[Congressional Record Volume 148, Number 47 (Wednesday, April 24, 2002)]
[Senate]
[Pages S3316-S3319]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself, Mr. Jeffords, Ms. Collins, Ms. 
        Stabenow, Ms. Snowe, Mr. Wellstone, Mr. Levin, and Mr. Dayton):
  S. 2244. A bill to permit commercial importation of prescription 
drugs from Canada, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. DORGAN. Madam President, today I am introducing the Prescription 
Drug Price Parity for Americans Act, along with my colleagues Senators 
Jeffords, Collins, Stabenow, Snowe, Wellstone, Levin, and Dayton. I 
intend to come to the floor later in the week to speak about this 
legislation at greater length, but I wanted to go ahead and introduce 
the bill today.
  This bill addresses a growing problem with prescription drug spending 
in our country. Spending on prescription drugs rose 17 percent in 2001, 
following on the heels of a nearly 19 percent increase in 2000 and a 16 
percent increase in 1999. Unfortunately, many Americans, especially 
senior citizens and the uninsured, cannot afford the substantially 
higher prices that they are being charged for their medicines. A 
prescription drug that costs $1 in the United States costs only 62 
cents in Canada, and that is just not fair.
  The bill I am introducing today would address this unfair pricing by 
injecting some price competition into the prescription drug 
marketplace. This legislation builds on the Medicine Equity and Drug 
Safety, MEDS, Act, which the Senate passed overwhelmingly in 2000 and 
was enacted into law. Like the MEDS Act, this bill would allow U.S.-
licensed pharmacists and drug wholesalers to import FDA-approved 
medicines, but unlike the 2000 law, this year's bill will be limited to 
approved drugs coming only from Canada. Canada has a drug approval and 
distribution system similarly strong to the U.S. system. I am very 
confident that this bill can be implemented immediately while ensuring 
the safety of our Nation's drug supply and significant cost savings for 
American consumers.
  Again, I look forward to coming back to the floor to describe this 
legislation at length at some later opportunity.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2244

       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 ``Prescription Drug Price 
     Parity for Americans Act''.

     SEC. 2. IMPORTATION OF PRESCRIPTION DRUGS.

       (a) In General.--Chapter VIII of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by 
     striking section 804 and inserting the following:

     ``SEC. 804. IMPORTATION OF PRESCRIPTION DRUGS.

       ``(a) Definitions.--In this section:
       ``(1) Importer.--The term `importer' means a pharmacist or 
     wholesaler.
       ``(2) Pharmacist.--The term `pharmacist' means a person 
     licensed by a State to practice pharmacy, including the 
     dispensing and selling of prescription drugs.
       ``(3) Prescription drug.--The term `prescription drug' 
     means a drug subject to section 503(b), other than--
       ``(A) a controlled substance (as defined in section 102 of 
     the Controlled Substances Act (21 U.S.C. 802));
       ``(B) a biological product (as defined in section 351 of 
     the Public Health Service Act (42 U.S.C. 262));
       ``(C) an infused drug (including a peritoneal dialysis 
     solution);

[[Page S3317]]

