[Congressional Record Volume 146, Number 49 (Wednesday, April 26, 2000)]
[Senate]
[Pages S2941-S2943]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GORTON:
  S. 2464. A bill to amend the Robinson-Patman Antidiscrimination Act 
to protect American consumers from foreign

[[Page S2942]]

drug price discrimination; to the Committee on the Judiciary.


                     PRESCRIPTION DRUG FAIRNESS ACT

  Mr. GORTON. Mr. President, yesterday, a group of 22 Washington State 
senior citizens boarded a bus in Seattle and drove to British Columbia 
in Canada to purchase their prescription medicine. Collectively, those 
22 individuals saved $12,000 by taking that bus ride--an average of 
more than $550 per individual. It is stories like this that have taken 
place over the last 2 or 3 years that bring me here today.
  Every day, all across our northern and southern borders, Americans 
leave the U.S. in order to purchase products discovered, developed, 
manufactured, and sold in the United States, but substances, 
prescription drugs, that are far less expensive in Canada, Mexico, and 
for that matter, in the United Kingdom and across Europe than here in 
the United States.
  My own office did an informal survey and found that for the ten most 
commonly prescribed drugs, prices in British Columbia average 60-
percent less than prices for the identical drugs in the identical 
quantities in the State of Washington. These lower prices don't apply 
only in Washington State or in our northern border States. For example, 
Prozac, to treat depression, is 95 cents a pill in Mexico and $2.21 in 
the United States. The allergy drug, Claritin, costs almost $2 a pill 
in the United States and 41 cents in the United Kingdom. Rilutek, to 
treat Lou Gehrig's disease, costs $9,000 in the United States and 
$5,000 in France.
  Now, it is simply unfair to impose these higher prices on citizens of 
the United States at the drugstore cash register, when the same drugs 
are being sold by the same companies at wholesale, at so much lower 
prices almost everywhere else in the world.
  What is the reason for this price differential? It is a simple one. 
Each of these other countries imposes price controls on the price for 
which they allow their purchasers to pay. The American company, on the 
other hand, looks at the situation and says that price is too low to 
cover my costs of research and development, but I can impose all of the 
costs of research and development on American citizens. The marginal 
cost of manufacturing more pills and selling them in France, Mexico, or 
in Canada is really very small. So I can sell for half the price in 
Canada that I charge in the United States and still make a profit.
  The company makes out just fine. The American citizen pays the price. 
The American citizen pays the price more than once because the American 
citizen has already paid roughly 50 percent of the cost of developing 
that drug through our tax system, either through direct appropriations 
at the National Institutes of Health or through various research and 
development tax credits.
  Just on Sunday morning, the New York Times had an extensive article 
on a drug called Xalatan, which is used for glaucoma, an eye condition, 
developed by an NIH grant in the original instance at Columbia 
University, sold to an American drug company which did the rest of the 
research and development but sold today for one-third of the American 
price in Hungary, and barely half or a third of the American price in 
France and Canada and in the rest of the world. That is all due to the 
fact that these other countries are getting a free ride on the backs of 
American citizens, American purchasers, for the research, development, 
marketing, and sale of these drugs.

  Now, I have labored for the last 5 months to find an answer to this 
question, and my favorite answer to this question at this point is 
included in the bill. The bill is very simple. It builds on an almost 
65-year-old precedent, which is the Robinson-Patman Act. In 1936, this 
Congress passed the Robinson-Patman Act and prohibited price 
discrimination, with very minor exceptions, in sales to U.S. purchasers 
from manufacturers and from wholesalers, designed originally to prevent 
the big chain company from getting such a price break from the 
manufacturer that it could drive its smaller competitors out of 
business. It simply prohibited that kind of price discrimination.
  My bill amends that 65-year-old Robinson-Patman Act by extending that 
nondiscriminatory provision from interstate commerce to interstate and 
foreign commerce with respect to prescription drugs. Remember, this law 
has applied to our American drug manufacturers for 65 years, as far as 
their sales within the United States are concerned. Now, if my bill 
passes, it will apply to their sales overseas, outside of our country. 
That will spread the cost of research and development fairly across all 
of the purchasers, not just the American purchasers, and will 
inevitably result in lower prices for American prescription drug users, 
which is exactly what we ought to do. We will give the drug 
manufacturers not only the opportunity, but the requirement that they 
treat their American purchasers fairly, just as they have been required 
not to discriminate among American purchasers for more than six 
decades.
  As you know, we are in the midst of a national debate over 
prescription drugs and, most particularly, over whether or not we 
should grant a prescription drug benefit to at least certain senior 
citizens who are the beneficiaries of our Medicare system. Just 2 weeks 
ago in this body, we voted on a budget resolution that authorizes up to 
$40 billion for such a drug benefit over the course of the next 5 
years. I supported that budget resolution, and I will support what our 
proper committees report to us in response to that resolution.
  That will benefit one distinct group of senior citizens, those whose 
income levels are low enough to benefit from this assistance in 
purchasing their prescription drugs. It will do absolutely nothing for 
other seniors. It will do nothing for the 44 million uninsured in the 
United States. It will do nothing for the costs of health care 
insurance--for those policies that prescribe prescription drug benefits 
and, therefore, have that cost reflected in the insurance premiums at 
all. In other words, as important as it is to certain seniors, it won't 
go to the heart of the problem--the high and increasing cost of 
prescription drugs.
  Part of those high costs are due to the great success of our drug 
companies. More and more, a greater share of our health care dollars go 
to the prescription drug feature every year because they are now 
successful in treating conditions that previously could not be treated 
at all or required hospitalization. We should hail that progress. We 
certainly should support drug companies' research and development of 
new medicines, but we should not countenance discrimination against 
American citizens and against American purchasers by allowing those 
companies to sell precisely the same prescription in almost every other 
country in the world at prices half or less than half of what they sell 
them for in the United States.
  I have been working on this proposition ever since a November 1999 
cover story in Time magazine which first illustrated the stark nature 
of this problem and its costs. With all of this work and with my 
consultation over the last month with the drug companies themselves, 
which do not like my bill one bit, I have sought a goal. I am not 
wedded to a particular means. I think this bill is a good way to reach 
that goal, but it is not necessarily the only goal. I want the drug 
companies themselves to come up with an answer to this question.
  Members on both sides of the aisle have introduced so-called 
``reimportation'' bills, which I find relatively attractive though 
rather bizarre. At the present time, my senior citizens can go up to 
Canada, as they did yesterday, and buy a 3-month supply of 
prescriptions for their own personal use and bring them back to the 
United States. But the pharmacy in Bellingham, WA, can't go up to a 
wholesaler in Canada and get the lower Canadian price and pass it on to 
that pharmacy's customers in the State of Washington. That kind of 
reimportation is barred, even though we are talking about precisely the 
drug that the Bellingham pharmacy is now required to buy directly from 
the manufacturer.
  Reimportation bills with certain limitations would lift that 
restriction and would allow the bizarre situation where the drugstore 
in the United States could purchase an American-manufactured drug in 
Canada for less than it could buy it for in the United States. I think 
that solution may very well be the direction in which we ought to go. I 
am also convinced that there are other ways of doing it. I will say

[[Page S2943]]

that the drug companies made a reasonable suggestion to me for a tiny 
bit of the problem.
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