[Congressional Record Volume 144, Number 136 (Friday, October 2, 1998)]
[Extensions of Remarks]
[Pages E1893-E1894]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  THE HIGH COST OF PRESCRIPTION DRUGS

                                 ______
                                 

                               speech of

                         HON. JAMES H. MALONEY

                             of connecticut

                    in the house of representatives

                       Thursday, October 1, 1998

  Mr. MALONEY of Connecticut. Mr. Speaker, a number of studies have 
concluded that many older Americans pay high prices for their 
prescription drugs. Senior citizens across the country are becoming 
increasingly concerned about their ability to afford medications that 
are necessary to maintaining good health. It has even been reported 
that more than one in eight older Americans has been forced to choose 
between buying food and buying medicine.
  At the request of my colleague, Rep. Jim Turner, the Minority staff 
of the House Government Reform and Oversight Committee conducted 
several studies to determine why older Americans pay high prices for 
prescription drugs. Their findings are disturbing:
  They uncovered a ``discriminatory pricing'' scheme whereby senior 
citizens pay, on average, over twice as much for prescription drugs as 
the drug manufacturers' most favored customers--such as large insurance 
companies, hospital chains and the Federal government. Specifically, 
corporate and institutional customers with market power are able to buy 
their drugs at discounted prices--however, prices are raised for sales 
to seniors and others who pay for needed prescriptions themselves in 
order to compensate for the discounts offered to favored customers.
  The average price differential among the 10 drugs studied between 
what seniors pay and what favored customers pay is five times what it 
is for other consumer products.
  This practice allows the drug industry to amass large profits at the 
expense of those who are least able to afford it--older Americans. 
Although the elderly have the greatest need for prescription drugs, 
they often have the most inadequate insurance coverage for the cost of 
these drugs. Medicare does not cover the cost of most prescription 
drugs, and

[[Page E1894]]

supplemental ``Medigap'' policies are often prohibitively expensive or 
limited in their coverage. Furthermore, a 1996 AARP survey indicated 
that 37% of older Americans do not have insurance coverage for 
prescription drugs. As a result, many senior citizens--a large portion 
of whom live on a fixed income--are forced to pay the full, out-of-
pocket expense of prescription drugs.
  The problem is clear: drug manufacturers are selling drugs to their 
favored customers at drastically reduced prices while not passing along 
those same savings to retail pharmacies and senior citizens. HR 4646, 
the ``Prescription Drug Fairness Act'', addresses this problem by 
giving every Medicare-eligible person a prescription drug card that 
they can take to their pharmacy and use to purchase prescription drugs 
at the same prices enjoyed by the drug manufacturers' favored 
customers.
  The bill accomplishes this by allowing local pharmacies to purchase 
drugs used by senior citizens from the General Services Administration 
(GSA) of the Federal government. Since the GSA is one of the entities 
able to purchase prescription medication at much lower prices, 
pharmacists will be able to pass on significant savings to our senior 
citizens.
  This is smart legislation that will save Medicare dollars by allowing 
seniors to get the medications they need to stay healthy. But more 
importantly, this is an effective approach to the problem of 
discriminatory pricing that will improve the quality of life for our 
senior citizens. I believe this bill will save lives and promote the 
personal financial stability of older Americans.
  I strongly urge my colleagues to support H.R. 4646.

                          ____________________