[Congressional Record Volume 146, Number 84 (Wednesday, June 28, 2000)]
[House]
[Pages H5426-H5434]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    DRUG IMPORT FAIRNESS ACT OF 1999

  Mr. BILBRAY. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3240) to amend the Federal Food, Drug, and Cosmetic Act to 
clarify certain responsibilities of the Food and Drug Administration 
with respect to the importation of drugs into the United States.
  The Clerk read as follows:

                               H.R. 3240

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Drug Import Fairness Act of 
     1999''.

     SEC. 2. FINDINGS.

       The Congress finds as follows:
       (1) Pharmacists, patients, and other persons sometimes have 
     reason to import into the United States drugs that have been 
     approved by the Food and Drug Administration (``FDA'').
       (2) There have been circumstances in which--
       (A) a person seeking to import such a drug has received a 
     notice from FDA that importing the drug violates or may 
     violate the Federal Food, Drug, and Cosmetic Act; and
       (B) the notice failed to inform the person of the reasons 
     underlying the decision to send the notice.
       (3) FDA should not send a warning notice regarding the 
     importation of a drug without providing to the person 
     involved a statement of the underlying reasons for the 
     notice.

     SEC. 3. CLARIFICATION OF CERTAIN RESPONSIBILITIES OF FOOD AND 
                   DRUG ADMINISTRATION WITH RESPECT TO IMPORTATION 
                   OF DRUGS INTO UNITED STATES.

       Section 801 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 381) is amended by adding at the end the following 
     subsection:
       ``(g)(1) With respect to a drug being imported or offered 
     for import into the United States, the Secretary may not send 
     a warning notice to a person (including a pharmacist or 
     wholesale importer) unless the following conditions are met:
       ``(A) The notice specifies, as applicable to the 
     importation of the drug, that the Secretary has made a 
     determination that--
       ``(i) importation is in violation of section 801(a) because 
     the drug is or appears to be adulterated, misbranded, or in 
     violation of section 505;

[[Page H5427]]

       ``(ii) importation is in violation of section 801(a) 
     because the drug is forbidden or restricted in sale in the 
     country in which it was produced or from which it was 
     exported;
       ``(iii) importation by any person other than the 
     manufacturer of the drug is in violation of section 801(d); 
     or
       ``(iv) importation is otherwise in violation of Federal 
     law.
       ``(B) The notice does not specify any provision described 
     in subparagraph (A) that is not applicable to the importation 
     of the drug.
       ``(C) The notice states the reasons underlying such 
     determination by the Secretary, including a brief application 
     to the principal facts involved of the provision of law 
     described in subparagraph (A) that is the basis of the 
     determination by the Secretary.
       ``(2) The term `warning notice', with respect to the 
     importation of a drug, means a communication from the 
     Secretary (written or otherwise) notifying a person, or 
     clearly suggesting to the person, that importing the drug is, 
     or appears to be, a violation of this Act.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Bilbray) and the gentleman from Ohio (Mr. Brown) each 
will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Bilbray).
  Mr. BILBRAY. Mr. Speaker, I ask unanimous consent to yield the time 
for the purpose of management to the gentleman from Oklahoma (Mr. 
Coburn).
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. COBURN. Mr. Speaker, I yield 3 minutes to the gentleman from 
Minnesota (Mr. Gutknecht).
  Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I am delighted that we are finally getting a chance to 
talk about this bill. We have had a lot of discussion today about the 
high cost of prescription drugs. I do not know if this chart was shown 
or a chart similar to it, but we have got a lot of charts and a lot of 
research has been done by a number of groups around the United States 
about the differences between what Americans pay for prescription drugs 
and what people around the rest of the world pay for exactly the same 
prescription drugs.

                              {time}  2340

  Let me give one example. My father takes a drug called coumadin. If 
one buys that drug in the United States, the price is $30, roughly 
$30.50 for a 30-day supply. If one buys that same drug made in the same 
plant under the same FDA approval in Europe, Switzerland, for example, 
you pay $2.85.
  Now, Mr. Speaker, we have the North American Free Trade Agreement. We 
have passed a number of free trade agreements and somehow we always 
wind up on the short end of that stick.
  Let me show another example. This is an example of a very commonly-
prescribed drug called prilosec. If one buys it in Minneapolis, the 
average price for a 30-day supply is $99.95, but if one buys it in 
Winnipeg, Manitoba, if one happens to be vacationing and they have 
their prescription, they take it into a pharmaceutical shop and it can 
be bought for $50.88, but if one happens to be vacationing down in 
Mexico, in Guadalajara, Mexico, the same drug, made in the same plant, 
under the same FDA approval, can be bought for $17.50.
  Mr. Speaker, this is really about basic fairness. If we are going to 
have the North American Free Trade Agreement, American consumers ought 
to be able to benefit from this. It is easy for us to blame the big 
pharmaceutical supply companies, the big manufacturers, but the truth 
of the matter is, one of the real culprits and one of the real reasons 
we can see these big differentials is our own Food and Drug 
Administration, because when consumers try to order these drugs or 
reorder drugs that they have bought at a pharmacy, whether it be in 
Guadalajara or Winnipeg or wherever, when they try to reimport, bring 
those drugs back in and reorder, they get a very threatening letter 
from our own FDA.
  The unvarnished truth is, Mr. Speaker, our own FDA is defending this 
system. Our own FDA is standing between American consumers and lower 
drug prices.
  So I have offered a bill. It is a relatively simple bill. Part of the 
problem is that right now the burden of proof is on the importer to 
prove that it is a legal drug in the United States, and that is very 
difficult for a senior citizen living in Minnesota or Montana or 
wherever.
  What my bill basically says is the burden of proof is now going to be 
on the FDA. They must prove that those drugs are, in fact, illegal. 
Now, it is not the complete answer but it is a very important first 
step. If we can pass this here in the House, if we can get it passed in 
the Senate, if we can get it passed by the conference committee, we can 
begin the path to opening up our borders and having lower prescription 
drug prices for American consumers.
  Mr. BROWN of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I want to thank the gentleman from Minnesota (Mr. 
Gutknecht) for bringing attention to the fundamental issue underlying 
all of our efforts on prescription drugs. His efforts are admirable. 
Prescription drug prices are priced unreasonably, unjustifiably, 
outrageously high in the United States. That is the issue. Why are drug 
prices two times, three times, four times higher here than in other 
industrialized countries? Because the prescription drug industry can 
get away with it.
  We do not negotiate prices. We do not demand that drug manufacturers 
reduce their prices to reflect the taxpayer-funded portion of research 
and development. We do not make use of the collective purchasing power 
of 39 million Medicare beneficiaries to demand reasonably priced drugs.
  Two weeks ago I took a dozen seniors from northeast Ohio across the 
border to a Canadian pharmacy in Windsor, Ohio, where they paid one-
half, one-third and in a couple of cases one-sixth of what it would 
have cost to purchase their prescriptions in Cleveland or Lorraine or 
Medina.
  What these seniors were doing out of desperation was engaging in a 
practice called parallel importing. Current law prohibits reimportation 
of prescription drugs manufactured in the United States. FDA, however, 
permits exemptions for individuals who are purchasing a limited supply 
of an FDA-approved prescription drug for personal use.
  The U.S. is the wealthiest nation in the world. Our tax dollars 
finance a significant portion of R&D underlying new prescription drugs. 
Our senior citizens should not have to leave the United States to get 
the medicines they need. It should never have reached this point.
  Why do we tolerate it? We tolerate it because the prescription drug 
industry has a huge stake in the status quo and spends lavishly on 
television and in this institution to preserve it. They pour money into 
political campaigns. They pour money into front groups like Citizens 
for a Better Medicare. They pour money into advertising campaigns, 
campaigns touting the GOP's prescription drug coverage proposal, which 
this Congress in a partisan vote passed today, all of which undercuts 
the plan's credibility.
  They try to scare Americans into believing that if we do not let drug 
manufacturers charge obscenely high prices that medical research and 
development will dry up, but drug companies could afford to spend $8.3 
billion last year on marketing and advertising. Drug company profits 
outpace those of every other industry in this country by more than 5 
percentage points.
  Last year, Bristol-Myers-Squibb paid their CEO $146 million in salary 
and benefits.
  The drug industry consistently leads every other industry in return 
on investment, in return on assets and return on equity. Thanks to huge 
tax breaks, the drug industry's effective tax rate is 65 percent lower 
than the average for other U.S. industries. Drug prices can come down 
in the United States without stifling research and development. 
Unfortunately, it does not matter whether we could take steps to make 
prescription drugs more affordable. The only thing that matters is 
whether we actually do take those steps, and if the Republicans' 
prescription drug coverage plan is any indication GOP leadership is not 
going to sneeze without asking the drug industry's permission.
  That leaves American consumers who need affordable medicines with 
imperfect options like traveling to Canada to fill their prescriptions 
or to Mexico in

