Congressional Record, Volume 148 Issue 97 (Wednesday, July 17, 2002)

[Congressional Record Volume 148, Number 97 (Wednesday, July 17, 2002)]
[Senate]
[Pages S6898-S6906]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001--Continued

The PRESIDING OFFICER. Who yields time?
The Senator from Michigan.
Mrs. STABENOW. I thank the Chair, I yield myself up to 15 minutes
under the agreement.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. STABENOW. Madam President, this is a very important second-degree
amendment that not only will help our seniors be able to lower the
prices they pay for prescription drugs, as my colleagues have said. I
thank the Senator from Minnesota for his ongoing leadership on this
issue and, of course, the Senator from North Dakota for his sponsorship
and ongoing leadership and advocacy, as well as my other colleagues who
are cosponsoring this amendment.
This not only affects our seniors, this affects everyone. It affects
the president of Michigan State University, who called me about his
health clinics and his college of medicine looking for ways to be able
to lower prices so that he does not have to deal with possibly laying
off more staff, which he had to do this year as a result of the
dramatic increases in the health care costs at the university.
It addresses the big three automakers, small businesses, families,
and everyone who is paying exorbitant prices for prescription drugs.
I want to start by quoting our President, President Bush, when he was
a candidate for President. He indicated that he thought this idea was a
good idea. He said:

Allowing the new bill that was passed in the Congress made
sense to allow for, you know, drugs that were sold overseas
to come back and other countries to come back into the United
States.
That was what then-candidate George W. Bush and now President Bush
said makes sense. It does make sense. It made sense before. The problem
before was that there was an amendment added which basically killed our
ability to be able to do this. We know that same amendment which is
supported by the pharmaceutical industry will be offered later. There
will be an attempt to kill it again.
But we are hopeful that our colleagues will join with us in what is a
very reasonable proposal that addresses any legitimate issues regarding
safety and health and allow us to open the border to Canada and be able
to provide the kind of competition we need to lower prices.
I think it is important also to reiterate that at a September 5,
2001, hearing before the Senate Commerce Committee's Subcommittee on
Consumer Affairs, William Hubbard, FDA Senior Associate Commissioner,
testified:

I think as a potential patient, were I to be ill and
purchase a drug from Canada, I would have a relatively high
degree of confidence in Canadian drugs.

We know the Canadian system is similar to ours as it relates to the
regulatory and safety system.
We feel very confident that this modest proposal of simply opening
the border to Canada--and we know that Canada right now exchanges goods
and services with us every single day. We have the largest port of
entry in Detroit, MI, which I am proud to represent, with over $1
billion in goods going across. We trade every day with them.
We believe this proposal will allow one thing to be traded which is
desperately needed by our citizens and is not now allowed to go back
and forth across that port of entry. It makes sense. This is a
reasonable, modest proposal.
Instead of opening all of our borders, some would argue that this
does not go far enough; that we should open to Mexico, Europe, or other
places around the world. But we are taking a modest step to begin to
show that this kind of approach can work.
We want to simply start with Canada with a very modest approach that
will allow us to be able to share with our neighbors to the north the
ability to bring back to our citizens American-made prescription drugs
which are sold in Canada.
I think this is an issue of fairness as well because we are talking
about prescription drugs on which we helped to underwrite research. As
I have said so many times, $23.5 billion this year alone was given by
the taxpayers of this country. And I support that strongly. I support
having that be a higher number. I think basic research into new
potential treatments is absolutely critical and is a good investment.
But we are making those investments. We are then giving that
information to the drug companies, that pick up the information and
then proceed to do their own research and development.
We allow tax writeoffs for that research and development, tax
credits, and tax reductions. We subsidize them further. We allow up to
20-year patents so they can recover their costs because we know it
costs a lot to research and develop new drugs. So we let them be able
to recover those costs without competition for their name brand. So we
highly subsidize--highly subsidize--this area; the most profitable
industry in the world, highly subsidized by American taxpayers.

[[Page S6899]]

