[Congressional Record Volume 146, Number 46 (Wednesday, April 12, 2000)]
[House]
[Pages H2195-H2200]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WHAT CAN BE DONE TODAY TO CHANGE THE CURRENT CLIMATE AS FAR AS
PRESCRIPTION DRUGS FOR SENIORS IN THIS COUNTRY
The SPEAKER pro tempore (Mr. Reynolds). Under the Speaker's announced
policy of January 6, 1999, the gentleman from Oklahoma (Mr. Coburn) is
recognized for 60 minutes as the designee of the majority leader.
Mr. COBURN. Mr. Speaker, I wanted to address the American public and
Members of the House tonight. I find myself in a minority in
Washington, both among the Republicans and the Democrats. I am a
practicing physician that normally practices and sees patients on
Mondays and Fridays when I am not in Washington, and I see before us a
situation much like a patient who would come to me with a fever, chills
and night sweats, and the treatment we are about to give to that
patient is to tell them to take an aspirin and cover up in a blanket
and go home and they will get better, when the underlying problem is
that they have pneumonia. Without totally diagnosing their disease,
what I have done is committed inappropriate care and have actually
harmed the patient.
If one is a senior citizen tonight, I want them to listen very
carefully to what I am going to explain to them about Medicare, and the
tack that I am going to take is not necessarily going to be appreciated
by most of the Members of this body.
I also happen to be a term-limited Member of Congress. I am not
running for reelection, and I want to say that in my heart, knowing how
severe the problems are for my patients with prescription drugs, the
worst thing we can do for seniors is to add a costly prescription
benefit drug to the Medicare program.
I am going to spend the next hour outlining why that is the case and
why it ignores what the real problems are in the drug industry and the
physician practices that now many of our seniors find themselves
involved with.
I also want everyone to know that Medicare has been abused by the
Members of this body, the other body and previous Presidents, because
most workers in this country, as a matter of fact all workers in this
country except if they are a Federal employee, are paying 1.45 cents
out of every dollar they earn, no matter how much money they earn, into
the Medicare part A trust fund.
As they pay that 1.45 cents, so does their employer. So that is
almost 3 cents out of every dollar that is earned by every employee is
paid into the Medicare part A trust fund.
The Congress, with the consent of the Presidents over the last 20
years, have stolen $166 billion of that money. What they have done is
they have put an IOU in there and said we will pay this back some day
in the future, but they took that money and spent it on other programs.
They did not say we need to raise taxes to do this good program. They
did not say we are going to take the Medicare money and spend it on
this program. They just very quietly took $166 billion out of that
trust fund for a hospital trust fund and spent it on other programs.
Now that is not a partisan statement. That is Republicans and
Democrats alike.
So we now find that as of 2 weeks ago, that trust fund is going to be
totally bankrupt by the year 2015.
Now we had some good news this last week. That has advanced to 2023;
that is, if we do not do anything with Medicare.
We know that at least 17 cents out of every dollar that is paid out
for Medicare is inappropriate. Where is the reform for Medicare? Where
is the fix to the very program that is supposed to be supplying the
needs of our seniors?
I see every day that I am in practice seniors who have a difficult
time accomplishing what I want them to do as far as their drugs. I see
seniors, and we have had described tonight, that have to make a choice
between whether they are going to eat a meal or take a medicine. That
is not all because there is not a prescription drug benefit because of
Medicare, and what I want to outline is some of the deeper problems
that are
[[Page H2196]]
associated with the pricing of drugs in this country, the
overprescribing of drugs in this country, the lack of review of drugs
that seniors are taking in this country, and what we can do about it to
fix it before we ever start adding another program.
The reason that that is important, because if we add another benefit
now the people who are going to pay for that is our grandchildren. It
is not going to be 3 cents out of every dollar. It is going to be 9
cents out of every dollar, and what is really being said is the
grandchildren's standard of living, if we establish a Medicare drug
benefit, because that is who is going to pay for it because it is going
to start in the year 2023 and there is going to be a significant price
to pay, and that price is going to be manifested in the fact that their
standard of living is going to be far less. They will not buy a new
home because they are going to be paying 6 percent additional out of
their income for a Medicare program.