[[Page H5428]]

the southern part of the United States. That is what my colleague's 
amendment is about and I applaud him for that. It is intended to help 
pave the way for seniors to purchase their drugs across the border. 
Unfortunately, it does not fulfill that objective. It does not codify a 
senior's right to parallel import their prescription medications. The 
paperwork burden this amendment could create may force FDA to shift 
resources away from intercepting counterfeit or unsafe drugs.
  The gentleman from Arkansas (Mr. Berry), the gentlewoman from 
Missouri (Mrs. Emerson) and the gentleman from Vermont (Mr. Sanders) 
requested the right to offer an amendment during today's deliberations 
that would have explicitly enabled seniors to purchase their 
prescription drugs from countries where prices are reasonable, without 
compromising FDA's ability to protect consumers from counterfeit and 
unsafe medicines. The Republican leadership refused to permit 
consideration of that amendment.
  Once again, the Republicans have created a Catch-22 that protects the 
drug industry at the expense of consumers.
  Earlier, we were given a choice of voting for a smoke and mirrors 
prescription drug plan or voting for no plan at all. Now we are placed 
in a position of either, one, voting for an amendment that could 
compromise FDA's ability to protect consumers from counterfeit and 
unsafe medicines or, two, voting against an amendment that at least 
acknowledges the need to address prescription drug price discrimination 
and, most importantly, that asserts the right of consumers to fight 
back by getting their medicines outside the United States.
  Again, I applaud the gentleman from Minnesota (Mr. Gutknecht) for his 
good work and for underscoring the need to do something about the drug 
industry's discriminatory pricing, but regretfully I must oppose this 
particular bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. COBURN. Mr. Speaker, I yield myself 30 seconds.
  Mr. Speaker, just a couple of points on the points that the gentleman 
from Ohio (Mr. Brown) made. We also are not allowed by the rule and by 
the powers that be with an ability to limit the direct consumer 
advertising that should be a part of this, that consumed $1.9 billion 
last year, will consume $3.8 billion this year and will consume $7.6 
billion a year from now, all of which has no benefit for the American 
consumer except the American consumer is paying for it.

                              {time}  2350

  Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Florida 
(Mr. Miller).
  Mr. MILLER of Florida. Mr. Speaker, I thank the gentleman for 
yielding time to me.
  I congratulate the gentleman from Minnesota (Mr. Gutknecht) for 
bringing this issue up. I have been an early cosponsor of his 
legislation.
  My congressional district in Florida has more seniors than any 
district, or as many as any district in the country. It is a beautiful 
retirement area in southwest Florida.
  At my town meetings, I have had two concerns expressed by seniors. 
One is, we need help with our prescription coverage. Our prescription 
costs are so much higher today than they were certainly in 1965 when 
Medicare came in. We need to do something about it.
  This House for the first time in history finally passed legislation. 
Let us hope the Senate will act and we will get something to the 
President in the next few months. We really need to help the seniors.
  The other issue is, why are drugs lower in Canada and elsewhere 
around the world? I do not know the answer to that. As the gentleman 
from Minnesota (Mr. Gutknecht) showed in his chart, we just look at 
prescription after prescription where this is a fraction of the cost in 
Europe, whether it is in England, Ireland, France, or if we go to 
Mexico, it is lower.
  Why? I do not have an answer, but I do know how to solve the problem: 
Buy it where it is cheapest. If we can find a cheaper place to buy it, 
that is what the marketplace is all about. Let us let the market work. 
We should not have the government stand in the way to cause problems.
  That is what this FDA is doing, just making it more difficult. There 
is no reason why we cannot go buy our drugs from Montreal or London or 
Belfast or Bombay or Mexico City. Why not allow the marketplace to 
work?
  This is just a first step in the right direction. For my 
constituents, it is not going to be as convenient to go to Canada as 
for those of the gentleman from Minnesota (Mr. Gutknecht) or those of 
the gentleman from Vermont (Mr. Sanders) over there, but we should be 
able to pick up an 800 number, a fax, or the Internet.
  This is a global economy we are in. We have been opening up trade 
since I have been in Congress, whether it is the NAFTA bill back in 
1993, then we had the GATT, and just a month or so ago we had opening 
more trade with China.
  Why are not drugs available easily over the Internet? We should make 
that possible. Most drugs are manufactured outside the United States, 
anyway. The FDA certifies those laboratories where the drugs come from. 
It should not be that complicated to solve the problem.
  I think our government is just too bureaucratic to solve the problem. 
I urge support for this bill, and I hope we can go further beyond this 
bill. I congratulate the gentleman from Minnesota (Mr. Gutknecht).
  Mr. BROWN of Ohio. Mr. Speaker, I yield 2 minutes to the gentleman 
from Arkansas (Mr. Berry), who has been a leader on this and an 
absolute warrior against outrageously high prescription drug prices.
  (Mr. BERRY asked and was given permission to revise and extend his 
remarks.)
  Mr. BERRY. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I applaud the gentleman from Minnesota (Mr. Gutknecht) 
for his effort and his work addressing a very legitimate problem of 
Americans getting ripped off by drug manufacturers every time they 
visit their local pharmacy.
  Undoubtedly, something is needed to rectify the injustice that has 
resulted in Americans paying more for FDA-approved products made in 
FDA-approved facilities than citizens of any other country in the 
world.
  I have here two bottles. Both of them are Claritin, made by Schering 
Corporation. One of them is sold in North Dakota for $219 for 100 
tablets. The same 100 tablets in Canada is $61. It is one of the safest 
drugs ever made by man. It is unbelievable how safe this product is. 
Yet, the American people get ripped off, pay four times what they ought 
to have to pay for this product just because of the laws of the country 
that protect the prescription drug manufacturers in this country.
  The gentleman from Minnesota (Mr. Gutknecht) has approached this 
legislation with noble intentions and placed much effort into passing 
it. While I support his efforts, Congress should take a much more 
comprehensive approach in dealing with this situation.
  Under the Food, Drug, and Cosmetic Act, the burden is on the importer 
to demonstrate that an imported drug is safe, effective, and approved 
by the FDA. That product was originally made in an FDA-approved 
facility. As long as FDA approval information is not required to follow 
drugs sold abroad, importation by anyone other than the manufacturer 
will be next to impossible.
  There is also a great need to revisit a provision in the Food, Drug, 
and Cosmetic Act that protects American pharmaceutical companies at the 
expense of the consumers. This provision makes it illegal for anyone 
other than the manufacturer to reimport into the U.S. prescription 
medicine made by an American pharmaceutical manufacturer.
  Mr. Speaker, I include for the Record a Dear Colleague letter 
concerning H.R. 1885.
  The letter referred to is as follows:

