[Congressional Record Volume 145, Number 130 (Thursday, September 30, 1999)]
[House]
[Pages H9176-H9177]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   AFFORDABLE PRESCRIPTION DRUGS ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio (Mr. Brown) is recognized for 5 minutes.
  Mr. BROWN of Ohio. Mr. Speaker, before I begin my special order on 
prescription drugs, I yield to the gentleman from New Jersey (Mr. Holt) 
if he would like to finish his thought.
  Mr. HOLT. Mr. Speaker, I thank my friend and just say that the point 
I wanted to make was that economists argue about what is the yield on 
research, the economic yield on dollars spent on research, but they 
argue about whether it is 20 percent or 30 percent, not whether it is 2 
or 3 percent. And it is a sound investment.
  Mr. BROWN of Ohio. Reclaiming my time, Mr. Speaker, 2 weeks ago the 
Office of Personnel Management announced that premiums for the Federal 
Employees Health Benefit Plan would increase by 9 percent next year, 
the third straight year of large increases. Last month, final figures 
were in for the number of seniors that will be dropped from their 
Medicare managed care plan come January 1: 395,000 elderly Americans. 
Last year, 400,000 were dropped. Most of the remaining plans are 
curtailing or eliminating prescription drug benefits.
  Those are the numbers. Here are the stories. Last month, I received a 
letter from a 71-year-old widow in Sheffield Lake, Ohio, who had taken 
a part-time job to help pay for her prescription drugs. Until United 
Health Care pulled out of her county and left her without a health 
plan, she had some drug coverage, but just one of her medications, 
lipitor, absorbed the entire benefit.
  I spoke with a woman recently in Elyria, Ohio, who spends $350 out of 
her $808 monthly Social Security check on prescription drugs.
  What is the common thread here? The high cost of prescription drugs. 
Prescription drug spending in the U.S. increased 84 percent between 
1993 and 1998. The American public is right to wonder why we are not 
doing something about that in this Congress. The truth is, what has 
held us back is a threat. The drug industry says if we do not leave 
drug prices alone, they will not produce any new drugs.
  I believe it is time we use market forces, and by that I mean good 
old-fashioned competition, to challenge that threat. We can introduce 
more competition in the prescription drug market and still foster 
medical innovation.
  We need information to examine the industry's claims that U.S. prices 
are

[[Page H9177]]

where they need to be. I introduced last week a bill, the Affordable 
Prescription Drug Act, that addresses these issues head on. Drawing 
from intellectual property laws already in place in the United States 
for other products in which access is an issue, such as pollution 
control devices under the Clean Air Act, my bill would establish 
product licensing for prescription drugs.
  If, based on criteria by the Department of Commerce, a drug price is 
so outrageously high that it bears no resemblance to pricing norms for 
other industries, the Federal Government could require drug companies 
to license their patent to generic drug companies. The generic 
companies could sell competing products before the brand name patent 
expires, paying the patent holder royalties for that right. The patent 
holder would still be amply rewarded for being first in the market, and 
Americans would benefit from competitively driven prices. Drug prices 
would then come down.
  The bill would require drug companies to provide audited, detailed 
information on drug company expenses. And given that these companies 
are asking us to accept the status quo, in terms of high drug prices, 
the status quo that has bankrupted seniors and ignited health care 
inflation, they have kept us guessing about their true cost for all too 
long.
  This is not some brand new untried proposal. Product licensing works 
in England. It works in France. It works in Israel. It works in 
Germany; it has worked in Canada. But there is another part of this 
issue. Through the National Institutes of Health, American taxpayers 
finance 42 percent of the research and development that generates new 
drugs. Private foundations, State and local governments, and other 
nonindustry sources kick in another 11 percent. So the drug industry 
funds less than half of the research and development of new drugs.
  In addition, the dollars that the drug companies do spend on 
research, the U.S. Congress has bestowed generous tax breaks on those 
dollars for the drug companies. At the same time, drug prices in the 
United States are twice or three times or four times what they are in 
every other country in the world.
  So get this. Half the cost of prescription drug research and 
development is borne by U.S. taxpayers. U.S. taxpayers then give tax 
breaks for the money that they do spend for the research on 
prescription drugs by the drug companies. And American taxpayers are 
then rewarded by the drug companies by being charged the highest prices 
in the world, double, triple, four times what those prices are.
  Mr. Speaker, it is time this Congress pass the Affordable 
Prescription Drug Act.

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