What can we do today to change the current climate as far as
prescription drugs in this country? I say there is a lot we can do. The
first thing we can do is we can ask the President to instruct the FDA
to get on the ball as far as generic drugs. The gentlewoman from
Michigan mentioned that she had somebody write in and say she was
taking Premarin. For 5 years there has been an application pending for
an identical drug to Premarin that the vast majority of women over 50
years of age in this country are taking that will sell for one-sixth
the cost that Premarin presently sells for.
Premarin sells for, a month, about $30 average in this country. The
same drug made in the same plant in Europe, not Canada and Mexico
because they have price controls, in Europe sells for $6.95. How is it
that we are subsidizing the drug consumption of the rest of the world?
There is something wrong with the market.
So it is not a nonconservative position to ask that competition be
restored. The first thing we do is we get the FDA to approve more
generic drugs.
I might also note that there was a recent release March 16 on four
drug companies where the FTC found that two drug companies had paid two
other drug companies to delay the release of their generics. In other
words, they fixed prices. What that says to us is the Justice
Department in this country ought to have an aggressive policy that is
going to attack anticompetitive practices in the drug industry. If we
do not fix that and we create a Medicare drug benefit, what we are
going to do is waste money in Medicare, besides supplying the need for
our seniors which is very real. I do not deny that.
If we do not fix that underlying pneumonia in this program and in the
drug industry, all we are going to do is pay more money for it.
Those companies, and this can be found on the FTC Web site as of
March 16, 2000, if anyone is interested in knowing, clear evidence that
there is price fixing that is ongoing in the drug industry today; clear
evidence that the Justice Department is not doing its job to make sure
that there is competition among the drug industry.
The other thing that is important is 2 years ago, which I voted
against and very few of us did, this Congress and this President passed
FDA reform which allowed prescription drug companies to advertise
prescription-only medicines on television. This year they will spend
$1.9 billion on television advertising for medicines that can only be
gotten if a doctor writes a prescription for someone.
{time} 1930
Who is paying for that? We are paying for it. It is not necessarily
more effective for the patient. It does not necessarily make us
healthier. It just creates a brand name under which that drug company
can sell more of a particular brand of drug without necessarily inuring
any health benefit to us as a Nation. We ought to reverse that.
There is no reason to advertise prescription drugs on television.
That is $1.9 billion that would drop out of the price of drugs
tomorrow. That is expected to go to $5 billion next year. So we can
take $5 billion next year out of the cost of drugs.
This year, the average wholesale price of existing drugs in this
country rose 12 percent. That is the year 1999. Not new drugs, drugs
that were already out there. The costs associated to those drug
companies for those was 1.8 percent. So they had a six-fold increase in
price for existing drugs with a 1.8 percent increase in price.
That to me tells us that there is no competition in the drug
industry. When the average cost of living was less, the increases all
across the board were 3 percent, and prescription drugs, not new drugs,
not new benefits, not things that were breakthroughs, increased four
times the rate of inflation, we have to ask the question, what is going
on in the drug industry?
Do not get me wrong. I believe in the free enterprise system. I
believe in competition. I believe competition allocates scarce
resources very effectively. But we do not have competition in the drug
industry today.
A third thing that can happen is we ought to put a freeze, no
additional mergers in the drug industry until there is a blue ribbon
panel that says there is, in fact, competition to make sure that there
is true competition.
A drug was recently introduced that competes with a drug that is on
TV, everybody knows it as the purple pill. It is called Prilosec. A new
drug, does the same thing slightly different, one would think they
would want to get market share. One would think they would want to
introduce that new drug at a price lower so that people might switch to
that one to use it. Guess what the average wholesale price? Exactly the
same as Prilosec. Why is that? Because there is no competition in the
drug industry.