Then what do we get at the end of that process? The highest prices in
the world. One of the reasons is we close the borders to competition.
And we are subsidizing heavily all of the research and development of
new medications that the Canadians enjoy, that people around the world
enjoy, while we in fact pay the highest prices in the world.
I have had an opportunity to take a number of bus trips to Canada;
the latest was on June 10 of this year. I will just share with you some
of the differences. My colleagues have talked about that as well. But
it is shocking to take a mere 5-minute bus trip across a bridge or
through a tunnel and see the dramatic differences in prices.
I might add, I am not interested in continuing to put people on buses
or in cars to have to go over to Canada to get those lower priced
medications. What we want is the ability to bring them back, so that
the neighborhood pharmacy can offer these same kinds of prices. That is
what this is all about, to bring them back and place them in the local
pharmacy.
But it is shocking when we look at the differences. Zoloft is an
antidepressant drug. In Michigan, it costs $220.65 for a monthly
supply; in Canada, $129.05. So it is $220 versus $129. That difference
can buy food, pay the electric bill, pay the rent, it can be the
difference between someone having a quality of life that makes sense
and one that involves struggling every day to pay for their
medications.
We also know one of the most dramatic differences is tamoxifen, which
I have spoken about here before. Tamoxifen is a breast cancer treatment
drug. When we went to Canada, we were able to get it for $15. And back
in Michigan it is $136.50.
If you have breast cancer and you are struggling to pay for your
medications to get the treatments you need to deal with all of the
other issues in your life as well, the difference between $15 and $136
a month is a big deal. That is why this amendment is a big deal. I hope
our colleagues will join overwhelmingly in our amendment--which is, in
fact, a bipartisan amendment, a tripartisan amendment--to say: Yes, it
is time to be fair to Americans.
This is about fairness for Americans. It is about competition. It is
about opening the border in a way that maintains safety for our
citizens.
I would like to speak to a couple of the arguments that I know we
will hear from colleagues who are opposing this amendment and what the
drug companies have said.
The drug companies have said that bringing those prescription drugs
back from Canada is not safe. For the record, drugs are already
frequently imported into this country, but predominantly by the
companies themselves, by manufacturers.
I also note that individual consumers now are allowed to bring back
up to a 90-day supply. Because of the concerns that have been raised,
they have looked the other way at the FDA and allow people, for
personal use, to bring back up to a 90-day supply.
In fact, according to the International Trade Commission, $14.7
billion in drugs were imported into the United States in the year 2000,
and $2.2 billion in drugs sold in Canada were originally made in the
United States.
So it is ironic that the drug makers are saying that drugs cannot
safely move between the borders of the two countries. They do already.
The issue is price. The issue is who controls them moving back and
forth. When the companies want to move them back and forth, they think
it is fine. When the pharmacists want to move them back and forth or
individuals want to move them back and forth and get a lower price, it
is not fine. They are the same medications. It is a question of who
controls them.
In fact, in recent years the FDA has allowed thousands of American
consumers to import from Canada medications for their personal use
every year. The FDA Senior Associate Commissioner, as I said before,
indicated that as a consumer he would have a relatively high degree of
confidence in drugs purchased from Canada. So these arguments do not
make sense. The arguments we will hear about safety do not make sense.
We will hear that safety standards in Canada are more lax than here
in the United States. There was a September 2001 report by the
nonpartisan Congressional Research Service--which we all use--which
confirms that the United States and Canadian systems for drug approval,
manufacturing, labeling, and distribution are similarly strong in all
respects. Both countries have similar requirements and processing for
reviewing and improving pharmaceuticals, including ensuring compliance
with good manufacturing practices.
Both countries also maintain ``closed drug distribution systems''
under which wholesalers and pharmacists are licensed and inspected by
Federal and/or local governments. All prescription drugs shipped in
Canada must, by law, include the name and address of each company
involved along with the chain of distribution.
Let me finally address one of the other myths I am sure we will hear
more about today, and that is that somehow our bill will allow Canada
to become a conduit for counterfeit or contaminated drugs into the
United States.
On the contrary, this bill provides for safe protections, many of
which are not in current law. We go beyond current law, which we all
know needs to be done now as we look at so many areas of homeland
security.
We have gone beyond what is currently in place. If implemented, this
bill would have the potential to decrease, more than today, the
possibility of allowing counterfeit drugs into the United States.
We would provide there be strict FDA oversight, proof of FDA approval
of imported medicines. There must be a paper chain of custody, which is
important. Only licensed pharmacists and wholesalers would be able to
import medications for resale. They would have to meet requirements for
handling as strict as those in place by the manufacturers--equally
strict as what the manufacturers do today.
There will be lab testing to screen out counterfeits, registration
with Canadian pharmacists and wholesalers by HHS. There will be lab
testing to ensure purity, potency, and safety of medications.
We also say that the Secretary of Health and Human Services can
immediately suspend this provision, immediately suspend the importation
of prescription medicines that appear to be counterfeit or otherwise
violate the law.
We have made it very clear that they can immediately suspend ``on
discovery of a pattern of importation of the prescription drugs or by
the importer that it is counterfeit or in violation of any requirement
under this section or poses an additional risk to the public health''--
they can immediately suspend.
This is a responsible provision. It is a moderate provision. It opens
the border to a country that we trade with every day, whose system is
similar to ours. It allows actions if in fact anything is found to
create a threat to Americans in terms of our health and safety. It
allows immediate action and suspension of this new provision.
I believe we have put into place something that is reasonable. It is
logical. It is long overdue. I am hopeful that we will have a strong
bipartisan vote.
If we want to lower the prices immediately, without much, if any,
expenditure of taxpayers' dollars--if we want to do it immediately--all
we have to do is drop the barrier at the border to Canada.
I urge my colleagues to join us.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Madam President, I yield myself 5 minutes.
The Dorgan amendment before the Senate has enormous potential to make
more prescription drugs more affordable for more people. The amendment
is particularly important for our seniors, most of whom live on fixed
incomes and constantly have to decide whether they can afford to fill
those prescriptions.
We have a bizarre situation. We manufacture drugs in America, but
they are sold at cheaper prices in other countries. Just a few
examples: Brand name drugs cost an average of 31 percent less in the
United Kingdom than they do in the United States; 35 percent less in
Germany; 38 percent less in Canada; 45 percent less in France; 48
percent less in Italy. The General Accounting Office has studied 121
drugs

[[Page S6900]]

