[Congressional Record Volume 145, Number 73 (Wednesday, May 19, 1999)]
[House]
[Pages H3372-H3373]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    PRESCRIPTION DRUG PRICING IN THE 7TH CONGRESSIONAL DISTRICT OF 
   MARYLAND: DRUG COMPANIES PROFIT AT THE EXPENSE OF OLDER AMERICANS

  The SPEAKER pro tempore (Mr. Sessions). Under a previous order of the 
House, the gentleman from Maryland (Mr. Cummings) is recognized for 5 
minutes.
  Mr. CUMMINGS. Mr. Speaker, food and medicine are very, very important 
to people. Sadly, in Baltimore City and Baltimore County and all over 
this Nation, it has become increasingly clear that after a lifetime of 
service to family and community, too many seniors are faced with the 
cruel and difficult choice between paying for the miracle drugs which 
sustain life and buying food.
  The findings of the Committee on Government Reform minority staff 
study of my district, the 7th Congressional District of Maryland, 
demonstrates that in Baltimore a senior citizen paying for his or her 
own prescription drugs must pay on the average more than twice as much 
for the drugs as the drug companies' favored customers.
  For the five drugs investigated in this study, the average price 
differential was 133 percent. The drug with the highest price 
differential was Synthroid, a commonly used hormone treatment 
manufactured by Knoll Pharmaceuticals. For this drug, the price 
differential for senior citizens in Maryland was an incredible 1,641 
percent. An equivalent dose of this drug would cost the manufacturers' 
favored customers $1.75. An uninsured senior citizen in Baltimore must 
pay over $30.
  Now, because large preferred customers of the drug companies 
typically buy in bulk, some difference between retail prices and 
favored customer prices would be expected. But the study found there is 
an unusually large price differential being enforced for prescription 
drugs, over six times greater than the average price differential for 
other consumer goods typically purchased by senior citizens.
  Moreover, it appears to be pharmaceutical manufacturers, not our 
local drug stores, which are responsible for the far higher prices. 
Local pharmacies appear to have relatively small markups between the 
prices at which they buy prescription drugs and the prices at which 
they sell them. Retail prices are just 5 percent above manufacturers 
suggested price to pharmacies.
  It appears that the drug companies are engaged in a form of 
discriminatory pricing that victimizes those who are least able to 
afford it. Large corporate governmental and institutional

[[Page H3373]]

customers with market power are able to buy their drugs at discounted 
prices. Drug companies then raise prices for sales to seniors and 
others who pay for drugs themselves to compensate for these discounts 
to the favored customers.
  By engaging in these cost-switching price practices, drug 
manufacturers are earning enormous profits, while seniors must choose 
between food and medicine. America's top 10 drug manufacturers are 
expected to reap approximately $20 billion in profits in 1999 alone.
  Reducing the cost of prescription drugs for seniors and other 
uninsured individuals is a moral imperative. Until we can achieve 
expanded Medicare coverage, the Federal Government should not be doing 
business with drug manufacturers which discriminate against uninsured 
senior citizens and others in their pricing.
  That is why I commend and join the gentleman from Arkansas (Mr. 
Allen) and another 100 of the Members in Congress in cosponsoring the 
Prescription Drug Fairness for Seniors Act.
  This legislation would not enact price controls, but the government 
would cease buying drugs from companies which engage in cost-switching. 
It would require drug manufacturers to sell to pharmacies the drugs 
needed by Medicare patients at the lowest price paid by any government 
agency or other preferred customer.
  This bill would assert the Federal Government's purchasing power to 
encourage the compassionate and evenhanded pricing of live-saving 
prescription drugs. The bill would allow pharmacies to benefit from the 
government's purchasing power, effectively reducing the price that they 
pay for the drugs they dispense to Medicare beneficiaries. Based upon 
our analysis of Baltimore's prices and those applicable in other areas, 
I believe that pharmacies would pass most of these savings on to 
Medicare patients in the form of lower prices.
  Today drug companies are utilizing market forces against the interest 
of senior citizens in a way which is unfair and contrary to our 
national interests. We can make the market follow morality. Never again 
should any senior citizen be forced to choose between food and 
medicine. I urge my colleagues to support the Prescription Drug 
Fairness for Seniors Act.

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