Now, the statements I am making on the floor tonight will be met with
hard-ball politics tomorrow by the drug industry, my colleagues can bet
it. But unless America wakes up and does not go to sleep saying the
problem to solve drugs for our seniors is to create a new program on a
bankrupt program and charge it to our grandchildren, we will never
solve the problems. The problems are severe.
There is another thing that could happen tomorrow that would help
almost every person that has been mentioned in the hour before I
started speaking. Almost every drug company in this country has an
indigent drug program. They will give drugs free to indigent seniors,
but it takes a little work. The doctor has to fill out something. It
has to be mailed to the drug company. They will mail them a 30-day
supply. One has to keep doing it if one wants them to keep getting it.
The drug companies are willing to do that, but the physicians in this
country, because they are already overworked because of the
overburdened system of managed care, do not really have the time to
take advantage of that.
So here we have a benefit that would lower the cost, would make
available drugs to many of our seniors, but it is not being utilized
because of the mandated system and lack of competition and the lack of
freedom associated with the health care system that we have.
There is still another thing that we could do, and this one my
physician friends are not going to like. But we heard comments that a
senior was on 17 medicines. Well, I will tell my colleagues any person
in this country on 17 medicines is not feeling well. One of the reasons
they are not feeling well is the medicines are making them not feel
well.
Most good doctors were trained to do a medicine review at least every
couple of months on somebody taking 17 medicines. One of the things
that makes me happiest when I see seniors, they come to see me, and I
look at the medicines they are on, if they are a new patient, the first
thing I do is take them off three or four, and they think I am a hero.
I am not a great doctor. It is just common sense that if one is on too
many medicines, one is not going to feel good.
The second thing is, if one is on 17 medicines, one is not going to
be taking them right. So they are not going to be effective.
The third thing is doctors have to pay attention to what medicines
cost. Guess what? Most physicians are not doing that. They are writing
a prescription. Our goal ought to be, as physicians, is if we are going
to help somebody get well, we ought to make sure we can give them a
prescription for a drug they can afford to take.
[[Page H2197]]
Now, that may not always be the best drug. It may be one that works
95 percent as well. But if they are taking the one that costs $5 that
works 95 percent as well compared to the one that costs four or five
times as much and worked 99 percent instead of 95, which would one
rather have one's mother and father on. I would rather have them on the
one they are going to take.
So I think there are a lot of common sense things that ought to be
approached before we ever start talking about sacrificing the future of
our grandchildren by expanding a new Medicare program.
Now, let me give my colleagues a little history on Medicare. We
talked about all the things. The closest the Federal Government, the
best the Federal Government has ever done in estimating the cost of a
new Medicare benefit they missed by 700 percent. So when my colleagues
hear a new drug program is going to cost $40 billion, it is going to
cost $280 billion at the least, $280 billion.
Instead of this program being bankrupt in 2023, it is going to be
bankrupt in 2007, 2008. Now, politically, if one is running for office,
it does not take much courage to say one will vote for a Medicare
benefit. But it takes a whole lot of courage to say, I do not think
that is the best thing for all of us as a society as a whole.
Why do we not fix the real problems associated with the delivery of
medicine and drugs and competition within the health care industry. By
ignoring it, that patient I talked about that had pneumonia is going to
die, and that is what is going to happen to Medicare. We will not let
it die because the career politicians do not have the courage to
challenge the system. It was last year that we finally got the Congress
to stop touching Social Security money. But this year, if you will
notice these charts, you can see how the Medicare money comes in.
Medicare trust money comes in, it goes to the Federal Government. They
use it, the excess money they put an IOU in there and the IOU is
credited to the Medicare trust fund. Here is what is going to happen
for the next 2 years.
These are not my numbers. These are Congressional Budget numbers as
of 2 weeks ago. This year, the surplus in the Medicare part A trust
fund is $22 billion. The surplus in the fiscal year 2000, right now, as
estimated by the CBO is $23 billion. So $22 billion of the $23 billion
that the politicians in Washington are going to call surplus is
actually coming from Medicare trust fund.