and found that on average prescription drugs in the United States are
priced 34 percent higher than the exact same products in Canada.
I travel around Michigan, and I listen to the stories of citizens who
are trying to pay for expensive prescriptions and wonder why their
neighbors in Canada, just a few miles away, are able to buy the exact
same drug, manufactured in America, often for half the price.
We conducted a survey this last February of two of the most commonly
prescribed prescription drugs. In every case, the prescription in
Canada cost significantly less than the same drug in Michigan. For
example, we looked at a number of pharmacies on both sides of the
border. A 1-month supply of Prilosec, a gastrointestinal drug, costs
about $126 in Michigan but only $71 in Canada. Similarly, a 1-month
supply of Lipitor, a cholesterol-lowering drug, costs $74 in Michigan
but $41 in Canada.
As a result of these enormous price disparities, we have the
spectacle of American citizens, mostly seniors, going into Canada by
the busload to buy American-made prescription drugs at a fraction of
what they have to pay here. It is absurd. It is unconscionable that we
give pharmaceutical manufacturers tax breaks and direct grants to bring
new drugs to the market, and then those drugs cost more in America,
where they are made, than they do in other countries. We subsidize the
drug costs for the rest of the planet, and that has to change.
The Dorgan amendment fixes this problem in two fundamental ways:
First, the amendment allows U.S. licensed pharmacists and drug
wholesalers to import FDA-approved medications from Canada. Second, the
amendment would allow individuals to import prescription drugs from
Canada as long as the medicine is for their own personal use, as
evidenced by a prescription, and is a 90-day supply or less.
These provisions will allow American citizens, through the
appropriate channels, to take advantage of lower prescription drug
prices in Canada.
According to a Boston University School of Public Health study, drug
reimportation, just from Canada, could have saved consumers $38 billion
in the year 2001, an enormous sum.
In the year 2000, the Senate approved strikingly similar legislation
by a strong bipartisan vote of 74 to 21. Unfortunately, a technical
amendment blocked implementation of the legislation. Now the Senate can
act again to bring lower priced prescription drugs to people who
desperately need them. We can act to bring in some competition. We can
act to bring in some free trade. American scientific know-how has led
to the development of hundreds of lifesaving and life-enhancing
prescription drugs.
Some of the newer prescription drugs are modern-day medical miracles
which help millions of Americans lead healthy lives well into their
golden years.
These drugs won't do any good if people can't afford them. It is that
simple and that demanding.
I hope our colleagues will support the Dorgan amendment and allow for
the reimportation of prescription drugs.
I yield the floor.
The PRESIDING OFFICER. Who yields time? The Senator from Tennessee.
Mr. FRIST. Madam President, I yield myself 20 minutes to speak in
opposition to the amendment.
The PRESIDING OFFICER. From whose time?
Mr. COCHRAN. The time should be charged to that under the control of
Senator Gregg. He has asked me, as his designee, to yield.
The PRESIDING OFFICER. The Senator is recognized.
Mr. FRIST. Madam President, I rise to address the issue introduced in
the last hour and a half; that is, the issue of reimportation of drugs,
especially as it affects the safety of the American people. They have
been introduced by the proponents of this legislation as myths. By
calling them myths, it is as if in some way we should say they are
myths. They are not real, therefore, let's proceed down this path.
I want to give a little bit of historical perspective to these so-
called myths and explain to my colleagues why I believe they are not
myths but reality. The potential of such reality can result in direct
harm as we look at public health and safety.
I look forward to the afternoon because the debate will continue. The
debate ultimately will start with cost and buses running back and forth
to Canada. Then Senators will say that this idea is appealing and
critically important to pass so we can lower the cost of prescription
drugs. We are all for lowering prescription drugs costs. Prescription
drugs cost too much; they are out of reach today for too many people.
The focus is on cost. It is motivating and a driving force because it
is something on which we all agree. Prescription drugs costs too much
today--the rate of increase is too much. But to focus on cost without
focusing on public health and safety is wrong and irresponsible.
If we look at the legislative history of the consideration of
reimportation of drugs and pharmaceutical agents from other parts of
the world outside of the borders of the United States to this country,
we have a lot to learn. It is a rich history in terms of lessons
learned.
I will not focus on the cost issue, but let me just dismiss the cost
issue in terms of my comments now by saying there is no evidence that
this amendment will guarantee price savings. For seniors, individuals
with disabilities, or the American people who are listening today,
there is no evidence to indicate this. It is pretty dramatic, holding
up two bottles and saying one comes from another country and one from
the here. The assumption is that it will reduce the cost of
prescription drugs in the United States, however, that evidence is not
there.
What I want to focus on--and I think it is even worse than not being
able to make that assurance to the American people--is my concern with
health.
From July 1985 to June 1987, nine hearings were held and three
investigative reports issued regarding the issue of reimportation of
pharmaceuticals. These efforts, over that time, led to the enactment of
the Prescription Drug Marketing Act of 1987. That law was specifically
designed to protect America's health and safety against the risks of
drugs that in some way may have been altered or counterfeit imported
medicines.
The act, a product of the debate at that time, found among other
things, ``a significant volume of pharmaceuticals are being reimported.
These goods present a health and safety risk to American consumers
because they may become subpotent or adulterated during foreign
handling and shipping.''
The overall purpose of the Prescription Drug Marketing Act of 1987
was to ``to decrease the risk of counterfeit, adulterated, misbranded,
subpotent or expired prescription drugs reaching the American public.''
In the Committee report which accompanied the Prescription Drug
Marketing Act, the Commerce Committee concluded:

Reimported pharmaceuticals threaten the American public
health in two ways. First, foreign counterfeits, falsely
described as reimported U.S.-produced drugs, have entered the
distribution system. Second, proper storage and handling of
legitimate pharmaceuticals cannot be guaranteed by U.S. law
once the drugs have left the boundaries of the United States.

I mentioned the history because it is incumbent upon us--as we look
at this legislation and change, modify, defeat, pass, improve,
strengthen this legislation--that we have to address the issues that
were so prominently raised at that time. That was from 1985 to 1987. At
that time, we did not have nearly as many cost concerns as we do today.
In 2000, as was mentioned on the floor, Congress revisited the issue
and passed at that time the Medicine Equity and Drug Safety Act. This
act allowed reimportation of prescription drugs if the Secretary of
Health and Human Services could guarantee the safety and certify that
cost savings would result. Safety and cost savings, again, are two
issues that remain current today. We want to bring down the cost of
prescription drugs, but we certainly do not want to do it if it is
going to hurt the American people.
Since that time, two Secretaries of Health and Human Services--of two
administrations--have stated that the Food and Drug Administration
cannot guarantee the safety of reimported prescription drugs.
In fact, then-Secretary Shalala called it ``impossible . . . to
demonstrate that [reimportation] is safe

[[Page S6901]]

and cost effective.'' Let us jump to the next administration.
Secretary Thompson also concluded that reimportation would ``pose a
greater public health risk than we face today and a loss of confidence
by Americans in the safety of our drug supply.''
Those were Secretaries of Health and Human Services and their overall
approach in reimportation.
Let us now turn to the Commissioners of the FDA. When FDA Deputy
Commissioner Lester Crawford was asked to comment on ``whether
reimportation (from Canada) now raises greater challenges than it did
previously''--meaning prior to September 11--and ``what is your view as
it relates to safety as it relates to drugs for the consuming
Americans,'' Deputy Commissioner Lester Crawford replied, ``The problem
would be if it becomes apparent to the rest of the world, including the
world of terrorists that we are not interdicting shipments of drugs
that come from Canada. . . . I think this is a signal to a would-be
terrorist that this might be a way to enter the United States. . . . It
also would be a signal to a community that it is not as dangerous as
terrorists obviously, but to the transshippers and these would-be
people in various countries that may not have a regulatory system or
may not have a regulatory system for exported drugs. . . .
I think the important issue is that we are in a new world, compared
even to 2 years ago, and that it is incumbent upon us to address this
whole idea of having drugs produced or imported or reimported from
outside our boundaries at the same time we are trying to strengthen our
boundaries in terms of what comes into this country. How careful can we
be, how assured can we be that a product is not counterfeit, has not
been adulterated, or is not the product of somebody who has ill intent
against America. At the same time, we are working to make the borders
less porous and tightly overseen, we want to make our borders more
porous when it comes to chemical and pharmaceutical agents.
Former FDA Commissioner, Dr. Jane Henney, expressed
severe reservations regarding the importation of drugs. This is from a
different administration than the current one. Dr. Henney said:

The trackability of a drug is more than in question. Where
did the bulk product come from? How is it manufactured?
You're just putting yourself at increased risk when you don't
know all of these things.

Let us go back to another FDA Commissioner. Remember, the FDA
Commissioners are those people who we have, as a nation, given the
responsibility of overseeing the public's health and safety of food and
drugs. Dr. David Kessler, former head of FDA, stated:

In my view, the dangers of allowing reimportation of
prescription drugs may be even greater today than they were
in 1986. For example, with the rise of Internet pharmacies,
the opportunities of illicit distribution of adulterated and
counterfeit products have grown well beyond those available
in prior years.