Since 1994, Drug Makers Have Imported More foreign-Made Drugs Into The 
                     U.S. Than They Have Exported!


allowing pharmacies and wholesalers the same authority to import safe, 
 lower-priced, fda approved prescription drugs would save billions of 
            dollars for patients and american businesses!!!

       According to a recent analysis of global prescriptions drug 
     pricing, the same prescription drugs an American citizen 
     would spend $1.00 to purchase, would only cost $0.71

[[Page H5429]]

     in Germany, $0.68 in Sweden, $0.65 in the United Kingdom, 
     $0.64 in Canada, $0.57 in France, or $0.51 in Italy.
       Economic experts agree that under a market system without 
     regulatory or trade barriers, significant price differentials 
     in prescription drugs would not be sustainable. Products 
     would be bought from the lower-priced, foreign countries and 
     then resold in the higher-priced country. Economic theory 
     holds that as this process (known as arbitrage) occurs, 
     prices in the lower-priced country would rise while prices in 
     the higher-priced country would fall.
       Under FDA regulations and the Food, Drug, and Cosmetic Act, 
     only the manufacturers of a drug can import it into the 
     United States. Drug makers have unfairly used this monopoly 
     control over distribution in the United States to 
     discriminate against American consumers.
       By supporting H.R. 1885, The International Prescription 
     Drug Parity Act, you can help level the playing field for 
     American patients as well as businesses who are struggling to 
     continue providing employees and retirees with quality, 
     private sector coverage for prescription drugs.
       H.R. 1885 amends the Food, Drug, and Cosmetic Act to allow 
     American pharmacies and wholesalers to competitively purchase 
     drugs abroad that were manufactured in FDA approved 
     facilities, which have been safely stored and still meet 
     FDA's standards, and pass significant savings down to 
     consumers. Americans will benefit by being able to obtain 
     needed prescription medicines on a more affordable basis. 
     Under H.R. 1885, pharmacies and wholesalers importing drugs 
     would still have to meet the same standards set by FDA, which 
     allowed $12.8 billion worth of drugs to be imported into the 
     U.S. by manufacturers in 1997.
           Sincerely,
     Jo Ann Emerson,
     Marion Berry,
     Bernie Sanders,
                                              Members of Congress.
       (Table attachment).

  PHARMACEUTICALS: U.S. SHIPMENTS, DOMESTIC EXPORTS, IMPORTS FOR CONSUMPTION, MERCHANDISE TRADE BALANCE, APPARENT CONSUMPTION, EXPORTS AS A PERCENT OF
                                               SHIPMENTS, AND IMPORTS AS A PERCENT OF CONSUMPTION, 1993-97
                                                                  [Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Exports as a    Imports as a
                                                                                                             Apparent       percent of      percent of
                  Year                       Shipments        Exports         Imports      Trade balance    consumption      shipments      consumption
                                                                                                                             (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1993....................................         $58,428          $7,222          $6,094          $1,128         $59,556            12.4            10.2
1994....................................          60,811           7,565           6,966             599          61,410            12.4            11.3
1995....................................          68,473           7,996           8,583            -587          67,886            11.7            12.6
1996....................................          75,047           8,889          11,161          -2,272          72,775            11.8            15.3
1997....................................      \1\ 82,550           9,600      \1\ 12,836          -3,236          79,314            11.6            16.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated by U.S. International Trade Commission Staff.
 
Source: U.S. Department of Commerce.

  Mr. Speaker, I include for the Record the text of the bipartisan 
amendment offered by the gentlewoman from Missouri (Mrs. Emerson), 
myself, and the gentleman from Vermont (Mr. Sanders), to the House 
Committee on Rules, which failed.
  The amendment referred to is as follows:

       Add at the end the following title:

   TITLE IV--INTERNATIONAL PRICE COMPETITION REGARDING COVERED DRUGS

     SEC. 401. FACILITATION OF IMPORTATION OF CERTAIN DRUGS 
                   APPROVED BY FOOD AND DRUG ADMINISTRATION.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.) is amended--
       (1) in section 801(d)--
       (A) by striking paragraphs (1) and (2); and
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (1) and (2), respectively; and
       (2) by inserting after section 801 the following section:


                     ``importation of certain drugs

       ``Sec. 801A. (a) In General.--After consultation with the 
     United States Trade Representative (through the Office of 
     International Relations under section 803), the Secretary 
     shall promulgate regulations to carry out subsection (c) for 
     the purpose of facilitating the importation into the United 
     States of covered drugs (as defined in subsection (f)).
       ``(b) Compliance With Requirements Regarding Safety and 
     Effectiveness, Adulteration and Misbranding, and Other 
     Matters.--With respect to the importation of covered drugs 
     into the United States pursuant to this section, regulations 
     under subsection (a) shall include such provisions as the 
     Secretary determines to be appropriate (such as requiring 
     tests or documents) to ensure that each of the requirements 
     of this Act for the importation of drugs is met, including 
     requirements with respect to--
       ``(1) the safety and effectiveness of the drugs;
       ``(2) good manufacturing practices and other provisions 
     regarding the adulteration of the drugs;
       ``(3) the misbranding of the drugs; and
       ``(4) whether the drugs are forbidden or restricted in sale 
     in the country in which they were produced or from which they 
     were exported.
       ``(c) Facilitation of Importation.--If a covered drug is 
     domestically approved and is manufactured in a State and then 
     exported, or is domestically approved and is for commercial 
     distribution manufactured in a foreign establishment 
     registered under section 510, the manufacturer shall, as a 
     condition of maintaining the domestic approval of the drug, 
     comply with the following:
       ``(1) For each shipment of the drug that is manufactured in 
     compliance with current good manufacturing practice and other 
     standards under section 501, the manufacturer shall (without 
     regard to whether the shipment is intended for importation 
     into the United States) maintain a record that identifies the 
     shipment and purchaser of the shipment and states the fact of 
     such compliance.
       ``(2) For each such shipment, the manufacturer shall 
     (without regard to whether the shipment is intended for 
     importation into the United States) maintain a record that 
     identifies the shipment and provides the labeling required 
     for the drug pursuant to section 502 and pursuant to the 
     application for domestic approval.
       ``(3) Upon the request of pharmacist, wholesaler, or other 
     person who intends to import into the United States drugs 
     from such shipment (and who meets applicable legal 
     requirements to be an importer of covered drugs), the 
     manufacturer shall provide to the person a copy of each of 
     the records maintained under paragraphs (1) and (2) with 
     respect to the shipment.
       ``(d) Certain Criteria.--For the purpose of facilitating 
     the importation into the United States of covered drugs, the 
     Secretary shall through regulations under subsection (a) 
     establish the following criteria:
       ``(1) Criteria regarding the records required in subsection 
     (c) and the use of the records to demonstrate the domestic 
     approval of the drugs and compliance of the drugs with 
     sections 501 and 502.
       ``(2) Such criteria regarding the labeling of the drugs as 
     the Secretary determines to be appropriate.
       ``(3) Criteria regarding the amount of charges that may be 
     imposed by manufacturers of the drugs for maintaining and 
     providing the records specified in paragraph (1). Any such 
     charge may not exceed an amount reasonably calculated to 
     reimburse the manufacturer involved for the costs of 
     maintaining and providing the records.
       ``(4) Criteria regarding the information that may be 
     required by manufacturers of covered drugs as a condition of 
     providing the records.
       ``(5) Criteria regarding entities that may serve as agents 
     of persons described in subsection (c)(3) or that otherwise 
     may serve as intermediaries between such persons and 
     manufacturers of covered drugs.
       ``(e) Authority to Require Registrations.--
       ``(1) In general.--In promulgating regulations under 
     subsection (a), the Secretary may provide that a person may 
     not import a covered drug into the United States unless--
       ``(A) the person registers with the Secretary the name and 
     places of business of the person; and
       ``(B) in the case of each factory or warehouse in a foreign 
     country that held the covered drug prior to the drug being 
     offered for importation into the United States (other than 
     ones owned or operated by the manufacturer of the drug), the 
     owner or operator of the factory or warehouse--
       ``(i) registers with the Secretary the name and places of 
     business of the owner or operator; and
       ``(ii) agrees that the factory or warehouse is subject to 
     inspection in accordance with section 704.
       ``(2) Exemption for manufacturer.--Paragraph (1) does not 
     apply with respect to a covered drug that is domestically 
     approved, manufactured in a State, exported, and then 
     imported by the manufacturer of the drug.
       ``(f) Definitions.--For purposes of this section:
       ``(1) The term `covered drug' means a drug that is 
     described in section 503(b) or is composed wholly or partly 
     of insulin.
       ``(2) The term `domestically approved', with respect to a 
     drug, means a drug for which an application is approved under 
     section 505, or as applicable, under section 351 of the 
     Public Health Service Act. The term `domestic approval', with 
     respect to a drug, means approval of an application for a 
     drug under such a section.

[[Page H5430]]

       ``(3) The term `pharmacist' means a person licensed by a 
     State to practice pharmacy in the State, including the 
     dispensing and selling of prescription drugs.
       ``(4) The term `wholesaler' means a person licensed in the 
     United States as a wholesaler or distributor of prescription 
     drugs.''.
       (b) Conforming Amendment.--Section 801(d) of the Federal 
     Food, Drug, and Cosmetic Act (21 U.S.C. 381(d)) is amended in 
     paragraph (2) (as redesignated by subsection (a)(1) of this 
     section) by striking ``paragraph (3)'' each place such term 
     appears and inserting ``paragraph (1)''.
                                  ____


                               Memorandum

     To:
     From: Christopher J. Sroka, Economic Analyst, Resources, 
         Science, and Industry Division, Congressional Research 
         Service.
     Subject: Summary of H.R. 1885, the International Prescription 
         Drug Parity Act.
       This memorandum responds to your request for a summary of 
     the International Prescription Drug Parity Act (H.R. 1885). 
     H.R. 1885 seeks to amend the Federal Food, Drug, and Cosmetic 
     Act to facilitate the importation of prescription drugs into 
     the United States.
       It has been widely reported that prescription drug prices 
     are lower in many foreign countries than in the United 
     States. Two studies were conducted by the U.S. General 
     Accounting Office in the early 1990s. One study examined 
     prices in the U.S. relative to those charged in Canada, while 
     the second study examined prices in the U.S. vis-a-vis the 
     United Kingdom. The studies concluded that prices are 
     typically higher in the U.S. than in Canada or the U.K. 
     Complementing these empirical studies, there are many 
     anecdotal accounts of American citizens traveling to Canada 
     or Mexico to obtain their prescription drugs at a lower 
     price. Differences between the prices charged in the U.S. and 
     those charged in other countries have been attributed to 
     various factors.
       In theory, under a market system without regulatory or 
     trade barriers, significant price differentials in 
     prescription drugs would not be sustainable. Products would 
     be bought from the lower-priced, foreign countries and then 
     resold in the higher-priced country. Economic theory holds 
     that as this process (known as arbitrage) occurs, prices in 
     the lower-priced country would rise while prices in the 
     higher-priced country would fall. Arbitrage would continue 
     until, after taking into account differences in 
     transportation costs, a uniform price would prevail in both 
     countries.
       Current federal law and Food and Drug Administration (FDA) 
     policy prevents arbitrage in prescription drugs. All drugs 
     sold in the U.S., including imported drugs, must have been 
     manufactured in an FDA-approved facility. The FDA's policy is 
     to assume that, unless the importer has proof to the 
     contrary, imported drugs are not manufactured at FDA-approved 
     facilities. Obtaining proof that a drug sold abroad was 
     actually manufactured in an FDA-approved facility can be 
     burdensome for the importer because the foreign seller of the 
     drug might not have accurate documentation proving the drug's 
     origin. Furthermore, the Prescription Drug Marketing Act of 
     1987 limits the reimportation of prescription drugs. 
     Reimportation occurs when a drug manufactured in the U.S. is 
     exported to another country and then imported back into the 
     U.S. The prescription Drug Marketing Act of 1987 prohibits 
     reimportation by an entity other than the original 
     manufacturer of the drug. Thus, even if an importer could 
     prove that the pharmaceutical it wishes to import was 
     manufactured in an FDA-approved facility in the U.S., the 
     reimportation would be illegal.
       The intent of the FDA's importation policy and the 
     Prescription Drug Marketing Act was not to prevent American 
     consumers from obtaining drugs at lower prices. The purpose 
     was to ensure the safety of prescription drugs for American 
     consumers. At the time, the concern was that drugs imported 
     into the U.S. may have been counterfeit copies of FDA-
     approved products. Counterfeit drugs could pose a serious 
     health threat if they are not manufactured properly. Another 
     concern was that, even if the drugs were not counterfeit, the 
     proper storage and handling of legitimate products could not 
     be guaranteed once they exited the U.S. Furthermore, drugs 
     manufactured domestically but intended for export may be 
     labeled for use in the country of destination. Thus, these 
     drugs, if imported, might not meet the FDA's labeling 
     requirements. Drugs not labeled in accordance to FDA 
     regulations might pose additional health threats to American 
     consumers.
       H.R. 1885 seeks to remove the barrier to the importation of 
     prescription drugs, while at the same time ensuring the 
     safety of these drugs. The bill would strike the provisions 
     of the Federal Food, Drug, and Cosmetic Act that were added 
     by the Drug Marketing Act of 1987. Thus, entities other than 
     the original manufacturer could reimport pharmaceuticals.
       Furthermore, the bill would establish certain record-
     keeping requirements for pharmaceutical manufacturers. These 
     requirements would apply to (1) all drugs manufactured in the 
     U.S. and intended for export, and (2) all drugs manufactured 
     in FDA-approved facilities in foreign countries. The record-
     keeping requirements would apply regardless of whether the 
     drugs are intended for final sale in the U.S. Under the bill, 
     pharmaceutical manufacturers would be required to keep 
     records proving that each shipment of drugs was manufactured 
     in an FDA-approved facility. Manufacturers would also be 
     required to keep a record of the FDA-approved labeling for 
     each shipment of drugs, regardless of its final destination. 
     The bill would allow importers to obtain the manufacturing 
     and labeling records from the pharmaceutical manufacturer. By 
     obtaining these records, importers might be able to more 
     easily prove that the drugs they wish to import are safe and 
     comply with FDA regulations.

