[Congressional Record Volume 146, Number 19 (Monday, February 28, 2000)]
[Senate]
[Pages S838-S840]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    PRESCRIPTION DRUGS AFFORDABILITY

  Mr. JOHNSON. Mr. President, I come to the floor today to join my 
colleagues who have been talking over this past week or so about one of 
the most critical issues facing America today relative to health care, 
and that is the lack of affordability and lack of access to 
prescription drugs for all of our citizens, but particularly for 
seniors in America.
  As I go home across my State of South Dakota, one of the issues I 
hear the most about in every community I go to--large and small--is the 
cost of prescription drugs.
  Medicare was created by President Lyndon Johnson as one of the Great 
Society programs back in the 1960s. At that time, the great unmet 
health care need for American seniors was the cost of hospitalization. 
Medicare is not a perfect program, but it has gone a long way toward 
solving the enormous problem seniors faced at that time--the cost of 
hospitalization. But no prescription drug benefit was added back then, 
and medicine has changed radically over the course of the last 35 
years. There is a greater reliance on prescription drugs now. Drugs 
have become increasingly sophisticated. People are living longer. The 
quality of their lives have been enhanced by the availability--where 
they can afford it--of prescription drugs. But now the cost of 
prescription drugs is the highest expenditure and highest financial 
burden of all on seniors' health care needs next only to the cost of 
health insurance premiums themselves. Yet while there is a great deal 
of rhetoric around Washington, there has been too little action up 
until now on this profound issue.

  I wind up talking to a great many seniors in particular on this 
issue. In my home State of South Dakota where we have a lot of people 
who are former farmers, ranchers, small business people, and employees 
of small business who had no deluxe pension plan or health plan to fall 
back on, for a great many of them Social Security is their lion's share 
if not their total retirement benefit. Medicare is their key health 
care benefit.
  Thirty-five percent of seniors in America today have no Medigap 
coverage whatsoever. In South Dakota that rate would be even higher, 
and people wind up caught in a terrible predicament. It has put a 
tremendous financial burden on a great many people who very frequently 
have hundreds of dollars a month in prescription drug costs. But the 
problem is all the more challenging for the great many South Dakotans I 
talk to who have no Medigap policy, who cannot afford that, and then 
who wind up literally choosing between groceries and staying on their 
prescriptions. What happens then is all too often they either don't 
fill the prescription or they take half of the pills or they don't take 
the pill until they become ill again at which time again they show up 
at the emergency room with an acute illness. Then Medicare picks up the 
tab. Then the taxpayers pick up that cost at a much higher cost than 
would have been the instance if they had been able to stay on 
prescription drugs in the first place.
  We wind up with a growing problem, which is the inflationary rate for 
the cost of prescription drugs. They are going up far higher than the 
rate of inflation for the rest of the economy. People are on relatively 
fixed incomes. They are on Social Security and do not have the means 
oftentimes to pay for any of these bills at all, or pay for enough of 
them. All too often what little COLA--cost-of-living adjustment--comes 
along with Social Security is either consumed entirely by the Medicare 
premium increase or other cost-of-

[[Page S839]]

living increases before they even get to deal with the cost of 
prescription drugs.
  I was in a community in South Dakota not too long ago talking to some 
seniors at a senior center. This is a phenomenon I had never heard ever 
before, frankly, where they were telling me--these are some seniors who 
are a little better off than many of the people I talked to; they have 
a little more financial means--they were going to Texas and to Arizona 
to snowbird during the winter, but they are paying for the entire cost 
of their snowbird expense by going across the line to Mexico and buying 
their prescription drugs for less than half of what they were paying in 
the United States. The prescription drugs they are buying in foreign 
countries for half the price are the same branded FDA-approved drugs 
that people buy in the U.S.
  It is an outrage when you think about American citizens having to go 
to Canada, having to go to Mexico, and going other places to get their 
medication cheaper. It seems sometimes that nobody in the 
industrialized democratic world pays bills anything like our seniors 
pay or our citizens in general pay for prescription drugs because it 
isn't only seniors, although clearly seniors who comprise about 12 
percent of the United States population consume well over a third of 
the prescription drugs. That isn't surprising given the fact that as 
people grow older they run into health care problems that are more 
intense and that will require the attention of prescription drugs. But 
there has to be a remedy for this.