Mr. Speaker, how about us not touching that? How about us not
spending that on something else? How about us retiring outside debt, so
that when it comes time for us to use that, we will have the money,
that we will not have to go borrow it from our children and
grandchildren.
Year 2001, the same thing, $22 billion of the surplus which is
projected right now at $22 billion, it is all Medicare part A money. So
we can claim we have a surplus, but we have to wink and nod at you and
say, well, it really is part A trust fund money, but we are going to
borrow it, because we cannot control the appetite of the Federal
bureaucracies. We cannot make them efficient to do what they need to do
it, and we cannot meet the needs of the commitments that we have made
to the rest of America by making sure government is at least as
efficient as the private sector, what we are going to do is we are
going to steal the money.
Instead of $166 billion that we owe, we are going to go to $189
billion this year, and then we are going to go to $211 billion next
year. And then pretty soon, it is going to tail right back off, because
as we add a drug program, the numbers are going to be uncontrollable.
So we have major problems ahead of us, and they are confused because
the only thing that the people in Washington want to talk about is
answering the easy political problem. A senior has problem buying
drugs, so, therefore, we create a Federal program that buys drugs. That
is not the answer that our children deserve. That is not the answer
that you deserve when you elect people to come up here.
We need to make the hard choices, even if it means we do not get
reelected, we need to make the hard choices to fix the programs so they
work effectively.
I notice a friend of mine has shown up, the gentleman from Minnesota
(Mr. Gutknecht), and I would welcome him and recognize him now and
yield to him.
Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Oklahoma (Mr.
Coburn) for yielding and for this special order and I thank our
colleagues earlier for talking about this problem, because it is a
major problem. And, unfortunately, for both the administration and some
of the leadership here in Congress, what we are talking about is
solving what some people say is the problem, and that is that seniors
are not getting the prescription drugs or a benefit that some people
feel they should, when the real problem is runaway prices, and as the
gentleman indicated earlier, a tendency to overprescribe.
Mr. Speaker, I am not certain what we can do in terms of influencing
the medical professionals as it relates to overprescribing, but I think
we need to take an honest and sober look at how much Americans pay for
prescription drugs relative to the rest of the world. Now, I do not
believe in price controls. I believe in markets. I believe at the end
of the day that markets are more powerful than armies.
Last Saturday night, I was privileged to attend a dinner and the last
leader of the Soviet Union, Mikhail Gorbachev, spoke to us; and it was
interesting, because as he talked for an hour and 12 minutes, he went
through sort of his metamorphosis and where he finally came to the
acknowledgment that they could not compete with the United States, that
a market economy was much more efficient than a controlled government-
run economy.
He finally reached the point where he realized that both militarily,
economically, and, perhaps, even socially and culturally, that the West
had won, and they had to do something else. I believe in markets.
Mr. Speaker, I believe that the idea of having a big government
bureaucracy trying to control prices and make certain that everybody
gets the right drugs, I think that is ridiculous; and frankly, if
anything, here in Washington, we ought to be restricting the power of
the Health Care Finance Agency and of the FDA.
Let me just run through this. There is a group, I believe they are
out of Utah. I owe them a big debt of gratitude William Faloon has put
out a brochure, and this is available to any Member or anyone else who
wants to call my office, we will send them out a copy of this. They
have done an interesting study on the differences between prescription
drug prices here and in Europe.
We have a tendency to still think of Europe as being sort of our
adolescent child. After World War II, the United States basically made
certain that the European economy was rebuilt, but today the European
Union has a bigger economy, in terms of gross domestic product, than we
do. It is interesting in respects, we continue to subsidize what is
happening in Europe, whether it is militarily and even in drugs.