  Mr. COBURN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to add to what the gentleman from Arkansas 
had to say. Mr. Speaker, $5.9 billion of Claritin were sold last year. 
There are four other drugs with similar chemical moieties that have 
been approved by the FDA. Guess what, they are all priced the same. Why 
is that? Because there is not price competition in the pharmaceutical 
industry.
  Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. 
Hoekstra).
  Mr. HOEKSTRA. Mr. Speaker, I thank my colleague for yielding time to 
me. I also applaud my colleague, the gentleman from Minnesota (Mr. 
Gutknecht), for introducing this legislation and bringing it to the 
floor this evening.
  Mr. Speaker, there is no doubt that U.S. consumers are paying a 
premium for their prescription drugs. It is wrong. U.S. consumers have 
no problem paying for the product that they consume. They have no 
problem paying for the research and development costs that the 
companies incur. They do not mind paying a fair return to the investor 
and the drug companies.
  What they do object to is paying the profits and the research and 
development costs of our colleagues and our neighbors in Mexico, in 
Canada, in other parts of the world. We are subsidizing the consumption 
of prescription drugs in Canada, Mexico, and Europe. It is not fair to 
the American consumer, it is not fair to our American taxpayer.
  What this bill does is it says that if our consumers find these 
drugs, prescription drugs, available at a lower price in Canada, 
Mexico, or somewhere else, these drugs, prescription drugs, will be 
made available to the American consumer. It is the fair thing and it is 
the right thing to do.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 5 minutes to the gentleman 
from Vermont (Mr. Sanders), who has been very involved in fighting for 
parallel importation of prescription drugs.
  Mr. SANDERS. Mr. Speaker, I very much thank my friend, the gentleman 
from Ohio, for yielding time to me.
  I want to congratulate my colleague, the gentleman from Minnesota 
(Mr. Gutknecht), for introducing what I think is important legislation 
which raises some very, very fundamental issues.
  I think that tonight's discussion in terms of prescription drugs is 
good, and I am delighted to hear it taking place in a nonpartisan way, 
progressives, conservatives, who are standing up for the American 
consumer.
  I believe that I was the first Member of Congress to go across the 
border with constituents to purchase prescription drugs. I have made 
that trip twice. I made a trip a year ago to Canada. Like everyone else 
that we have heard tonight, my experience was that we went across the 
border and we were able to save Vermont constituents thousands and 
thousands of dollars.
  The one particular drug that comes to my mind now is Tamoxifen, which 
is widely prescribed for breast cancer. Here we have women fighting for 
their lives, they go across the Canadian border and they purchase that 
product for one-tenth the price that they were paying in the United 
States.
  It seems to me, and we have heard it all already, I must tell the 
Members, I have concerns about NAFTA and I voted against it; concerns 
about that aspect of the global economy.
  The bottom line is, as the gentleman from Florida (Mr. Miller) said a 
few moments ago, in every single product one can think of, whether it 
is a food product, whether it is shoes, whether it is apparel, there 
are massive amounts of trade taking place throughout the world. The 
question that the American people have to ask is why is it that there 
is an exception with prescription drugs.

[[Page H5431]]

  Legislation that has been offered by the gentleman from Arkansas (Mr. 
Berry) and the gentlewoman from Missouri (Mrs. Emerson) and myself 
which now has 85 cosponsors is a very simple piece of legislation. It 
is a free trade piece of legislation.
  What it says is exactly what the gentleman from Florida (Mr. Miller) 
was talking about a moment ago. That is, if one is a prescription drug 
distributor, if they are a pharmacist, they should be able to go out 
and purchase anyplace in the world that they can FDA-safety-approved 
products at the best price that one can purchase it.