  I appreciate we are talking now about a Medicare benefit that would 
include prescription drugs. But, frankly, the bipartisan agreement 
isn't there yet. I am hopeful it will be during the course of this 
short legislative year.
  There are a lot of people out there who I think are cynical about how 
much Congress is going to accomplish this year given the fact it is a 
Presidential year, and all too often time is spent trying to paint 
differences, drawing lines and drawing the parties apart than coming 
together in a bipartisan kind of cooperation that I think the American 
public deserve and what they want to see happen. I think most Americans 
are not left- or right-wingers, but they want the Government to work 
fairly efficiently and come together on these key issues.
  This is one where I believe we can find some common ground on--not 
necessarily with huge public expenditures, although if we are going to 
have a Medicare benefit in the end some additional budgetary 
implications are certainly involved. And, yes, I think it can be 
addressed without some massive bureaucracy. We can do that as well, 
although I worry some when I see these ``Flo ads'' on TV paid by the 
pharmaceutical industry having to hire an actress to portray a senior 
by the name of Flo who then goes on about her worries that somehow the 
Government might do something about prescription drugs and that would 
be having the Government enter the medicine chest. This is a fear 
tactic. It is designed to make people worry that if Congress does 
anything about the cost of prescription drugs somehow that will involve 
some sort of intrusive federalization of our health care. That is a 
foolish argument and, unfortunately, one that is backed by millions of 
dollars of TV ads and one that I think is cynical in terms of trying to 
dissuade people from believing that there are steps we can take so the 
United States no longer is the only democracy in the world paying the 
kind of bills that we pay.
  I had a study done by one of our committees in the other body to look 
at the prescription drug costs in South Dakota, and to also look at 
costs around the world. This is no surprise. I have long heard talk 
about going to Winnipeg and going to Mexico to buy drugs for less. I 
thought perhaps that was anecdotal, and that perhaps it was a systemic 
situation, but in fact it is reality.
  The recent studies indicate that if you go to Canada, or to Mexico, 
or to France, or to Britain, or to Germany, or to Italy, or to 
virtually any other industrialized democracy, the cost of prescription 
drugs is about half what it is in the United States. Nobody pays the 
kind of bills we pay in the United States. We pay about double what 
anybody else in the industrialized world pays. That to me is so utterly 
unacceptable and unfair. This all comes at a time of great national 
prosperity overall--though you wouldn't always know that in rural 
America. The great pharmaceutical industry is making profits running 
about three times higher than any other sector of the American economy. 
They are enormous profits. Of course, we always hear pleas that if we 
had to develop drugs at a reasonable price, as everything else in the 
world, that would negatively impact our ability to do research. It is 
nonsense. The profits being earned are far higher than a research 
budget. We want the pharmaceutical industry to make a reasonable 
profit. We want them to invest money in research. But they make money 
off research. That is what gives them new things to sell.
  I don't think that some reduced cost for American citizens in line 
with what everyone else in the world is paying is going to have some 
sort of catastrophic consequence with the pharmaceutical industry at 
all. All we are looking at is a fair deal, one more consistent with 
what everybody else gets.
  There are a couple of ways to approach this. Keeping in mind that if 
we do nothing not only is the current severe problem going to grow even 
worse, it is going to grow worse because the inflationary numbers for 
prescription drugs are increasingly going up far higher than the rate 
of inflation.
  There are a couple of different responses that I think we could take 
in this that do not require us to wait around until we reach some sort 
of grand, bipartisan compromise under the entire revamping of Medicare. 
Something is going to have to be done long term about Medicare. We all 
know that. I am not sure if this is the year it is likely to happen as 
we get into sort of a Presidential-politics-strewn year and it doesn't 
even happen. We don't have to wait until then to do something.
  I sponsored, with my colleague Senator Kennedy, S. 731, the 
Prescription Drug Fairness For Seniors Act. There is a corresponding 
bill in the House of Representatives, H.R. 664, with over 140 
cosponsors.

  This legislation simply says to the pharmaceutical industry that we 
will not set prices, we will not have a bureaucracy sitting in the 
basement of a building in Washington trying to figure out a fair 
profit. Some suggest that is what we ought to do. We have done that 
with utilities. Many States have public utility commissions. 
Recognizing there is no competition in certain sectors of America's 
economies, they set what a fair profit is and what the prices and 
profit will be. That is not where I am going with this legislation 
despite the fact many other countries do.
  This legislation is consistent with free market. It is 
nonbureaucratic. It simply says to the pharmaceutical industry, if this 
industry is going to sell their products to other favored buyers, then 
cut Medicare beneficiaries, seniors and the disabled on Medicare, in on 
the deal, too. Right now a large HMO or Federal agency, is buying 
prescription drugs at 40 percent to 50 percent less than what everybody 
else in the U.S. is paying.
  This proposal does not provide free drugs for anyone, but it does put 
American seniors and those disabled individuals on Medicare, who are 
the ones that purchase the majority of prescription drugs in this 
country, on the same playing field as citizens of other nations, who 
pay less. When the pharmaceutical industry sells their products to 
favored customers such as large HMOs, Federal agencies, or other 
countries for that matter, they are not selling the drugs at a loss. 
They are making a very handsome profit. We are suggesting if that is 
enough profit for the industry from those customers, why not the same 
for American citizens? Why not give the same price system to American 
citizens?
  Perhaps their negotiated price will go up; it cannot go higher than 
what it already is for American citizens. We are suggesting, do not 
discriminate against American citizens, and certainly not against 
American seniors. This legislation involves no price fixing, it 
involves no bureaucracy, it involves no tax dollars.
  I am pleased in my home State of South Dakota, we now have over 5,000 
citizens who have written to me asking to be named as ``Citizen 
Cosponsors''