Let me just run through a few of these drugs. And frankly the
gentleman probably knows better than I do what these drugs are
prescribed for, but these are some of the most commonly prescribed
drugs in the world. One the gentleman mentioned earlier is Premarin.
The average price in the United States, according to a study done by
the Life Extension Foundation, Mr. Faloon's organization, the average
price in the United States last year was $14.98 for a 28-day supply.
The average price in Europe is $4.25.
Mr. COBURN. For one third of the price?
Mr. GUTKNECHT. Less than a third of the price.
Mr. COBURN. The same drug?
Mr. GUTKNECHT. The same drug made by the same company in the same
plant under the same FDA approval.
Mr. Speaker, let me run through a few more. Synthroid, now that is a
drug that my wife takes. In the United States, the average price for a
50-tablet supply of 100 milligrams, the average price in the United
States $13.84. In Europe, it is $2.95. Cumadin, that is a drug that my
dad takes. He has a heart condition. It is a blood thinner I
understand. Cumadin, 25 capsules, 10 milligrams, the average price in
the United States $30.25; the average price in Europe $2.85.
[[Page H2198]]
Let us take Claritin, which is a commonly prescribed drug in America
today, and they advertise quite heavily, as the gentleman indicated
earlier, the average price in the United States for a 20-tablet supply
of 10 milligrams is $44. In Europe that same drug made in the same
plant by the same company, same dose everything is $8.75.
Augmentin, and I do not know what Augmentin is for perhaps the
gentleman does.
Mr. COBURN. Augmentin is a very effective antibiotic.
Mr. GUTKNECHT. For Augmentin, a 12-tablet supply of 500 milligram
here in the United States we pay an average of $49.50. In Europe, for
exactly the same drug, the price is $8.75.
{time} 1945
Glucophage. Perhaps the gentleman can share with us what this is.
Mr. COBURN. That is an anti-diabetic drug.
Mr. GUTKNECHT. Apparently it is commonly prescribed; 850 milligram
capsules, quantity of 50. The average price in the United States is
$54.49. The average price in Europe is $4.50.
And this is a group in Minnesota that has done this study. Another
commonly prescribed drug, Prilosec, the average price here in the
United States is around $100 for a 30-day supply. That same 30-day
supply, if a person happened to be vacationing in Winnipeg, Manitoba,
and they take their prescription into a drugstore there, they will pay
$50.80 for the drug that sells in the United States for roughly a
hundred dollars.
But here is what is even more troubling. I will use that term. What
is more troubling is that if we were to buy that same drug, same
company, same FDA approval, but we purchase it in Guadalajara, Mexico,
that same drug sells for $17.50.
Now, I do not believe in price controls. I do not believe we should
have a new agency to try to control drug prices. I believe that markets
are more powerful than armies. But let me just say this. A few years
ago this Congress passed the North American Free Trade Agreement; and
we allow corn, we allow beans, we allow lumber, we allow cars, we allow
steel, and we allow all kinds of goods to go back and forth across the
border between the United States and Canada and between the United
States and Mexico. That is what free trade is all about. But there is
one exception. We do not allow prescription drugs to go across those
borders.
And, really, to give an analogy, and it is the best analogy that I
have come up with, let us just say that there are three drugstores. One
is on the north side of town, one is on the south side of town, and one
is downtown. Now, there is over a 50 percent difference in the prices
that those three stores charge, but our own FDA, our own Federal
Government, the Food and Drug Administration, says, Oh, you American
consumers can only buy your drugs from the most expensive store.
Now, I asked a businessperson this morning. I said, Suppose you are
in a business, and you find out that you are the largest customer of a
particular supplier, and yet you also find out that they are selling
exactly the same thing to some of your friends that are in the business
cheaper than they are selling to you, even though you are their biggest
customer. How long do my colleagues think that would last? But that is
exactly what is happening in the drug industry.
The FDA, and I believe really without any legislative approval, has
decided that they will unilaterally stop the importation of drugs into
the United States which are otherwise approved in the United States.