       ``(D) an intravenously injected drug; or
       ``(E) a drug that is inhaled during surgery.
       ``(4) Qualifying laboratory.--The term `qualifying 
     laboratory' means a laboratory in the United States that has 
     been approved by the Secretary for the purposes of this 
     section.
       ``(5) Wholesaler.--
       ``(A) In general.--The term `wholesaler' means a person 
     licensed as a wholesaler or distributor of prescription drugs 
     in the United States under section 503(e)(2)(A).
       ``(B) Exclusion.--The term `wholesaler' does not include a 
     person authorized to import drugs under section 801(d)(1).
       ``(b) Regulations.--The Secretary, after consultation with 
     the United States Trade Representative and the Commissioner 
     of Customs, shall promulgate regulations permitting 
     pharmacists and wholesalers to import prescription drugs from 
     Canada into the United States.
       ``(c) Limitation.--The regulations under subsection (b) 
     shall--
       ``(1) require that safeguards be in place to ensure that 
     each prescription drug imported under the regulations 
     complies with section 505 (including with respect to being 
     safe and effective for the intended use of the prescription 
     drug), with sections 501 and 502, and with other applicable 
     requirements of this Act;
       ``(2) require that an importer of a prescription drug under 
     the regulations comply with subsections (d)(1) and (e); and
       ``(3) contain any additional provisions determined by the 
     Secretary to be appropriate as a safeguard to protect the 
     public health or as a means to facilitate the importation of 
     prescription drugs.
       ``(d) Information and Records.--
       ``(1) In general.--The regulations under subsection (b) 
     shall require an importer of a prescription drug under 
     subsection (b) to submit to the Secretary the following 
     information and documentation:
       ``(A) The name and quantity of the active ingredient of the 
     prescription drug.
       ``(B) A description of the dosage form of the prescription 
     drug.
       ``(C) The date on which the prescription drug is shipped.
       ``(D) The quantity of the prescription drug that is 
     shipped.
       ``(E) The point of origin and destination of the 
     prescription drug.
       ``(F) The price paid by the importer for the prescription 
     drug.
       ``(G) Documentation from the foreign seller specifying--
       ``(i) the original source of the prescription drug; and
       ``(ii) the quantity of each lot of the prescription drug 
     originally received by the seller from that source.
       ``(H) The lot or control number assigned to the 
     prescription drug by the manufacturer of the prescription 
     drug.
       ``(I) The name, address, telephone number, and professional 
     license number (if any) of the importer.
       ``(J)(i) In the case of a prescription drug that is shipped 
     directly from the first foreign recipient of the prescription 
     drug from the manufacturer:
       ``(I) Documentation demonstrating that the prescription 
     drug was received by the recipient from the manufacturer and 
     subsequently shipped by the first foreign recipient to the 
     importer.
       ``(II) Documentation of the quantity of each lot of the 
     prescription drug received by the first foreign recipient 
     demonstrating that the quantity being imported into the 
     United States is not more than the quantity that was received 
     by the first foreign recipient.
       ``(III)(aa) In the case of an initial imported shipment, 
     documentation demonstrating that each batch of the 
     prescription drug in the shipment was statistically sampled 
     and tested for authenticity and degradation.
       ``(bb) In the case of any subsequent shipment, 
     documentation demonstrating that a statistically valid sample 
     of the shipment was tested for authenticity and degradation.
       ``(ii) In the case of a prescription drug that is not 
     shipped directly from the first foreign recipient of the 
     prescription drug from the manufacturer, documentation 
     demonstrating that each batch in each shipment offered for 
     importation into the United States was statistically sampled 
     and tested for authenticity and degradation.
       ``(K) Certification from the importer or manufacturer of 
     the prescription drug that the prescription drug--
       ``(i) is approved for marketing in the United States; and
       ``(ii) meets all labeling requirements under this Act.
       ``(L) Laboratory records, including complete data derived 
     from all tests necessary to ensure that the prescription drug 
     is in compliance with established specifications and 
     standards.
       ``(M) Documentation demonstrating that the testing required 
     by subparagraphs (J) and (L) was conducted at a qualifying 
     laboratory.
       ``(N) Any other information that the Secretary determines 
     is necessary to ensure the protection of the public health.
       ``(2) Maintenance by the secretary.--The Secretary shall 
     maintain information and documentation submitted under 
     paragraph (1) for such period of time as the Secretary 
     determines to be necessary.
       ``(e) Testing.--The regulations under subsection (b) shall 
     require--
       ``(1) that testing described in subparagraphs (J) and (L) 
     of subsection (d)(1) be conducted by the importer or by the 