                              {time}  0000

  And if the case is that one can go to Canada, the reason that 
Tamoxifen and all the other products are sold less expensively in 
Canada is that the pharmacists purchase the product for significantly 
lower amounts of money. Why is it that an American pharmacist has to 
pay 10 times more for a product than a Canadian or Mexican pharmacist?
  Mr. Speaker, it seems that people who believe in the competitive, 
free enterprise system should support legislation which says that a 
prescription drug distributor, so long as the product that comes into 
the country is safe and that is easily done, that that businessperson 
has a right to purchase that product at the lowest price he or she can 
so that it can be sold to the American people at a lower price, so that 
we end the disgrace that that chart was showing us that Americans are 
paying by far more than the people of any other country for the same 
exact prescription drug.
  Mr. Speaker, I think this particular piece of legislation is a small 
step forward, but it may open the door for further discussion. I hope 
tonight, and I mean this very sincerely, that in a nonpartisan way we 
can go forward. I think we are in basic agreement. The only rational 
objection that anyone can throw us is the fear of adulteration from 
abroad and so forth. That is easily addressed. If we can bring into 
this country pork and beef and lettuce and tomatoes from farms and 
ranches all over this continent, my God, we can regulate the 
importation of prescription drugs which are made in a relatively few 
factories.
  I think that we are onto something big tonight, and I think if we 
continue to work together in developing the concept of reimportation, 
we can substantially lower the cost of prescription drugs in this 
country 30, 40, or 50 percent and not see the American consumer the 
laughing stock of the world by paying two, three, five times more for 
products than other people throughout this world.
  So I see this discussion as a very, very important step forward. I 
congratulate the gentleman from Minnesota (Mr. Gutknecht) for bringing 
this piece of legislation to the floor; and I hope that after tomorrow, 
we will continue to meet and go forward and represent the American 
consumers and finally stand up to the pharmaceutical industry which is 
ripping our people off.
  Mr. COBURN. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from Idaho (Mrs. Chenoweth-Hage).
  Mrs. CHENOWETH-HAGE. Mr. Speaker, I thank the gentleman from Oklahoma 
for yielding me this time. It is very interesting, but since 1996, drug 
costs have increased by over 50 percent. But in yesterday's Wall Street 
Journal, the Wall Street Journal reported that the average cost of a 
prescription rose almost 10 percent in 1999.
  Now, for those aged 70 and up, costs for prescriptions rose by 15 
percent. Tell me, our senior citizens who are on fixed incomes, where 
are they going to get the extra 15 percent? From their heating bill? 
From their food? From the cost of their air conditioner? Where? And yet 
the drug companies are making massive profits off of the American 
consumer.
  Prilosec here for instance, $109 here. But in Mexico, it is $17.64 
for the same prescription. Something is dreadfully wrong.
  The Canadian Government yesterday released a study showing that the 
Canadian consumers pay 56 percent less than Americans for patented 
medications.
  Now, our drug companies are well supported by the American taxpayer. 
According to a 1993 report by the Office of Technology, in addition to 
general research and training support, there are 13 programs 
specifically targeted to fund pharmaceutical research and development. 
That same report noted, of all U.S. industries, innovation within the 
pharmaceutical industry is the most dependent upon academic research 
and the Federal funds that support it. Translate that to the taxpayers' 
dollars that already support it.
  In fact, in 1997, Merck and Pfizer devoted only 11.2 percent of their 
revenue to research and development. Pfizer and Merck devoted 11.2 
percent to research and development, while marketing costs consumed 30 
percent. And that includes all the television ads that we are seeing 
now. So generally across the board for the drug companies, research and 
development is about 20 percent, marketing about 20 to 30 percent; but 
manufacturing is 5 to 25 percent. That is the level that other 
countries draw when they negotiate these contracts with American drug 
manufacturers.
  Mr. Speaker, I highly support the bill offered by the gentleman from 
Minnesota.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 4 minutes to the gentleman 
from Michigan (Mr. Dingell), who tried so hard to offer an alternative 
plan today, and was not allowed, on the prescription drug bill.
  Mr. DINGELL. Mr. Speaker, I thank the distinguished gentleman from 
Ohio (Mr. Brown) for making this time available to me.
  I would love to support this bill. I think it is a wonderful thing. I 
am looking at the picture down there which tells how outrageously high 
drug prices are in this country. I commend the author of the 
legislation, and I hope that in some way this is helpful.
  Mr. Speaker, I wish that we had considered these matters with a 
greater degree of care at a little earlier time when we were 
considering the legislation which related to what we are going to do to 
American citizens who are senior citizens who are desperately in need 
of fairer and more appropriate prices for prescription pharmaceuticals.
  I think it is a great shame that this body did want to have a rule 
which permitted the proper consideration of a perfectly germane 
amendment which would have been offered by the gentleman from Arkansas 
(Mr. Berry), the gentleman from Vermont (Mr. Sanders), and the 
gentlewoman from Missouri (Mrs. Emerson) on the other side of the 
aisle. I think that we would then have come up with an end package 
which would have afforded us a great deal more hope that, in fact, we 
were doing good for the American people in seeing to it that they got 
prescription pharmaceuticals at more fair and more competitive prices.
  But, unfortunately, this curious rule has precluded us from 
considering a perfectly germane amendment which would have done that. 
We now find ourselves in the regrettable position of confronting the 
possibility that the easing of the law with regard to food and drug and 
cosmetics, which is going to be done here under this legislation, will 
in fact reduce the safety of the American consuming public.
  I would like my colleagues to know that this Congress has worked very 
carefully to see to it that the American people got the greatest 
protection with regard to prescription pharmaceuticals. We did it by 
putting the burden upon the importers, putting the burden upon the 
manufacturers, so that at every stage the burden was on him who would 
release into the marketplace substances which have enormous capacity 
for doing good, but which also have intolerable and enormous capacity 
to do great hurt to the consuming public: to kill, to maim, to hurt, to 
blind, to poison, and, indeed, to sicken.
  The practical result of this legislation the way it is done is going 
to be to facilitate the entry into this country of pharmaceutical 
products over which the Food and Drug Administration is going to lose 
much of its power to protect the American consuming public. And, in 
fact, the practical result of this legislation is going to be to 
increase the risk to the American public in order to afford competition 
for what we all know are, in fact, excessively highly priced 
prescription pharmaceuticals.
  What we are doing here, and what history is going to tell us we have 
done, is that we have increased the risk

[[Page H5432]]

but afforded a very small increase in benefits in terms of competition 
and that the risk that we are increasing is going to be very, very 
large and that we are going to find that there will be some splendid 
scandal on the hands of those of us who vote for this legislation 
tonight.
  Mr. Speaker, the result of that is going to be that we are going to 
be compelled at some time in the not-distant future, after we have seen 
what is going to occur under this legislation, to come back and address 
something which could have been handled better if the rule had 
permitted the consideration of the amendment which the gentleman from 
Arkansas (Mr. Berry), the gentleman from Vermont (Mr. Sanders), and the 
gentlewoman from Missouri (Mrs. Emerson) would have offered to the 
people of this country and upon which we might have done a better job 
of legislating in the overall public interest.
  Mr. Speaker, I regret what we are doing. We will be sorry.
  Mr. Speaker, I rise in opposition to H.R. 3240, because, although it 
seems benign, it would hurt the enforcement of laws ensuring the safety 
and efficacy of imported drugs.
  The Prescription Drug Marketing Act came into being after an 
investigation that revealed serious irregularities with respect to 
adulterated and counterfeit drugs from abroad. Recent investigations of 
Internet Web sites indicate there is still cause for concern. 
Significant quantities of prescription drugs from every source around 
the globe are entering this country on a daily basis through the U.S. 
mail. In fact, just last year the U.S. Customs agency had a more than 
400 percent increase in the amount of pharmaceutical drugs they found 
being sent into this country from abroad. In many cases, these drugs 
arrive in unmarked plastic bags, with no indications of what they are, 
where they came from, or even how they should be taken. Are they real? 
Who knows? Are they adulterated? Who knows? Can they cause harm? Who 
knows? What we do know is that there was a problem with certain drug 
sources when we first looked into this matter more than decade ago, and 
there continues to be a problem today.
  I do want to acknowledge the beneficial aspects of the bill before 
us. Lack of access to medically necessary prescription drugs is a real 
problem faced by millions of Americans. I command my colleague, Mr. 
Gutknecht, and all who will support him today, for recognizing that the 
price Americans pay for drugs is too high. But, first and foremost, the 
PDMA is a public health and safety law. We should therefore tread 
carefully before changing it. I am greatly concerned that the bill 
before us has not been the subject of hearings, or a thorough 
examination about why the Food and Drug Administration (FDA) sends 
warning letters to consumers that may be engaged in potentially risky 
behavior. This bill may make it very difficult for the FDA, as a 
practical matter, to provide thousands of consumers with a warning 
regarding what may be potentially risky behavior. I speak not only 
about the person that drives across to border to Mexico, but also to 
the numerous individuals now purchasing their drugs from one of 
hundreds of Internet sites that now exist.
  I am open to a careful review and revision of PDMA for the purpose of 
creating a paradigm for drug importation that is safe for our consumers 
while facilitating access to the international market prices at which 
many commonly prescribed prescription drugs are available. But this 
bill, and this process, do not have my support.