And to me that is outrageous. We should not stand idly by as a Congress
and allow our own FDA to stand between American consumers in general
and American seniors in particular. We should not allow our own FDA to
stand between them and lower drug prices.
And the one great thing about markets, whether we are talking about
oil or we are talking cotton or we are talking about prescription
drugs, I do not care what it is, the great thing about markets is they
have a way of leveling themselves.
In southeastern Oklahoma, I will bet that if the gentleman goes to
any of the elevators in his district, he will find that the elevator in
Enid--well, Enid is not in the gentleman's district. I am trying to
think of one of the towns. I have been to virtually every town in the
gentleman's district. But if the gentleman were to go to one town in
southern Oklahoma, the wheat price might be X amount today. And if the
gentleman called over to another elevator, it might be a different
price. The chances are the prices would be different.
But over time, what would happen? Those prices would tend to self-
regulate. Because the farmers start figuring out that if the elevator
in Enid, Oklahoma, is paying a higher price than the one in Muskogee,
they will all start going to Muskogee. And what happens is the prices
start to level. That is the way markets work. The unfortunate thing is
that our Federal Government has been standing in the way of allowing
those markets to work.
And so, again, I would say that Members who would like a copy of this
brochure, and I must say that I had nothing to do with writing this,
but this brochure, put out by the Life Extension Foundation, is a
reprint of their February Year 2000 brochure, which tells the whole
story. It gives an excellent chart of how much more American consumers
are paying.
Now, again, I do not want price controls. But this is what I say to
my seniors: we should not have ``stupid'' tattooed across our
foreheads. It is outrageous that Americans are paying upwards of 40
percent more than the rest of the world for prescription drugs, and it
seems to me that we have a moral obligation, particularly now that we
are having this discussion about opening up, in effect, perhaps a new
entitlement, if we do that without dealing with the real problem, which
is runaway prices, then I say, shame on us.
I yield back to my colleague from Oklahoma.
Mr. COBURN. Well, I thank the gentleman for making the point on
competition, and I think that is the question I would ask of the
seniors and those that are out there working today and those that are
going to be working tomorrow. Would it not make sense to try to fix
competition within the industry, improve the quality of our health care
and increase the efficiency and accuracy of the system before we go
solve the problem?
The question is can we make sure our seniors have available to them
the drugs that they need, that will give them effective treatment, and
can we do that in a compassionate way so that they are not passing up
supper to take a pill or they are not missing a pill to get supper? Can
we do that without creating a big government program?
I can tell my colleague that I believe we can. It will not be easy,
because we will have to attack our friends. We are going to have to say
there is not good competition. We are going to have to go back in and
make sure that the branches of government that are involved in assuring
competition in the drug industry are there.
That is not to say that the drug companies do not do a wonderful job
in their research. And it is not to say that they are not going to be
doing an even better job as we have all these genetically engineered
drugs that will come about in the next 10 years. But we hear the drug
companies say that they will not be able to do this because all these
prices are based on the fact that we spend all this money on R&D. Well,
the fact is the pharmaceutical industry spends more money on
advertising than they do on research. They have a cogent argument as
soon as that number on advertising drops significantly below the amount
of money that they are spending on research. Until then, they do not
have an argument that holds any water.
So our seniors out there tonight that are having trouble getting
prescription drugs and affording it, the first thing they need to do is
to ask their doctor to make an application for them for the indigent
drug program that almost every drug company has. That way they can at
least have the drugs.
Number two, they should ask their doctor if in fact there is not a
generic drug that could be used that will be almost as effective and
that will save a significant amount of money each year.
Number three, they should ask the doctor if he or he is sure that
every medicine they are taking they have to be taking. That way we can
make sure
[[Page H2199]]
that the patients are getting medicines that they need today; that the
medicines that they are taking are as effective and cost effective as
well, and that they truly need them.