     manufacturer of the prescription drug at a qualified 
     laboratory;
       ``(2) if the tests are conducted by the importer--
       ``(A) that information needed to--
       ``(i) authenticate the prescription drug being tested; and
       ``(ii) confirm that the labeling of the prescription drug 
     complies with labeling requirements under this Act;
     be supplied by the manufacturer of the prescription drug to 
     the pharmacist or wholesaler; and
       ``(B) that the information supplied under subparagraph (A) 
     be kept in strict confidence and used only for purposes of 
     testing or otherwise complying with this Act; and
       ``(3) may include such additional provisions as the 
     Secretary determines to be appropriate to provide for the 
     protection of trade secrets and commercial or financial 
     information that is privileged or confidential.
       ``(f) Registration of Foreign Sellers.--Any establishment 
     within Canada engaged in the distribution of a prescription 
     drug that is imported or offered for importation into the 
     United States shall register with the Secretary the name and 
     place of business of the establishment.
       ``(g) Suspension of Importation.--The Secretary shall 
     require that importations of a specific prescription drug or 
     importations by a specific importer under subsection (b) be 
     immediately suspended on discovery of a pattern of 
     importation of the prescription drugs or by the importer that 
     is counterfeit or in violation of any requirement under this 
     section, until an investigation is completed and the 
     Secretary determines that the public is adequately protected 
     from counterfeit and violative prescription drugs being 
     imported under subsection (b).
       ``(h) Approved Labeling.--The manufacturer of a 
     prescription drug shall provide an importer written 
     authorization for the importer to use, at no cost, the 
     approved labeling for the prescription drug.
       ``(i) Prohibition of Discrimination.--
       ``(1) In general.--It shall be unlawful for a manufacturer 
     of a prescription drug to discriminate against, or cause any 
     other person to discriminate against, a pharmacist or 
     wholesaler that purchases or offers to purchase a 
     prescription drug from the manufacturer or from any person 
     that distributes a prescription drug manufactured by the drug 
     manufacturer.
       ``(2) Discrimination.--For the purposes of paragraph (1), a 
     manufacturer of a prescription drug shall be considered to 
     discriminate against a pharmacist or wholesaler if the 
     manufacturer enters into a contract for sale of a 
     prescription drug, places a limit on supply, or employs any 
     other measure, that has the effect of--
       ``(A) providing pharmacists or wholesalers access to 
     prescription drugs on terms or conditions that are less 
     favorable than the terms or conditions provided to a foreign 
     purchaser (other than a charitable or humanitarian 
     organization) of the prescription drug; or
       ``(B) restricting the access of pharmacists or wholesalers 
     to a prescription drug that is permitted to be imported into 
     the United States under this section.
       ``(j) Charitable Contributions.--Notwithstanding any other 
     provision of this section, section 801(d)(1) continues to 
     apply to a prescription drug that is donated or otherwise 
     supplied at no charge by the manufacturer of the drug to a 
     charitable or humanitarian organization (including the United 
     Nations and affiliates) or to a government of a foreign 
     country.
       ``(k) Waiver Authority for Importation by Individuals.--
       ``(1) Declarations.--Congress declares that in the 
     enforcement against individuals of the prohibition of 
     importation of prescription drugs and devices, the Secretary 
     should--
       ``(A) focus enforcement on cases in which the importation 
     by an individual poses a significant threat to public health; 
     and
       ``(B) exercise discretion to permit individuals to make 
     such importations in circumstances in which--
       ``(i) the importation is clearly for personal use; and
       ``(ii) the prescription drug or device imported does not 
     appear to present an unreasonable risk to the individual.
       ``(2) Waiver authority.--
       ``(A) In general.--The Secretary may grant to individuals, 
     by regulation or on a case-by-case basis, a waiver of the 
     prohibition of importation of a prescription drug or device 
     or class of prescription drugs or devices, under such 
     conditions as the Secretary determines to be appropriate.
       ``(B) Guidance on case-by-case waivers.--The Secretary 
     shall publish, and update as necessary, guidance that 
     accurately describes circumstances in which the Secretary 
     will consistently grant waivers on a case-by-case basis under 
     subparagraph (A), so that individuals may know with the 
     greatest practicable degree of certainty whether a particular 
     importation for personal use will be permitted.
       ``(3) Drugs imported from canada.--In particular, the 
     Secretary shall by regulation grant individuals a waiver to 
     permit individuals to import into the United States a 
     prescription drug that--
       ``(A) is imported from a licensed pharmacy for personal use 
     by an individual, not for resale, in quantities that do not 
     exceed a 90-day supply;