That is David Kessler, former head of FDA. He continues:

Repealing the prohibition on reimportation of drugs would
remove one of the principal statutory tools for dealing with
this growing issue.

Let us look back to an FDA Commissioner from the Carter
administration, Dr. Jere Goyan, who said it best. This is FDA
Commissioner Goyan:

I respect the motivation of the Members of Congress who
support this legislation. They are reading, as I am, stories
about the high prescription drug prices and people which are
unable to pay for the drugs they need. But the solution to
this problem lies in better insurance coverage for people who
need prescription drugs, not in threatening the quality of
medicines for us all.

It is important because, again, in our urge to bring down the cost of
prescription drugs and restrain that skyrocketing of costs, we do not
want to put drugs out of the reach of the American people. We do not
want to do that unintentionally.
Given the statements of the FDA Commissioners and the Secretaries of
Health and Human Services, we do not want to open the door and increase
the risk to the public health.
Last fall the FDA affirmed its concern about the safety of reimported
drugs--even those from Canada, and I understand the underlying
amendment is focusing on one country--stating they could not even
provide safety assurances for those drugs entering the Nation over our
northern border. The FDA further noted that reimported drugs ``pose
considerable risks to consumers because they may be counterfeit,
expired, superpotent, subpotent, simply tainted, or mislabeled.''
I point this out early in the debate and want to turn to other people
and to the other side, who say: Yes, our amendments are written with
more safeguards in the pieces of legislation that come forward. I think
that needs to be debated. Ultimately, the safety issue is the key issue
in addressing this legislation as we shape it and vote for or against
it.
I fear that, in spite of the proponents' attempts in the underlying
amendment to establish a mechanism to assure safety--and it is fairly
elaborate--a lack of success, lack of assurance of having these safety
mechanisms, at the end of the day, puts at risk the American people.
This is all in the interest of bringing down the cost of prescription
drugs, which is something that we agree with, but there are better and
more direct mechanisms to deal with that issue of cost.
We see an elaborate set of safety mechanisms that I think are
impossible to implement, which wholesalers and pharmacists are not
equipped to handle and, more importantly, mechanisms that only
ultimately add--and nobody talks about it--to the cost of prescription
drugs. Regardless of whether a pharmaceutical is originally
manufactured here in the United States, once a drug leaves this country
and crosses borders, I believe it is impossible to ensure that it is
properly handled. It is out of our reach and our vision. We can sort of
pass the laws and pass regulations, but in truth, we are not going to
see it.
It is impossible to guarantee how it is handled, stored, at what
temperature it is stored, and whether it is safe for eventual use.
Most people know--we have talked about this in the Chamber of this
body--it is very important how drugs are stored, at what temperature,
and their potency. In fact, certain drugs that are used in a routine
way, if improperly handled, can become lethal if mishandled in being
brought back into this country.
Even more hazardous to the health of Americans is counterfeit
medicines. I mentioned terrorism, and I do not want to overstate that,
but again, we are currently working very hard to fight issues such as
bioterrorism. We are working hard to make sure we are able to track and
regulate contents of agents that can be used against us. I do not think
we should be moving in the direction of opening those borders broadly
when I contend it is impossible, or next to impossible, to guarantee
their safety.
There is one interesting example. Gentamicin sulfate is a
prescription medicine to treat people with resistant infections,
abdominal infections, and people who are very ill. Several years ago,
FDA reported that this drug resulted in 17 deaths and 202 serious
reactions. This drug is a very powerful drug, a very good drug, and one
of the best antibiotics out there when used in a targeted, specific
way.
Ultimately, it was no surprise to later find that the medicines
causing these 17 deaths were being imported from another country. It
was not Canada. It happened to be China. Both the current and former
leaders of the FDA have made it ultimately clear, really crystal clear,
that they will have a tough time establishing mechanisms that are
sufficiently elaborate, complex, and detailed enough to ensure
pharmaceuticals coming into this country from foreign manufacturers are
safe to use.
The underlying amendment purports to address drug safety by only
allowing U.S.-approved drugs to be reimported and incorporating a drug
testing requirement. Again, it sounds very good, but let me state up-
front--and we can debate it as the day goes on--end product testing,
after a drug has traveled and handled in certain ways, simply is not
adequate. End product testing is not adequate to demonstrate that a
drug was manufactured in accordance with U.S.-approved standard and
quality requirements.
Also, testing at the moment of import, at the time it actually comes
into the country, does not ensure the integrity of the drug throughout
its shelf

[[Page S6902]]

