[Congressional Record Volume 144, Number 143 (Sunday, October 11, 1998)]
[Extensions of Remarks]
[Pages E2059-E2060]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       PRESCRIPTION DRUG PRICING

                                 ______
                                 

                           HON. MARION BERRY

                              of arkansas

                    in the house of representatives

                        Friday, October 9, 1998

  Mr. BERRY. Mr. Speaker, I rise today to announce the formation of the 
Prescription Drug Task Force.
  I have enjoyed working with Representatives Allen and Turner to form 
the task force.
  The task force will work to bring attention to issues involving the 
costs and availability of prescription drugs.
  The task force will serve as a clearinghouse for information on these 
issues and will host educational forums, briefings, and hearings.
  One of the things we will focus on is continuing to hold forums like 
the one we hosted last week, where members will be given an opportunity 
to participate in discussions and learn how consumers are being 
affected by the pricing decisions of pharmaceutical companies.
  One thing I would like to talk about tonight is how the most 
profitable industry in existence (that is legal) and why that 
industry's practice of making excessive profits from the elderly and 
uninsured Americans is bad news.
  According to industry ratings of Fortune 500 companies--
pharmaceutical companies are the most profitable businesses in 
existence. They made $24.5 billion in profits last year. Pharmaceutical 
companies had a 17.2 percent return on revenues. That compares to 
telecommunication companies who had an 8.1 percent, computers and 
office equipment manufacturers who had 7.3 percent, food and drug 
stores that made 1.7 percent.
  One might think the successful pharmaceutical companies would be of 
tremendous benefit to American consumers. This couldn't be more wrong.
  And unfortunately, while the pharmaceutical companies are making 
tremendous profits, the American people are being gouged. Thousands of 
consumers, especially seniors, have found themselves affected by the 
price of prescription drugs in this country.
  Studies that have been conducted by the minority staff of the 
Government Reform and Oversight Committee for several Members of 
Congress, including myself, over the last several months. These studies 
have shown the prices seniors and other consumers are

[[Page E2060]]

charged are significantly higher than what pharmaceutical companies 
charge their favored customers such as HMOs, insurance companies and 
the Federal Government.
  Because of this price gouging, seniors across the country are 
gathering their friends and traveling to other countries such as Mexico 
and Canada to purchase prescription drugs because to buy them in our 
own country, is just too expensive. Why not go somewhere else when you 
can pay a lower price somewhere else?
  Here's the reality--prescription drug prices are higher in the United 
States than they are in neighboring countries. According to the General 
Accounting Office (GAO), prescription drugs in the U.S. were priced 
about 34 percent higher than the same products in Canada.
  The average price for products sold in the U.S. was $45.17, ranging 
from $2.35 (for Deltasone, 5 mg. tablets) to $304.32 (for PCE, 333 mg. 
tablets). The average price for the same products sold in Canada was 
$33.78, ranging from $1.29 (for Deltasone) to $211.98 (for PCE). The 
comparisons were based on data collected from both countries for 121 
prescription drugs in the same quantities for each product.
  Also, the group Public Citizen conducted a study of eight newly 
developed antidepressant and antipsychotic medications. They found that 
the prices for each of these eight drugs were higher in the U.S. than 
they were in 17 other European and North American countries. That's 
every country looked at in the study.
  The study showed that on average, American prices were twice as high 
as other countries', and for individual comparisons with other 
countries, the American price was as much as six times higher.
  The consequences are that many individuals who need these new drugs, 
for financial reasons, are not getting the treatment they need.
  GAO says the reason for this differential in the drug prices in the 
two countries is because Canadian law controls prices of both new drugs 
entering its market and any increases in prices of pharmaceuticals 
already on the market.
  If the manufacturers see profits in countries with price controls 
and/or government purchasing plans, why do they charge higher prices 
elsewhere?
  When consumers in one area cannot buy in another, the seller may be 
able to increase its profits by engaging in what economists call price 
discrimination. That is what is going on in our country, pure and 
simple, price discrimination. And what this price discrimination 
amounts to is our seniors are being ripped off.
  Mr. Speaker, if someone were going around stealing from seniors in 
your town or city, stealing right out of their homes and their pockets, 
people would be outraged. The police would be called and those thieves 
would be arrested. Then why are we allowing the pharmaceutical 
companies to rob our seniors? Isn't price discrimination the same 
thing?
  We try to allow people to live longer, but then when a doctor 
prescribes a drug, the senior can't take it because they can't afford 
it.
  We live in the richest country in the world but we allow people to 
starve, go without heat, and only take half of their medicine because 
they can't afford to take the prescribed amount. It is also wrong that 
seniors have to travel hundreds of miles for medication, they need, 
often just to stay alive.

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