[[Page S840]]

my legislation, S. 731, the Prescription Drug Fairness for Seniors Act. 
I invite other people and my fellow colleagues who believe we need to 
do something about this issue now, who believe there should be no 
discrimination against American seniors, to join me as a Citizen 
Cosponsor. Contact me at my office in Washington. I am happy to sign 
citizens and my colleagues on. We will indicate to the world this is 
not an issue that will go away. It is an issue that has enormous grass 
roots support and one that we can do something now about to help with 
the skyrocketing cost of prescription drugs.
  We have a second bill, as well, that Senator Dorgan, my colleague 
from North Dakota, has been the principal sponsor of that takes a 
somewhat similar tact--again, involving no bureaucracy, no tax dollars. 
I call it ``what is good for the goose is good for the gander'' 
legislation, but the formal name of the bill is the International 
Prescription Drug Parity Act, S. 1191.
  This legislation says if companies sell these drugs to Canada, 
Mexico, or elsewhere, allow our pharmacies to reimport these drugs back 
into the United States. Currently, a citizen can go to these other 
countries and pick up about a month's supply of drugs for their own 
personal use, but that is it.
  We would monitor the drugs to make sure they are not tampered with; 
that is not an insurmountable problem.
  In effect, every other country in the Western World seems to have 
found a way to address this issue, except the U.S. The world's greatest 
democracy, the world's greatest economic and military power, is the 
only country that seems not to have found something to address these 
costs. We say let the drugs be imported back into the United States. We 
will ride piggyback on the progressive policies of other countries 
where the drugs have been sold for profit, but are branded FDA-approved 
drugs; bring them back into the United States. Why should South 
Dakotans have to get on a bus and go to Winnipeg? Why should they have 
to take a side trip during the wintertime to Mexico? Why should any of 
this be necessary? This is foolishness. We deserve far better.

  There are some who say this is common sense; why is there any 
controversy? The resistance to some of this legislation has been 
fierce. The pharmaceutical industry has been running attack ads against 
my colleagues in the other body who have sponsored this legislation. 
Television ads, radio ads, and print ads can be intimidating. I am 
hopeful we can sit down at the table together.
  I don't want to demonize or villainize the pharmaceutical industry. 
We are proud of the research and development that they do. We want them 
to continue doing that. We want them to continue to make a profit. This 
is not some sort of confiscatory plan. We want them to sit down in good 
faith. If not, we will proceed anyway. This issue has become too 
serious. It has to do with the health care integrity of our Nation.
  I believe we can make progress with these two middle-of-the-road kind 
of bills, while at the same time working with the President who, to his 
great credit, has been talking about ways we can add Medicare 
prescription drug coverage to our health care system in this country. 
If we do that, we will have resolved one of the most severe problems 
our country faces this year.
  We need to go on to broader range Medicare reforms. There are things 
that will have to happen with Social Security, as well. We all know 
that and hopefully we can reach some bipartisan resolution of those 
issues. In the meantime, every single day that goes by, there are South 
Dakota seniors and disabled individuals with high prescription drug 
bills, seniors from all over the country, who are skipping meals, who 
are not taking the drugs they should be taking, who are making terrible 
choices that the citizens of the world's richest democracy should not 
be compelled to make. It is just unconscionable that people are given 
these choices. We should not have to make those decisions. We should 
not have people showing up with acute illnesses in our emergency room 
where taxpayers then pick up the tab because they were not able to 
afford the prescription drugs they need.
  There are a great many core issues we need to debate this year, from 
world trade issues to the scope and the nature of the Federal budget, 
to education and so on. However, I submit that among the very top tier 
of issues we need to resolve before this Congress goes home this fall, 
before it returns to more politics and campaigning, is to take up these 
two bills and to pass needed legislation to address the issue of 
prescription drug affordability.
  I have no ego involved in the sponsorship here. We need to deal 
constructively now, this year, with the cost of prescription drugs, 
certainly for seniors, and hopefully for the entire American public. If 
we do that, this will have been a year well spent.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BOND. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kyl). Without objection, it is so ordered.

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