Craig, President and CEO, National Association of Chain Drug Stores ............................................................................................................. 99 Hillerby, Michael D., Deputy Chief of Staff for Nevada Governor Kenny Guinn ............................................................................................................. 92 Lambrew, Jeanne M., Associate Professor, George Washington Univer- sity .................................................................................................................. 63 McClellan, Mark, Member, Council of Economic Advisers ........................... 27 Neuman, Patricia, Vice President, Kaiser Family Foundation, Director of Kaiser’s Medicare Policy Project .............................................................. 78 Tyler, Brian, Senior Vice President for Business Development and Strat- egy, McKesson Corporation .......................................................................... 96 Material submitted for the record by: Braun, Beatrice, Board of Directors, American Association of Retired Persons, responses for the record ................................................................ 136 Fuller, Craig, President and CEO, National Association of Chain Drug Stores, responses for the record ................................................................... 123 Infectious Diseases Society of America, prepared statement of ................... 120 Lambrew, Jeanne M., Associate Professor, George Washington Univer- sity, responses for the record ....................................................................... 132 Neuman, Patricia, Vice President, Kaiser Family Foundation, Director of Kaiser’s Medicare Policy Project, responses for the record ................... 128 Rector, John M., Senior Vice President Government Affairs and General Counsel, National Community Pharmacists Association, prepared state- ment of ........................................................................................................... 114 Tyler, Brian, Senior Vice President for Business Development and Strat- egy, McKesson Corporation, responses for the record ............................... 126 (III) VerDate Sep 04 2002 14:30 Sep 25, 2002 Jkt 010199 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 W:\DISC\79466 79466 VerDate Sep 04 2002 14:30 Sep 25, 2002 Jkt 010199 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 W:\DISC\79466 79466 CREATING A MEDICARE PRESCRIPTION DRUG BENEFIT: ASSESSING EFFORTS TO HELP AMERICA’S LOW-INCOME SENIORS WEDNESDAY, APRIL 17, 2002 HOUSE OF REPRESENTATIVES, COMMITTEE ON ENERGY AND COMMERCE, SUBCOMMITTEE ON HEALTH, Washington, DC. The subcommittee met, pursuant to notice, at 10 a.m., in room 2123, Rayburn House Office Building, Hon. Michael Bilirakis (chairman) presiding. Members present: Representatives Bilirakis, Barton, Deal, Burr, Whitfield, Ganske, Norwood, Cubin, Pickering, Bryant, Buyer, Pitts, Brown, Waxman, Strickland, Barrett, Capps, Pallone, Deutsch, Eshoo, Stupak, Engel, Wynn, Green, and Dingell (ex offi- cio). Also present: Representative Gordon. Staff present: Chuck Clapton, majority counsel; Steven Tilton, health policy coordinator; Eugenia Edwards, legislative clerk; Amy Hall, minority professional staff; Bridgett Taylor, minority profes- sional staff; Karen Folk, minority professional staff. Mr. BILIRAKIS. Good morning. I now call to order this hearing of the Health Subcommittee, and would like to start by welcoming our witnesses and all of the subcommittee members. I would also like to thank our witnesses for taking the time to appear before the subcommittee today. I am sure your testimony will prove valuable as we consider how best to provide our Nation’s Medicare bene- ficiaries with an affordable comprehensive prescription drug ben- efit. Moreover, I appreciate those of you in the audience for attend- ing today’s hearing. I know that you had a choice this morning to view a similar topic. On that point, I would like to reiterate that we are working joint- ly with our colleagues on the Ways and Means Committee to de- velop a comprehensive Medicare bill. I believe it is best for our committees to work together and develop a common package for the House to consider. We took this approach, if you will recall, on developing our Medi- care Regulatory Relief Bill, which seems to be stuck in the Senate, and it proved very effective with the bill passing on the floor by a vote of 408 to zero. Prescription drugs serve as a vital component in the practice of medicine today, and it is unconscionable that our current Medicare program does not include this benefit. Millions of Medicare bene- (1) VerDate Sep 04 2002 14:30 Sep 25, 2002 Jkt 010199 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 W:\DISC\79466 79466 2 ficiaries are finding it increasingly difficult to pay for their pre- scription drugs because they lack adequate drug coverage. Finding some way to help seniors pay for their drug coverage is a top pri- ority not only for me, but I daresay for this entire committee. How- ever, we must do so in a way that protects and strengthens Medi- care and does not bankrupt this very vital program. I firmly believe that one of the greatest legacies we can leave for future generations is a Medicare program that is on sound finan- cial footing, and that is why I would like to think that we are all determined to protect the long-term solvency of Medicare. We are also determined to provide our Medicare beneficiaries with a comprehensive prescription drug benefit that they can af- ford. Such a benefit would preserve individual choice without put- ting an excessive financial strain on the program. We will continue working to ensure that this vision becomes a reality as soon as pos- sible. I also believe that limited Federal resources should be targeted toward areas where they will have the greatest impact. There are millions of Americans who are suffering now, and as