                              {time}  0010

  Mr. COBURN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would just like to make note of the fact that the 
wonderful Food and Drug Administration bureaucracy that we have seen 
built over the last 40 years, the average price to get a drug through 
that organization is $450 million, of which only $50 million is 
allocated for safety, $400 million for efficacy for a Food and Drug 
Administration to tell somebody where to put a bathroom in a plant, and 
bureaucratic overregulation.
  So when we talk about how effective it is, it is important to know 
what portion of the costs are really on safety and that portion which 
is not associated with safety.
  Mr. Speaker, I yield 3 minutes to the gentleman from Montana (Mr. 
Hill).
  Mr. HILL of Montana. Mr. Speaker, I thank the gentleman from Oklahoma 
for yielding me the time, and I thank the gentleman from Minnesota (Mr. 
Gutknecht) for bringing this measure before the House. I am proud to be 
a sponsor of the bill and to stand here to support it.
  We just spent I think about 12 hours debating Medicare reform and 
prescription drugs. Regardless of where my colleagues were on the final 
vote, I think that everybody in this House should be happy with the 
fact that the Congress has finally got on record that it is going to do 
something to try to help senior citizens with prescription drugs. I 
know that everybody here is hopeful that we can get a bill that the 
Senate can pass and the President can sign to do that.
  But we have a big problem in this country, and that is the soaring 
cost of pharmaceutical drugs. The General Accounting Office estimated 
the bill we just passed will reduce the price of prescription drugs to 
seniors by 25 percent, perhaps as much as 39 percent. But I am 
concerned whether that will become a reality as a consequence of that 
bill. Drugs are going up at the rate of four times the rate of 
inflation. Last year, almost 10 percent, the price of pharmaceutical 
drugs went up.
  The irony is that, in my State of Montana, people can go right across 
the border, and they can buy these same prescription drugs for 56 
percent less in Canada. The reason is that the FDA, in essence, has 
created a barrier so that Montanans cannot purchase drugs. They cannot 
purchase their pharmacy needs in Canada.
  Now, the irony of all this is that we have the North American Free 
Trade Agreement. We have below-cost, cheap cattle pouring across the 
border in Montana, over a million of them last year. We have below-cost 
wheat pouring across the Montana border taking away our markets. Cheap 
cattle and cheap grain come across the border, no problem at all.
  As a matter of fact, I do not know if the Members of the House 
realize it, but cattle, swinging carcases, come into this country from 
Canada, and they have a USDA stamp on them that says that they are 
inspected and graded by the U.S. Department of Agriculture even though 
they are not because the NAFTA agreement says that they can do that.
  Now, Montanans would like to have a little benefit from NAFTA. They 
would like to buy their medicines from Canada as well. The irony is 
that ag producers who are being forced to sell their products below 
cost are saying, buck it up. You cannot compete in this marketplace.
  Yet, the FDA has, in essence, protected, created a protected market 
for one of the wealthiest industries in this country, in the world, in 
the pharmacy companies here in this country.
  So what the Gutknecht bill basically says is, no, we are not going to 
do that anymore. We are going to try to induce competition by allowing 
people to buy their medications elsewhere.
  The gentleman from Vermont (Mr. Sanders) is absolutely correct. This 
does not just apply to retail. The bill of the gentleman from Minnesota 
(Mr. Gutknecht) basically applies only to retail trade and 
pharmaceutical drugs. It ought to apply to the wholesale as well so 
that our local pharmacists can buy from any distributor anywhere in the 
world.
  Now, the gentleman from Michigan (Mr. Dingell) raised a concern about 
the safety issue. But what we have to realize is that these are the 
exact same formulations that are licensed in the United States. They 
are produced in exactly the same plants as they are that come into the 
United States. They are in the same package.
  I urge my colleagues to support this bill and also support the bill 
of the gentleman from Vermont (Mr. Sanders).
  Mr. BROWN of Ohio. Mr. Speaker, how much time is remaining on each 
side?
  The SPEAKER pro tempore (Mr. Pease). The gentleman from Ohio (Mr. 
Brown) has 4\1/2\ minutes remaining. The gentleman from Oklahoma (Mr. 
Coburn) has 6 minutes remaining.
  Mr. BROWN of Ohio. Mr. Speaker, I reserve the balance of my time.
  Mr. COBURN. Mr. Speaker, I yield myself 2\1/2\ minutes.
  Mr. Speakers, one of the ironic things about today's debate is the 
debate was about whose prescription drug bill would do the problem. We 
had a debate about the wrong problem. The problem is the lack of price 
competition in the pharmaceutical industry. For if prices were not 
rising, seniors would not be screaming, and we would not be addressing 
this issue at all, putting the risk of the Medicare program

[[Page H5433]]