life once it arrives here. Drugs are fluid agents. They are agents that
can be adulterated. They can be changed, and, as I mentioned, their
storage is critically important.
I will close mentioning this whole danger of counterfeiting drugs
because, again, in this environment post-September 11, it is one we
need to look at. We need to address this issue up-front. It is the new
environment in which we are working. In that regard, I am hopeful we
can address this amendment to make absolutely sure we have safe drugs
for the American people. We need to make sure that we have not opened
the door at the same time we are putting interest in lowering costs and
reducing costs over time, opened the door, opened our borders, or made
them more porous in a way that ultimately will hurt the American
people.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. How much time remains on each side?
The PRESIDING OFFICER. The Senator from North Dakota controls 21
minutes; and the Senator from Mississippi controls 25 minutes.
Mr. DORGAN. Madam President, I yield 8 minutes to the Senator from
Massachusetts.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I thank the Senator from North Dakota
for bringing this matter to the attention of the Senate. I am very
hopeful it will be accepted in the Senate in a short time. There are
some interesting underlying facts. What we are finding now has been
referenced during the course of this debate. The United States and its
taxpayers are subsidizing the world in terms of prescription drugs.
That happens to be a fact.
The research for brand and generic drugs is basically now conducted
in the United States. They have moved dramatically from Europe over the
recent years. With the doubling of the NIH budget, much of that is
funding basic research which is essential for the development of drugs.
So the taxpayer is paying for the funding of the NIH and then paying
the additional costs at home. Furthermore, these drugs are a good deal
cheaper outside the United States.
We are doing for the rest of the world in the area of prescription
drugs what we are doing for our national security. We keep the Straits
of Malacca open, the Suez Canal open, and the Panama Canal open. The
great choke points of the world are free because of the U.S. Navy and
that is the way it is. We wish that it could be better. There are
things that could be done and should be done in this area. Nonetheless,
that is the case. That is one issue, if we are able to have prices that
are reasonable for the American consumer, but we do not have that. One
of the principal efforts of what we are discussing in the Senate is
taking steps to assure those families who are in need of prescription
drugs that they are going to have access to them.
We have an underlying bill that will make a very important
difference. The Dorgan amendment, cosponsored by our Democrat and
Republican colleagues, can make an important contribution to that as
well, and we will have follow-on amendments.
Rightfully, it has been identified that safety is a key issue.
However, we are talking about drugs that are FDA approved and produced
in plants that have FDA inspections. Many of the safety issues raised
in Secretary Shalala's letter some years ago in criticism of a much
broader amendment by the Senator from North Dakota have been addressed
in this legislation. The safety issues that have been addressed
included the counterfeiting, the proliferation of handling, and a wide
range of other issues. They have been addressed in a very serious and
responsible way.
We are doing this against a background where we are free, thank
goodness, of examples or incidents where there has been contamination
of drugs imported from Canada. That has not been true in terms of
Mexico and other countries, but it certainly has been true with Canada.
This is a very modest program, but it is an important one. It is a
vital program certainly for millions of our citizens who live in or
around the northern tier States. It has caught on because of the
frustration of our fellow citizens. And it is a legitimate frustration
because of the fact that we in the Congress have not taken steps to
assure that the generic drugs or that brand-name drugs are going to be
sold at a more reasonable cost. It is out of frustration for that.
I do not hear those supporting this proposal saying they are in
strong support of the underlying proposal that will make the
availability of drugs less expensive for the consumer, or other means
as well. It is a question of the cumulative effect. This is targeted to
Canada, where we have high regard and respect for their system of
handling these ingredients.
I think the issues which have been outlined and detailed expressing
reservations about this proposal, certainly with regard to Secretary
Shalala, and to a significant extent Secretary Thompson, have been
addressed by the Dorgan amendment. This will be a measured but very
constructive and important step in assuring that some of our citizens
get vitally needed drugs.
As the Senator from North Dakota has pointed out, the fact is that if
people are not able to get drugs at all because they cannot afford
them, they are willing to take some risks to be able to get them. That
is what this is about. We cannot make the excellent the enemy of the
good.
The opportunity for getting good quality drugs at reasonable prices
will make a difference, as the Senator has pointed out with his
examples of individuals with cancer who otherwise would not be able to
afford any of the higher-priced drugs. So with all the inevitable
health hazards that they are facing, it is either these drugs or no
drugs.
This is a measured step. It is one that is eminently worthwhile. I
commend my colleague for offering it, and hopefully it will be
accepted.
The PRESIDING OFFICER. Who yields time?
Mr. DORGAN. Madam President, how much time remains?
The PRESIDING OFFICER. The Senator from North Dakota has 14\1/2\
minutes.
Mr. DORGAN. Do we know with respect to those who are yielding time to
the opponents of this legislation, or at least yielding time on behalf
of Senator Gregg, whether they will be using their time at this point?
The PRESIDING OFFICER. The Senator from Mississippi has 25 minutes.
Mr. COCHRAN. Madam President, we are happy to abide by the unanimous
consent agreement which calls for a vote at 2:30. We have an indication
that there are Senators who want to talk. I will speak on the subject.
We already have had remarks by Senator Frist on this subject.
Mr. DORGAN. Madam President, as the Senator who offered the
amendment, I reserve some time to close debate.
I yield 5 minutes to the Senator from Michigan.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Madam President, I thank my colleague from North
Dakota, who has worked so hard on this legislation and has done such a
wonderful job of crafting what is a very reasonable and modest
approach.
I did want to respond to comments that had been made a little while
ago to emphasize again that this is a different proposal than was
brought before the Congress before it was passed. It is limited to
Canada where we know there is a very similar safety regulatory
structure. We are trading back and forth. Our manufacturers of
prescription drugs go back and forth across the border all the time.
The only difference is they control the prices, as opposed to giving
consumers the ability to have lower prices. So this is a different
system. This is a system that sets up a number of protections, in fact
more protections than we have in current law.
So this is actually strengthening, and given the current times that
we are in, that makes sense. It makes sense to limit this to Canada as
a way to begin this process and see how it works, and it makes sense to
add all the safety provisions that are put in. It also makes sense to
allow the Secretary of Health and Human Services to have the power to
immediately stop reimportation if, in fact, there is a

[[Page S6903]]