That takes care of part of the demand. The other thing they can do is
insist that their representatives ask the Justice Department to look
aggressively at collusion and anti-competitive practices within the
drug industry. They should ask their elected representative to reverse
the bill 2 years ago that allowed drug companies to advertise
prescription drugs on television. Because we could save at least $2
billion this year, $5 billion next year in terms of the cost of drugs.
Finally, they should ask that their representative not steal one
penny from Medicare this year to run the Government. And if in fact we
do those things, we can meet the needs of our seniors, we can preserve
Medicare and extend its life, and we can assure that our children and
our grandchildren are not going to be burdened with another program
that is inefficient, underestimated in cost, and really does not solve
the underlying problem associated with prescription drugs for our
seniors.
I yield to the gentleman from Minnesota for any additional comments.
Mr. GUTKNECHT. Well, I thank the gentleman from Oklahoma (Mr.
Coburn).
I would only say that I think what the gentleman is really saying is,
and this is really an interesting debate, that at the end of the day it
is about fundamental fairness. It is, from a generational perspective,
wrong for us to borrow from the next generation.
But it is also wrong for the drug companies to require Americans to
pay the lion's share of all the research and development cost as well
as footing most of the cost for their profit. And the dirty little
secret is that that is what is happening in the world today. We have a
world market, but the drug companies have realized that they can get
most of their profit, most of their research and development money,
from the American market.
Now, I think Americans should pay their fair share of research cost.
I think that is important. I agree with the gentleman that I am not
certain Americans should have to pay advertising costs. Ultimately, it
really should be the decision of the doctor more than being market
driven and having almost a pulling effect through the marketplace by
advertising, by broadcasting on television, radio, and so forth. I am
sure that that is an issue that we need to address.
But I want to come back to just how much more we pay. It is not just
us saying this. This is a study done by the Canadian Government. If
people forget everything that I have said tonight, remember a couple of
numbers. One of the most important numbers is 56. By their own study,
the Canadian government says that Americans pay 56 percent more for
their prescription drugs than Canadians do.
Now, 56 is important, too, because over the last 4 years prescription
drugs in the United States have gone up 56 percent, 16 percent just in
the last year. One of the biggest driving costs in terms of the cost of
insurance over the last several years has been the increasing cost of
prescription drugs.
Now, again, that is important. We need prescription drugs. We need to
make certain that we are doing what we can so that the next generation
of drugs can come online. I believe in research, and I believe part of
the reason we enjoy the high standard of living that we do in America
today is because of the research that has been done in the past. So we
do not want to cut that. We do not want to create a new bureaucracy.
But we also do not want to steal from our kids, and we do not want to
``solve this problem'' by creating a whole new entitlement.
Here is another fact. Last year, according to the Congressional
Budget Office, we, the American people, we the taxpayers, the Federal
Government, spent over $15 billion on prescription drugs. Now, that is
through Medicare, Medicaid, the VA, and other Federal agencies.
Mr. COBURN. Let me clarify that for a minute, because I want to be
sure all our colleagues understand that. That is Federal payments for
prescription drugs.
Mr. GUTKNECHT. Just Federal payments. Now, there is a match with
Medicaid, there is a match with some of the other programs, and of
course in some of those cases the individuals themselves had some kind
of a copayment. But that is what the Federal Government spent for
prescription drugs last year, according to the Congressional Budget
Office.
Now, virtually every study I have seen, independent studies, say that
Americans are paying at least 40 percent more than the world market
price for those drugs. Now, I am not good at math, and I demonstrated
that this morning; But let us say 30 percent. Let us say we are already
getting some discounts. And I suspect we are. I do not think we are
paying full retail at the Federal level for our prescription drugs. So
let us say we are getting some discounts. But let us just say we could
bring our prices somewhere near the world average price for these same
drugs. If we could save 30 percent times $15 billion, that is over $4
billion.