and its viability in the future on the line.
  It is interesting to note that we have a President that is screaming 
for a prescription drug bill, and his own Justice Department will not 
even answer letters requesting an investigation into the antitrust 
activities of the pharmaceutical industry.
  It is interesting to note that politics has reigned supreme in the 
debate about pharmaceutical and Medicare drug benefit when, in fact, we 
can accomplish a limitation on advertising, we can accomplish setting 
in force of motion of the very administrative agencies that are already 
in place to assure the American people that we do not have monopolies 
and we do not have price gouging and we do not have price fixing.
  It is to be noted that the FTC has already received two consent 
decrees from two large pharmaceuticals manufacturers, one of which was 
paying $60 million a year to another pharmaceutical company not to 
bring a drug to market, consequently costing American consumers for 
$250 million for that drug alone. That drug was a calcium channel 
blocker known as diltiazen.
  Another one, Hytrin, used for prostatic hypertrophy and hypertension, 
same thing, $15 million a month paid to another pharmaceutical company 
so they will not bring a drug to market.
  We have collusion, and we have lack of competition. Until we address 
that, we will not be good stewards of the Medicare program. We will not 
be good stewards, whatever drug benefit we offer.
  The other point that I would make, as we have done in every other 
area of Medicare, because we have not been good stewards, we are going 
to cost shift. We are going to lower the prices. Under the Democrat 
plan or the Republican plan, the prices for Medicare seniors will go 
down. But that price, if we do not work on the industry, will cost 
shift to the private sector.
  So we are going to raise taxes on everybody else, their cost of 
health care, to supplant the lack of the proper benefits in Medicare.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 4\1/4\ minutes to the 
gentleman from Pennsylvania (Mr. Klink) who has worked hard for a 
prescription drug benefit for Medicare beneficiaries.
  Mr. KLINK. Mr. Speaker, I would start off by thanking the gentleman 
from Ohio for yielding me the time, even though the hour is late, and I 
would like to compliment the gentleman from Minnesota (Mr. Gutknecht) 
for his bill.
  However, I must rise in opposition to H.R. 3240 because, while it 
seems harmless, and I laud the goal in the end of making sure that we 
can get the most fair price for drugs for all of our senior citizens, 
in fact for all of our citizens, this bill may seem harmless, but it 
could very seriously undercut the Food and Drug Administration's 
ability to warn the public that they are importing something that may 
not, in fact, be real.
  The gentleman from Montana (Mr. Hill) I will tell him I wished I had 
the same surety that he does that these drugs were made in the same 
factory. We have seen with a lot of the investigations that we have 
done that, in fact, we have seen adulterated products. We have seen 
products that are not what they purport to be.
  My colleagues may not realize it, but the Internet has become the new 
frontier for international drug purchases. Anyone with a computer and a 
mouse can click on a site, and one does not even need prescriptions, 
one does not need a doctor's okay, one just gets the drugs, and who 
knows where they are shipped from.
  One recent investigation that we had in the Committee on Commerce of 
Internet pharmaceutical sales shows that buying drugs on-line can 
really be the on-line equivalent of trick-or-treating on Halloween in a 
very dangerous neighborhood. The drugs are often shipped in unmarked 
packages. There are no indications of strength or quality, no way of 
knowing what the products are, no way of knowing where they came from, 
no way of knowing who handled them, where they were stored or even what 
is in them.
  We have seen reports in the news of arrests that were made for 
smuggling in fake Viagra. We have seen accounts of arrests being made 
for selling fake Xenical that was made only from starch and a small 
amount of an antiasthmatic drug. We have seen reports of fake 
ampicillin and AZT made from starch and anti-mold powder.
  How prevalent are these bogus drugs? Well, the fact of the matter is 
we do not know. That is the frightening thing about all of this. Much 
of our investigation has focused on what the Federal Government is 
doing to protect consumers from unknowingly being harmed by something 
they import from one of these rogue sites.
  Now, we have got to remember the Prescription Drug Marketing Act, 
which regulates the import of pharmaceutical products, was enacted in 
response to a lot of problems people had when they unknowingly imported 
drugs that were being adulterated or counterfeit drugs from abroad.
  The gentleman, who had spoken earlier about the importation of food, 
one of the problems that he and I have both had with NAFTA and with 
GATT and with some of these other agreements is that we know that food 
has been brought into this country that was bad.

                              {time}  0020

  We have seen strawberries in Michigan that have caused kids to get 
very sick. We have seen meat products that have come in that have 
caused people to get sick. We have seen vegetables and fruits that come 
in with DDT and other kinds of things sprayed on them that we could not 
get away with here. So we know that the safety of food has been a 
problem, and the safety of drugs has been a problem too.
  I want to get where the author of this bill is trying to get, but I 
do not think this is the way to get there. We want to help the FDA be 
better. They are not perfect. The reality is that this piece of 
legislation, with virtual conveyor belts at every international airport 
coming in, with these drugs being shipped by the Internet, if it were 
just Canada, we could deal with that, because their system is very 
similar to ours. The problem is we are talking about Africa and Asia 
and South America and central America and all of these islands nations. 
These drugs are being set up and manufactured all over the place, and 
some are real, some are not. We do not know what we are getting into.
  What the gentleman is doing here, we are putting unrealistic burdens 
on an FDA that we have found out in the Committee on Commerce that they 
cannot deal with the problem as it is now. They do not have enough 
people to deal with what is coming in now. And the communications 
between the FDA and Customs is horrible, and the public is at risk 
already.
  We cannot make it more at risk. We all want to get senior citizens 
access to cheaper drugs. I have concerns about the potential unintended 
regulatory consequences of this bill. If this bill dealt only with 
imports from countries like Canada, we would not have a problem. I 
think we need to amend the Prescription Drug Marketing Act. I wish we 
that we had had hearings on this bill. I wish we had had a chance to 
talk more about it. I am not prepared tonight to gamble with the safety 
and efficacy of the drugs coming into this country.
  Mr. BROWN of Ohio. Mr. Speaker, I have no further requests for time, 
and I yield back the balance of my time.
  Mr. COBURN. Could I inquire of the Chair the time remaining.
  The CHAIRMAN. The gentleman from Oklahoma (Mr. Coburn) has 3\1/2\ 
minutes remaining.
  Mr. COBURN. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from 
Minnesota (Mr. Gutknecht).
  Mr. GUTKNECHT. Mr. Speaker, first of all, I want to clarify 
something. Section 3 of our bill says including a pharmacist or 
wholesale importer. We want our local pharmacies to be able to set up 
correspondent relationships.
  In terms of the whole issue of people getting bad drugs, I mean, the 
truth of the matter is, this is happening now; and the reason is 
because of these huge differentials. We have tried now for 2 years to 
work with the FDA to come up with a plan so that we can bring down 
these barriers to local pharmacists and HMOs.
  Let me give an example. One of the HMOs in Minneapolis, they did a 
study on their own, and if they could buy their drugs from Winnipeg, if 
they could realize half of the savings that

[[Page H5434]]

they recognized in this study, they could save their subscribers $30 
million a year. Now, they are already negotiating better deals with 
their drugs than the average consumer, certainly the average senior 
citizen can. So what we are talking about is opening up markets.
  We want to work with the FDA, but for 2 years the FDA has basically 
refused to return our phone calls. Mr. Speaker, there is a crisis out 
there; but the crisis is price. I am not here tonight to beat up on the 
pharmaceutical companies. The truth of the matter is they are going to 
charge as much as they can. I mean, shame on the pharmaceutical 
companies, yes, for what they are charging; but shame on the FDA for 
letting them get away with it, and shame on us for not doing something 
about it.
  Now, this bill is not perfect, and I understand that we should be 
going further; but I think that is as far as we can get this year, or 
at least in the next several weeks. As we go forward, perhaps in the 
Senate, perhaps in conference committee, sometime perhaps before we get 
it to the President's desk, maybe we can strengthen it this year. And 
if the FDA does not respond appropriately, I guarantee I will be back 
next year and we will be fighting for even stronger legislation. 
Because this idea that American consumers should pay $30.25 for 
Coumadin when consumers in Switzerland pay $2.85 for the same drug, 
that is simply wrong. And shame on us if we let that continue.
  The time has come to send a very clear message to our own FDA that we 
are not going to allow them to stand between American consumers in the 
day and age of NAFTA, in the day and age of the Internet, and in the 
day and age of the information age. The game is over. We are not going 
to allow them to stand between American consumers, and particularly 
American seniors, and lower drug prices. The game is over.
  This is the night when we begin the journey to bring lower prices to 
American consumers. When we allow markets to work, we will see lower 
prices for American consumers, and especially for American seniors.
  The SPEAKER pro tempore (Mr. Pease). The question is on the motion 
offered by the gentleman from California (Mr. Bilbray) that the House 
suspend the rules and pass the bill, H.R. 3240.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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