problem. If there is a safety problem, if there is a health problem, if
there is a concern at all about counterfeit drugs, then the Secretary
has the ability, based on the evidence, to be able to stop this
process.
So I believe we have built in a number of provisions that are very
important, that are very responsible, and I believe this plan should go
forward.
My colleague from Tennessee also said that there is no evidence we
will see prices lowered or that we will see the lower prices passed on.
First, I would absolutely say what we do know. There is great evidence
that in fact our seniors--in fact everyone--are going to be paying
higher prescription drug prices every year. We do know that. We do know
in the last year, the brand name companies raised the prices over three
times the rate of inflation. We do know that. We do know there is an
explosion in advertising, two and a half times more in advertising,
than research. We know there is in fact an explosion in prices going on
in this country. We do know that our families are desperate, that our
seniors are desperate, and many have drug bills that are higher than
their incomes; families struggling to help mom and dad, grandma and
grandpa.
We do know our small businesses are struggling to provide health care
for themselves and their employees. We do know too many workers find
themselves in a situation where their employer says: We have to have a
pay freeze in order to be able to afford your health care benefits.
We know that is predominately because of the rising prices of
prescription drugs.
So even if one thinks this is not the best proposal in the world, it
is better than what is occurring today for American consumers, for
American families, American seniors. I am very confident, in talking to
pharmacists, community pharmacists, those who are on the front lines
around this country, that they would welcome the ability to have a
lower cost product brought into their pharmacies so they can offer it
to American citizens.
They are on the front lines. They see the senior that walks up, gives
the prescription for a 30-day supply of a drug, and then looks at the
bill and comes back and says: Can I get one week's supply or I cannot
get this at all. Or they take it home and they cut the pills in half. I
have known couples who both needed the same heart medicine. They buy
one and share it. We all know the stories.
I know that pharmacists in our neighborhood pharmacies are very much
in support of efforts to bring in lower priced prescription drugs. One
way to do that is by opening the border to Canada.
So I would simply rise to, again, voice strong support and my
pleasure at being a cosponsor of this amendment, having worked on this
issue for a number of years. I urge my colleagues to get beyond the
scare tactics and to support us in this reasonable, moderate effort to
add competition and lower prices for our citizens.
I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Madam President, as the designee of Senator Gregg, I
yield myself such time as I may consume.
To refresh the memory of Senators on this subject and the fact that
we have had this issue before the Senate on an earlier occasion, 2
years ago during the consideration of the annual appropriations bill
for the Department of Agriculture and the Food and Drug Administration
and related agencies, the Senator from Vermont, Mr. Jeffords, offered a
similar amendment to allow drug reimportation. These were prescription
drug reimportation rights.
Senator Kohl, who was the ranking Democrat at the time on the
appropriations subcommittee, and I, serving as chairman, offered an
amendment to that amendment which required a finding by the Secretary
of Health and Human Services that the implementation of that amendment
would not increase risk to public health and safety and that it would
result in a reduction in the cost of products to consumers.
This language was modified slightly in conference with the House. The
word ``demonstrate'' was substituted for the word ``certified,'' but in
all other respects the amendment survived conference and was a part of
the law.
Subsequent to that, Secretary Shalala, who was serving as the
Secretary of Health and Human Services in the Clinton administration,
wrote a letter to President Clinton describing her views about whether
the Department could demonstrate, as required by the law, that the
reimportation rights would not cause any failure of safety standards
and that it would reduce the costs of prescription drugs to those who
reimported them.
Her letter suggested that she could not make such a demonstration;
she could not meet the requirements of the law and certify that.
Then at some point Senator Kohl became chairman of the subcommittee,
and we thought we would be confronted in the next Congress with the
same amendment. So we had a meeting in his office with FDA officials,
Department of HHS officials, and others, to discuss the views of the
administration on this subject. We had a new administration come to
town. Secretary Thompson was in the meeting.
I was impressed and surprised at how much counterfeiting of drugs
goes on; that countries manufacture and label and package drugs all
over the world to look exactly like the drugs, some of which are off-
the-shelf medications in our drugstores throughout our country; others
are prescription drugs you can buy only if you have a prescription from
a physician. They showed us parcel after parcel, illustration after
illustration, of how much of this is going on around the world. They
cautioned we should be very careful about accepting any language that
would make it easier for the counterfeiters and for those who would
want to do harm and bring such drugs into the country because there is
no guarantee of their safety or efficacy, or that the strength stated
on the package is really what is on the inside.
By looking at the drugs or the medical devices, one could not tell
the difference. I could not tell the difference. No one could tell the
difference to decide whether this was safe or without a chemical
analysis.
The point of the story was, we were prepared to insist upon the same
language in the appropriations bill that we had gotten the Senate to
approve unanimously the year before, 96 to 0. They voted on the
language that would make sure we would not be doing anything that would
affect safety and that we really would be doing something to help
reduce the cost of prescription drugs to America. But no amendment was
offered.
I say that now by way of background and also to suggest to the
Senate, after we vote on the Dorgan amendment, which says if you are
going to permit reimportation and you find there is counterfeiting
going on, you can suspend it. That is what this amendment says. OK,
that is harmless enough. Let's approve that when we vote at 2:30 on a
regular vote. We agreed to accept this amendment by voice vote, but
there will be a recorded vote. I will vote for it. Sure, they ought to
be able to suspend reimportation if they find it to be counterfeit. But
guess what. There is counterfeiting and they will find it. It is no big
secret.
This amendment is meaningless. What we will need to do after we adopt
the Dorgan amendment at 2:30, under the agreement I will offer the same
amendment. We will say that the Secretary of Health and Human Services
must be able to certify that this will not adversely affect safety or
be a threat to U.S. consumers, and it will result in cost savings. I
want the Senator to know we will have an opportunity at that time to
consider another amendment to this proposal which I hope the Senate
will also adopt, as it has in the past, by unanimous vote.
I yield to the distinguished Senator from Utah.
Mr. HATCH. I thank my colleague.
Almost 2 years ago today, we visited the issue of whether to allow
importation of prescription drugs from other countries. The Senate has
before it today The Prescription Drug Price Parity for Americans Act,
designed to permit the commercial importation of prescription drugs
from Canada and to permit personal importation of prescription drugs
from any country.
S. 2244 is intended to modify the Medicine Equity and Drug Safety Act
of 2000, MEDSA, attempts both to address the safety concerns voiced by
FDA, DEA, U.S. Customs, Secretary of HHS,

[[Page S6904]]

and others and also expand the personal importation exemption contained
in current law.
As I will explain, reimportation was not a good idea then, and it is
an absolutely terrible idea today, especially after 9/11.
The high cost of pharmaceuticals in indeed one of the most difficult
matters facing our society today. We face a harsh reality: At a time
when scientists are able to offer an unbelievable new array of
medication, diagnostics, and vaccines, many Americans are encountering
difficulties in affording these state-of-the-art and often cost
therapeutics.
We have all heard stories of Americans going across the borders to
Mexico and Canada to purchase cheaper drugs. This type of activity is
also increasing over the Internet.
It may appear that the solution is simply to allow the importation of
prescription drugs into our country. While I do not question the good
intentions of those who believe this is the correct solution, we all
must be aware of the disturbing, lasting unintended and negative
consequences this proposal would have.
It have not possible to assure safety of reimported pharmaceuticals 2
years ago. Sadly, it is even more difficult to do so today.
We are facing an unprecedented time in history. I need not point out
to my colleagues the challenges this country is already facing in our
war on terrorism. Allowing drug reimportation is only going to further
threaten our safety and inundate our law enforcement and regulatory
agencies.
As always, there are many issues at play in this debate. But, the
number one fundamental issue at stake here is the safety of the
American people.
Assuring the American public that these imported drugs are safe and
effective and unadulterated is next to impossible, especially now, in
the midst of a war on terror. I worry that a day will come when either
an under-potent or over-potent or adulterated, either intentionally or
unintentionally, batch of imported drugs will cause injury and even
death.
Yes, we can have certifications and regulations and foreign
inspections and every other policing mechanism you can think of, but
the fact remains we cannot police everyone around the world.
With this bill, we are opening a door that Congress prudently closed
in 1988 when it enacted the Prescription Drug Marketing Act.
Let me give you a little background regarding the history of drug
importation law.
During the 1980s, the House Energy and Commerce Committee conducted a
lengthy investigation into the foreign drug market that ultimately led
to enactment of the Prescription Drug Marketing Act legislation--PDMA.
This bill was enacted after our nation experienced a series of
serious adverse events due to improperly stored, handled, and
transported imported drugs. There were serious threats to public health
and safety. That investigation discovered, among other things, that
permitting reimportation of American drugs ``prevents effective control
or even routine knowledge of the true sources of merchandise in a
significant number of cases.'' As a result, the House Committee found
that ``pharmaceuticals whic have been mislabeled, misbranded,
improperly stored or shipped, have exceeded their expiration dates, or
are bald counterfeits, are injected into the national distribution
system for ultimate sale to consumers''. It was determined that we
could not prevent the introduction of substandard, ineffective, or even
counterfeit pharmaceuticals.