[[Page S3318]]

       ``(B) is accompanied by a copy of a valid prescription;
       ``(C) is imported from Canada, from a seller registered 
     with the Secretary;
       ``(D) is a prescription drug approved by the Secretary 
     under chapter V;
       ``(E) is in the form of a final finished dosage that was 
     manufactured in an establishment registered under section 
     510; and
       ``(F) is imported under such other conditions as the 
     Secretary determines to be necessary to ensure public safety.
       ``(l) Studies; Reports.--
       ``(1) By the institute of medicine of the national academy 
     of sciences.--
       ``(A) Study.--
       ``(i) In general.--The Secretary shall request that the 
     Institute of Medicine of the National Academy of Sciences 
     conduct a study of--

       ``(I) importations of prescription drugs made under the 
     regulations under subsection (b); and
       ``(II) information and documentation submitted under 
     subsection (d).

       ``(ii) Requirements.--In conducting the study, the 
     Institute of Medicine shall--

       ``(I) evaluate the compliance of importers with the 
     regulations under subsection (b);
       ``(II) compare the number of shipments under the 
     regulations under subsection (b) during the study period that 
     are determined to be counterfeit, misbranded, or adulterated, 
     and compare that number with the number of shipments made 
     during the study period within the United States that are 
     determined to be counterfeit, misbranded, or adulterated; and
       ``(III) consult with the Secretary, the United States Trade 
     Representative, and the Commissioner of Patents and 
     Trademarks to evaluate the effect of importations under the 
     regulations under subsection (b) on trade and patent rights 
     under Federal law.

       ``(B) Report.--Not later than 2 years after the effective 
     date of the regulations under subsection (b), the Institute 
     of Medicine shall submit to Congress a report describing the 
     findings of the study under subparagraph (A).
       ``(2) By the comptroller general.--
       ``(A) Study.--The Comptroller General of the United States 
     shall conduct a study to determine the effect of this section 
     on the price of prescription drugs sold to consumers at 
     retail.
       ``(B) Report.--Not later than 18 months after the effective 
     date of the regulations under subsection (b), the Comptroller 
     General of the United States shall submit to Congress a 
     report describing the findings of the study under 
     subparagraph (A).
       ``(m) Construction.--Nothing in this section limits the 
     authority of the Secretary relating to the importation of 
     prescription drugs, other than with respect to section 
     801(d)(1) as provided in this section.
       ``(n) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.
       (b) Conforming Amendments.--The Federal Food, Drug, and 
     Cosmetic Act is amended--
       (1) in section 301(aa) (21 U.S.C. 331(aa)), by striking 
     ``covered product in violation of section 804'' and inserting 
     ``prescription drug in violation of section 804'';
       (2) in section 303(a)(6) (21 U.S.C. 333(a)(6), by striking 
     ``covered product pursuant to section 804(a)'' and inserting 
     ``prescription drug under section 804(b)''.

  Mr. WELLSTONE. Madam President, I am glad we have the opportunity 
today to introduce legislation that corrects a sad injustice. This 
injustice makes American consumers the least likely of any in the 
industrialized world to be able to afford drugs manufactured by the 
American pharmaceutical industry. That's because of the unconscionable 
prices the industry charges only here in the United States.
  When I return to Minnesota which I do frequently, I meet with many 
constituents, but none with more compelling stories than senior 
citizens struggling to make ends meet because of the high cost of 
prescription drugs, life-saving drugs that are not covered under the 
Medicare program. Ten or twenty years ago these same senior citizens 
were going to work everyday, in the stores, and factories, and mines in 
Minnesota, earning an honest paycheck, and paying their taxes without 
protest. Now they wonder, how can this government, their government, 
stand by, when the medicines they need are out of reach.
  And it is not just that Medicare won't pay for these drugs. The 
unfairness which Minnesotans feel is exacerbated of course by the high 
cost of prescription drugs here in the United States, the same drugs 
that can be purchased for frequently half the price in Canada. These 
are the exact same drugs, manufactured in the exact same facilities 
with the exact same safety precautions.
  All the legislators speaking today have heard the first-hand stores 
from our constituents back home. Our constituents are justifiably 
frustrated and discouraged when they can't afford to buy prescription 
drugs that are made in the United States, unless they go across the 
border to Canada where those same drugs, manufactured in the same 
facilities are available for about half the price.
  Senior citizens have lost their patience in waiting for answers, and 
so have I. Driving to Canada every few months to buy prescription drugs 
at affordable prices isn't the solution; it's a symptom of how broken 
parts of our health care system are. Americans regardless of political 
party have a fundamental belief in fairness, and we know a rip-off when 
we see one. It is time to end that rip-off.
  While we can be proud of both American scientific research that 
produces new miracle cures and the high standards of safety and 
efficacy that we expect to be followed at the FDA, it is shameful that 
America's most vulnerable citizens, the chronically ill and the 
elderly, are being asked to pay the highest prices in the world here in 
the U.S. for the exact same medicines that are manufactured here but 
sold more cheaply in other countries.
  That is why I am introducing with my colleagues today the Medicine 
Equity and Drug Safety Act of 2002. This bill will amend the Food, 
Drug, and Cosmetic Act to allow American pharmacists and wholesalers to 
import prescription drugs from Canada into the United States, as long 
as the drugs meet FDA's strict safety standards. Pharmacists 
and wholesalers will be able to purchase these drugs, often 
manufactured right here in the U.S., at much lower prices and then pass 
those savings on to consumers. In addition, the bill would give 
individuals a waiver to import prescription drugs from Canada as long 
as the medicine is for their own personal use and the amount of 
medicine imported is a 90-day supply or less. This provision will give 
consumers confidence that, if they follow the rules for personal 
importation, they won't have to worry about their medicines being 
stopped at the border.

