Chuck Grassley: “I wish to emphasize: We have a cost underrun in a Federal program. When have you ever heard of that? You could not get…”

“I wish to emphasize: We have a cost underrun in a Federal program. When have you ever heard of that? You could not get those lower prices and lower costs unless the prescription drug plans are being strong negotiators with the drug makers. States are also saving money in lower contributions, better known as ``clawback'' payments. State clawback payments are now projected to be $37 billion less over a 10-year period. That is 27 percent lower. Just in 2006, States saved $700 million. Why? Because private competition is working. The plans are negotiating lower prices for drugs. I have said so many times, for the top 25 drugs used by seniors, the Medicare prescription drug plans have been able to negotiate prices that on average are 35 percent lower than the average cash price at retail pharmacies--35 percent lower. Why? Because private competition is working. Here are some examples: Lipitor is 15 percent lower, Atenolol is 63 percent lower, while Fosamax is 30 percent lower. I could go on down the list. Now, when the drug benefit was signed into law, we believed it would work and hold down costs. That is certainly happening today even more than we expected because private competition works. We also said that if it did not work--if the negotiating model used for the drug benefit did not hold down costs--then Congress would need to reexamine things. If costs grew too fast, then the whole idea would have to be revisited. Maybe we would have to restrict access to drugs.”