The PDMA was necessary to eliminate health and safety problems before
serious injury to consumers could occur. the Committee report was clear
on why the PDMA was needed:
``[R]eimported pharmaceuticals threaten the public health in two
ways. First, foreign counterfeits, falsely described as reimported U.S.
produced drugs, have entered the distribution system. Second, proper
storage and handling of legitimate pharmaceuticals cannot be guaranteed
by U.S. law once the drugs have left the boundaries of the United
States.''
Now we place a high premium on our citizens receiving safe and
effective products, free from adulteration and misbranding. The Dorgan
bill, could unravel the protection that the PDMA provides us.
Dating from the 1906 Pure Food and Drugs Act, through the 1938
Federal Food, Drug and Cosmetic Act, the 1962 efficacy amendments
written by the Senate Judiciary committee, and the 1988 Prescription
Drug Marketing Act, our Nation has devised a regulatory system that
painstakingly ensures drug products will be carefully controlled and
monitored all the way from the manufacturer to the patient's bedside.
Under the current Federal Food, Drug, and Cosmetic Act, FDCA, it is
unlawful for anyone to introduce into interstate commerce a new drug
that is not covered by an approved New Drug Application, NDA, or
Abbreviated New Drug Application, ANDA. When a product is introduced
into interstate commerce that does not comply with an approved
application, it is considered an unapproved new drug in violation of
section 505 of the FDCA. It is also misbranded under section 502. These
basic rules cover importations, since importing is a form of
introducing a drug into interstate commerce. Under FDCA, a drug that is
manufactured in the US pursuant to an approved NDA and shipped to
another country may not be reimported into the US by anyone other than
the original manufacturer.
The provision restricting the right to reimport US drugs to the
original manufacturer was designed to ensure that only the party that
can truly vouch for the purity of the drug is allowed to bring that
medicine back into the country. The prohibition on reimportation of
products previously manufactured in the US and exported abroad was
added to the law in 1988 to guard against the entry of counterfeit and
adulterated products into this country.
On the issue of importing drugs for personal use, FDA has had a
``personal importation'' policy since the mid 1980s, which permits the
importation of an unapproved new drug for personal use, meaning the
individual may import no more than a 90 day supply, in certain
situations.
It was intended solely to allow unapproved medications into the US
for compassionate use. But over the years, there has been a tremendous
increase in volume and FDA has recently taken the position that the
personal importation policy has outgrown its usefulness and now
presents a threat to public health.
In a letter to Congress, FDA reported that the personal importation
policy ``is difficult to implement . . . due in part to the enormous
volume of drugs being imported for personal use and the difficulty
faced by FDA inspectors, or even health practitioners, in identifying a
medicine by its appearance''. FDA lacks the ability to adequately
monitory the enormous volume of mail-order pharmaceuticals.
The FDA has therefore proposed to the Department of Health and Human
Services that it eliminate its personal use policy for mail imports.
The Dorgan bill proposes to expand personal importation at a time when
the FDA is telling us that it can't handle this and wants us to stop
this policy.
In 2002, Medicine Equity and Drug Safety Act--MEDSA--included a
provision that allowed an importer or wholesaler--in addition to the
original manufacturer--to reimport US-manufactured drugs into the
United States. But this provision would become effective only if the
Secretary of HHS demonstrated to Congress that its implementation would
impose no additional risk to the public's health and safety and that it
would result in a significant reduction to the cost of covered products
to the American consumer.
In December 2000, HHS Secretary Donna Shalala said she could not make
this determination, citing flaws in the legislation that could
``undermine the potential for cost savings associate with''
prescription drug reimportation and that prescription drug
reimportation ``could pose unnecessary public health risks''.
In July 2001, HHS Secretary Tommy Thompson also declined to make this
demonstration on the premise that the safety of prescription drugs
could not be adequately guaranteed if reimportation were permitted
under its provisions.
So we have certifications by the top health officials of both the
Clinton and

[[Page S6905]]

Bush administrations that reimportation is inherently unsafe. Are we
willing to say, that it is safer today to import drugs by mail and
other avenues and that we can do a better job ensuring the safety of
these imported drugs? Especially after the tragic events we have been
through?
The Dorgan bill, S. 2244, is a modified version of MEDSA. A review of
S. 2244 will show that the new language is not significantly different
from the MEDSA provisions that Secretary Shalala and Secretary Thompson
rejected. Senator Dorgan, the sponsor of the bill, has stated that it
is very similar to MEDSA.
Although the modifications in S. 2244 are intended to address
original concerns inherent in MEDSA, they fall short of providing these
safeguards--safeguards which are nearly impossible to implement. The
new bill suffers from the same flaws as did MEDSA.
For example, S. 2244 is limited ostensibly to drugs imported from
Canada. In fact, however, a drug could be imported from anywhere in the
world under this bill, as long as it entered the U.S. through Canada.
There is no effective way under this bill to prevent the
transshipment of drugs--legitimate or not--from other countries into
Canada and then into the U.S. This would permit the entry of drugs that
have been manufactured, stored, shipped, and handled anywhere in the
world--in unsanitary conditions, unregulated conditions--and drugs that
have become adulterated and even toxic.
At a September 2001 hearing before the Senate Consumer Affairs,
Foreign Commerce, and Tourism Subcommittee, FDA's Senior Associate
Commissioner for Policy, Planning, and Legislation, Bill Hubbard,
warned of this very risk. Mr. Hubbard stated, ``Even if the Canadian
system is every bit as good as ours, and I don't know whether it is or
not . . . the Canadian system is open to vulnerabilities by people who
will try to enter the U.S. market again because that's where the money
is.''
To give another example, S. 2244 differs from MEDSA insofar as it
would require manufacturers to allow importers to use their FDA-
approved U.S. labeling free of charge. This could lead to an influx of
misbranded products into the U.S., as importers paste FDA-approved
labeling onto products from other parts of the world.
These drugs would be seen as an FDA-approved product manufactured and
sold by a U.S. manufacturer--but could easily be a different product--a
drug that could have deteriorated, or been contained, subpotent, or
toxic. The products would be indistinguishable to a consumer in a local
pharmacy, to a health professional, and even to the FDA. Consumers
would be deceived by this practice, thinking the U.S. manufacturer had
vouched for the purity, safety, and effectiveness of the product when
in fact the manufacturer could not and had not.

