[Congressional Record Volume 144, Number 133 (Tuesday, September 29, 1998)]
[House]
[Pages H9182-H9183]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       PRESCRIPTION DRUG PRICING

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California (Mrs. Capps) is recognized for 5 minutes.
  Mrs. CAPPS. Mr. Speaker, I rise today to bring the attention of the 
House to a veritable scandal occurring in our country today. Seniors on 
the central coast of California and throughout the country are paying 
outrageously high prices for their prescription drugs. Even worse, 
these inflated prices subsidize the discounts that high-profit HMOs get 
for the very same drugs.
  Yesterday I released a report on the cost of prescription drugs for 
seniors in my district and, more importantly, a major reason that these 
costs are so high. The findings are startling.
  Seniors in my district pay on average 133 percent more for the 10 
most widely prescribed drugs than do HMOs buying the same drugs. These 
are drugs like Zocor for reducing cholesterol, Norvasc for reducing 
blood pressure, and Relafen for relief from arthritis, common 
prescription drugs.
  Prescription drug companies give huge discounts to managed care 
companies for these and other drugs. Other buyers, like pharmacists, 
pay substantially more for the same drugs and must pass these higher 
costs on to seniors.
  For example, my study found that Ticlid, one of the most widely 
prescribed medications for persons who have had strokes, sells to an 
HMO for around $34 for 60 tablets. Yet in my district the average price 
for seniors who have to pay for this drug themselves is more than $130, 
nearly a 300 percent markup over the price the HMO pays.
  The huge difference in prices is not going to the retail pharmacist 
in Santa Barbara or Santa Maria or Arroyo

[[Page H9183]]

Grande. On average the local pharmacists on the central coast are 
themselves paying $100 to $110 for Ticlid. The final price seniors pay 
includes only a reasonable markup to the outrageous price pharmacists 
are forced to pay to the drug companies.

                              {time}  1015

  No, the extra money that seniors pay goes to the drug company so that 
it can continue to give big discounts to the HMOs and managed care 
companies.
  That seniors should be paying more money for drugs than they should, 
while HMOs reap huge profits, is a very sad story. And these are 
profits that are based partly on the huge discounts that they get from 
the drug companies. But there is even a sadder element. Many seniors 
simply cannot afford these high prices and so instead, because of their 
fixed incomes, they take half the prescribed dosage or they just do not 
buy these life-saving drugs because they cost too much.
  For example, Clyde Vann, of Pismo Beach, told my staff that he pays 
over $300 per month for seven prescription drugs on his fixed income, 
and he is not even taking two others because he cannot afford the extra 
$150 a month. Harriet MacGregor of Santa Barbara told my staff that 
because of the high cost of her five prescriptions she must sometimes 
skip or reduce her dosage.
  Mr. Speaker, this is intolerable. Senior citizens should not be 
subsidizing the big profits of HMOs, and they should not have to choose 
between filling their prescriptions or buying food or paying rent.
  Last week I was proud to be an original cosponsor of legislation to 
address this issue. H.R. 4646 was introduced by my good friend and 
colleague, the gentleman from Texas (Mr. Jim Turner), who is here today 
and will be also speaking to this topic. This bill will allow 
pharmacists the opportunity to receive the same big discounts that HMOs 
get for drugs that they dispense to seniors.
  This legislation is long overdue and will ensure that seniors pay 
reasonable prices for the life-saving medications that they so 
desperately need, and I urge my colleagues on both sides of the aisle 
to support this legislation.
  Mr. Speaker, I submit for the Record a document providing information 
on cost differentials on prescription drugs.

                                          APPENDIX A.--INFORMATION ON PRESCRIPTION DRUGS ANALYZED IN THIS STUDY
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                                                                                                             Prices (Dollars)
                                                                                               --------------------------------------------     Price
                Brand name drug                      Dosage and form           Indication                    Major                Average   differential
                                                                                                   FSS       whole-      AWP       retail     (percent)
                                                                                                             saler                 price
--------------------------------------------------------------------------------------------------------------------------------------------------------
Ticlid.........................................  250 mg, 60 tablets....  Stroke...............     $33.57     $99.44    $108.90    $131.24          291
Zocor..........................................  5 mg, 60 tablets......  Cholesterol reducer..      42.95      85.47     106.84     112.55          161
Prilosec.......................................  20 mg, 30 cap.........  Ulcer................      58.38      99.20     108.90     131.47          125
Norvasc........................................  5 mg, 90 tablets......  Blood Pressure.......      58.83      97.92     125.66     128.78          119
Fosamax........................................  10 mg, 30 tablets.....  Osteoporosis.........      31.86      50.91      51.88      69.22          117
Procardia XL...................................  30 mg, 100 tab........  Heart................      67.35     105.05     131.31     143.75          113
Relafen........................................  500 mg, 100 tab.......  Arthritis............      62.58      88.88     111.10     132.78          112
Vasotec........................................  10 mg, 100 tab........  Blood Pressure.......      56.08      85.56     102.94     116.28          107
Cardizem CD....................................  240 mg, 90 tablets....  Angina...............      99.36     154.10     165.42     199.04          100
Zoloft.........................................  50 mg, 100 tab........  Depression...........     123.88     172.44     215.55     232.50           88
                                                                                                                                           -------------
    Average price differential.................  ......................  .....................  .........  .........  .........  .........          133
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