  Our bill addresses the absurd situation by which American consumers 
are paying substantially higher prices for their prescription drugs 
than are the citizens of Canada. The bill does not create any new 
Federal programs. Instead, it uses principles frequently cited in both 
houses of the Congress, principles of free trade and competition, the 
help make it possible for American consumers to purchase the 
prescription drugs they need.
  And the need is clear. A recent informal survey by the Minnesota 
Senior Federation on the price of six commonly used prescription 
medications showed that Minnesota consumers pay, on average, nearly 
double, 196 percent, what their Canadian counterparts pay. These 
excessive prices apply to drugs manufactured by U.S. pharmaceutical 
firms, the same drugs that are sold in Canada for a fraction of the 
U.S. price.
  Pharmacists could sell prescription drugs for less here in the United 
States, if they could buy and import these same drugs from Canada at 
lower prices than the pharmaceutical companies charge here.
  Now, however, Federal law allows only the manufacturer of a drug to 
import it into the U.S. Thus American pharmacists and wholesalers must 
pay the exorbitant prices charged by the pharmaceutical industry in the 
U.S. market and pass along those high prices to consumers. It is time 
to stop protecting the pharmaceutical industry's outrageous profits, 
and they are outrageous.
  Let's take a look at the numbers, so there can be no mistake:
  Where the average Fortune 500 industry in the United States returned 
2.2 percent profits as a percentage of revenue, the pharmaceutical 
industry returned 18.5 percent.
  Where the average Fortune 500 industry returned 2.5 percent profits 
as a percentage of their assets, the pharmaceutical industry returned 
16.5 percent.
  Where the average Fortune 500 industry returned less than 10 percent 
profits as a percentage of shareholders equity, the pharmaceutical 
industry returned 33.2 percent.
  Those huge profits are no surprise to America's senior citizens 
because they know where those profits come from, they come from their 
own pocketbooks. It is time to end the price gouging.
  We need legislation that can assure our senior citizens and all 
Americans

[[Page S3319]]

that safe and affordable prescription medications at last will be as 
available in the United States of America as they are in Canada. The 
bill we are introducing today accomplishes that end.
  I also want to point out that our bill includes important safety 
precautions to make sure we are not sacrificing safety for price. The 
safety measures provide strong protection for the American public. 
These protections include: Strict FDA oversight; importation from 
Canada only; strict handling requirements for importers, like those 
already in place for manufacturers; registration of Canadian 
pharmacists and wholesalers with the HHS Secretary; lab testing to 
screen out counterfeits; lab testing to ensure purity, potency, and 
safety of medications and; authority for the HHS Secretary to 
immediately suspend importation of prescription drugs that appear 
counterfeit or otherwise violate the law.
  The only thing that is not protected in this bill is the excessive 
profits of the pharmaceutical industry. My job as a United States 
Senator is not to protect profits but to protect the people. 
Colleagues, please join us and support this thoughtful and important 
bill that will help make prescription drugs affordable to the American 
people.

                          ____________________