That would go a long ways to solving our problem, to making certain
that people on Medicare all have the opportunity to get the drugs that
they need and, again, that they do not have to make the choice that the
gentleman talked about earlier. They do not have to choose between
eating supper on Friday or taking the drugs they need, not only to
preserve their health but to preserve their quality of life. Because
drugs are important in that regard. It is not just about extending our
life, it is about improving the quality of our life.
And drugs are wonderful things. And I certainly do not want to take
anything away from the pharmaceutical companies. But as I say, I do not
think we should be required to pay more than our fair share of the cost
of developing those drugs, of making those drugs, of getting those
drugs approved, and then plowing more money back into the next
generation.
So I think we are on the same page. I just want to finally say this.
This is a matter of basic fairness. As I said earlier, I do not think
we should allow our own FDA to stand between American consumers and
more reasonable drug prices, because that is what is happening today.
Finally, not hearing most of the discussion from our friends that
spoke before us, this is not a debate between the right versus the
left. It is not even a debate between Republicans versus Democrats.
This is really a debate about right versus wrong. And it is simply
wrong for us to shovel billions of more dollars into an industry who
right now is charging Americans billions of dollars more than they
would normally pay in terms of a world market price.
{time} 2000
The answer is not to steal more from our kids to give more money to
the big pharmaceutical companies. The answer is coming up with a
market-based system that allows some kind of competitive forces to
control the price of the drugs and therein creating the kinds of
savings which will make it much easier for us and for those seniors to
get the drugs that they need.
And so, my colleague is absolutely right, this is not an unsolvable
problem. If we will work together, if we will listen to each other, if
we will be willing to tackle some of those tough problems, and if we
are willing to take on some of the entrenched bureaucracies, whether it
is at the FDA or the large pharmaceutical company, the Department of
Justice, and even some of our friends in the medical practice, if we
are willing to ask the tough questions, force them to have to work with
us to find those answers, this is a very solvable problem.
I just hope we do not make the mistake of creating a new expensive
bureaucracy, a new expensive entitlement and, at the very time we ought
to be doing more to control the prices of prescription drugs, have the
net practical effects of driving them even higher. That would be a
terrible mistake not just for this generation but for the next, as
well.
Mr. COBURN. Mr. Speaker, I thank the gentleman for his comments.
In closing, the next time my colleagues hear a politician from
Washington talk about prescription drugs, ask themselves why they are
not treating the pneumonia that this industry has, ask themselves why
they are not saying there needs to be competition in drugs, ask
themselves why they are not
[[Page H2200]]
saying the FDA needs to be approving more generics, ask themselves why
they are not speaking about the underlying problems associated with
delivery of health care and medicines to our seniors instead of
creating a new program which our children will pay for but, most
importantly, will be twice as expensive as what it should be because we
have not fixed the underlying problems.
I want to leave my colleagues with one last story. I recently had one
of my senior patients who had a stroke. She was very fortunate in that
she had no residuals. But the studies of her carotid arteries proved
that she had to be on a medicine to keep her blood from clotting.
One of my consulting doctors wanted to put her on a medicine called
Plavix. It is a great drug. It is a very effective drug. The only
problem is it costs over $200 a month. The alternative drug that does
just as well but has a few more risks, which she had taken before in
the past, is Coumadin.
Now, the difference in cost per month is 15-fold. I could have very
easily written her a prescription for Plavix. She would have walked out
of the hospital, not been able to afford the Plavix, and had another
stroke, or I could have done the hard work and said, this is going to
do 95 percent of it. It is going to be beneficial. It has a few risks.
Here is what this costs. What do you think? She chose to take the
Coumadin because that gives her some ability to have some control of
her life.
So these are complex problems; and I do not mean to oversimplify
them, and I do not mean to derange either the physicians, the patients,
or the drug companies, other than to say that our whole economy is
based on a competitive model and, when there is no competition, there
is price gouging.
Today I honestly believe in the drug industry there is price gouging.
We need to fix it, and we need to fix that before we design any
Medicare benefit to supply seniors with drugs, especially since there
are free programs out there that are not being utilized that are
offered by the drug companies.
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