Our top health care financing official has concerns as well. In March
2002, the Administrator of the Centers for Medicare and Medicaid
Services--CMS--told the Senate Finance Committee that CMS opposes the
reimportation of prescription drugs into the U.S. ``We have opposed
it,'' he stated. ``There is no way for FDA to monitor and regulate
drugs coming in from Canada, Mexico, or other countries.''
The Dorgan bill also permits a significantly lower standard for
personally imported drugs than applies to domestic drugs. The Dorgan
bill could also open up a loophole in the FDCA for unscrupulous
commercial importers. It permits FDA to issue regulations permitting
individuals to reimport prescriptions not only in their personal
luggage but also through the mail or other delivery services.
We all know there is no way for FDA to limit mail order shipments to
personal use. A commercial importer could simply divide its shipments
into 90-day quantities and mail them separately, taking advantage of
the personal use policy to introduce counterfeit products into the
stream of U.S. commerce. This would overwhelm the ability of FDA and
Customs to process the millions of incoming packages. Many of the
criticisms of MEDSA--voiced by FDA, DEA, and others--apply equally to
the new Dorgan Bill.
Many senior officials in various agencies, including FDA, U.S.
Customs Service, the DEA, the Secretary of HHS warned of the difficulty
in ensuring the purity and safety of reimported drugs.
Let's hear again what the experts have to say about reimportation.
William Hubbard, FDA Senior Associate Commissioner for Policy,
Planning and Legislation, June 7, 2001:

We are very concerned that a system, if designed to be a
different system than the current system, poses risks and we
cannot be assured that we could successfully implement such a
system and bring in safe drugs because we do not have the
same level of confidence about where it was manufactured, and
how it was manufactured, and by whom it was manufactured,
that we have under the current system.

Elizabeth Durant, Executive Director, Trade Programs, U.S. Customs
Service, June 7, 2001:

You can see the kinds of drugs that come through the mail.
They are not even in bottles many times, just loose in paper.
We have counterfeit drugs. We have gray-market drugs. We have
prohibited drugs and we have unapproved drugs. And this is a
situation that is pretty much replicated around the country.

We live in a very different world now after 9/11--a more dangerous,
less certain world. We must question the safety of reimportation of
prescription drugs even more than ever.
As Secretary Thompson cautioned on June 9, 2002:

Opening our borders to reimported drugs potentially could
increase the flow of counterfeit drugs, cheap foreign copies
of FDA-approved drugs, expired and contaminated drugs, and
drugs stored under inappropriate and unsafe conditions. In
light of the anthrax attacks of last fall, that's a risk we
simply cannot take.

That's the Secretary of Health and Human Services warning us.
Here's another quote from William Hubbard, FDA Senior Associate
Commissioner for Policy, Planning and Legislation, July 9, 2002:

The cheaper drugs are there. We just have no way to say to
a given consumer, ``You have gotten a product that will
help--will save your life,'' and we fear that many people
will get a bad product that will hurt them.

We invest lots of money and resources in the United States to ensure
that medications and other therapeutics are made and distributed at the
highest quality and standards. Our agencies, while not perfect, have a
remarkable record of protecting the public from contaminated,
ineffective, and unsafe drugs.

We cannot guarantee an acceptable level of quality and safety with
re-imported drugs. We can't sacrifice quality and safety in the hopes
of getting cheaper medications. What's the use of cheap drugs if they
can potentially do a great deal of harm and threaten the public's
safety?
Reestablishing a system where wholesalers and pharmacists may import
prescription pharmaceuticals through Canada to the U.S. would recreate
the public health risk of counterfeit, unsafe, and adulterated drugs
that Congress sought to eliminate in the late 1980s with the
Prescription Drug Marketing Act.
Even if we put aside these very real safety concerns, the idea that
the Dorgan bill can achieve the goal of bringing cheaper drug products
to US consumers is unlikely.
This bill requires drug manufacturers to disseminate their drug
formulations to potentially thousands of pharmacies and wholesalers.
This information, currently protected under patent laws, could be worth
millions of dollars per drug, on the black market. Unscrupulous
individuals could obtain drug formulations and learn how to make their
fake drugs look real and survive chemical analysis.
Allowing individuals to pirate the hard work and innovation of
American drug companies to produce so called ``gray market'' products,
counterfeit products, is no way to ensure that Americans have access to
the latest pharmaceuticals in the long-run because they simply will not
exist if we do not protect the work of our private sector companies.
While there is a clear and obvious health danger in a contaminated,
pirated product, there is also great detriment to the American public
if the unscrupulous are allowed to reimport America's inventions back
into America without compensating the inventor. Few will be willing to
invest the upfront capital--hundreds of millions of dollars--to develop
a drug if another

[[Page S6906]]

party can make and sell the drug while it is under patent protection.
It takes an average of 15 years and a half a billion dollars to
create one of the blockbuster drugs. So we have to be careful. We must
be able to continue to attract the private sector investment into
committing to the research and development that has made the American
drug development pipeline so successful. We jeopardize this with
reimportation of drugs.
We can't just do what appears on the surface to be good but, in
essence, could kill people and undermine our fundamental system of
encouraging innovation and rewarding hard work.
How successful is pharmaceutical innovation in Canada? They have
price controls, and nobody is going to invest the money into developing
these lifesaving and cost-saving drugs over the long run in those
countries with price controls.
This is another step toward price controls that will weaken one of
the most important industries in America at a time when we just mapped
the human genome, and we are at the point where we can actually create
more lifesaving medicines.
When the value of American inventions is stolen, it is American
inventors and American consumers who suffer. The United States cannot
and should not allow free riders around the world essentially to force
the American public to underwrite a disproportionate amount of the
research and development that results in the next breakthrough product.
On the surface it seems there's no harm if drugs obtained from outside
the United States at prices lower than U.S. prices can be resold in the
U.S.; presumably this could lower prevailing U.S. prices. But great
harm can come from this. I can say that where nations impose price
controls, the research and development we count on to bring us miracle
cures is jeopardized.
How can we guarantee that foreign government price controllers will
not set an artificially low price on some new badly-needed Alzheimer's
or Parkinson's or Lupus drug? We can be sure that this will have the
unintended, but real, effect of convincing company officials to forgo
research on this new class of drugs for fear that, in conjunction with
the new liberal re-import policy, they will not be able to recoup their
investment?
Let's stop the free riders and cheap riders overseas while American
citizens are paying the full freight of R&D. Look, I understand the
appeal of bringing goods sold cheaper abroad back to the United States
at presumable savings to U.S. citizens. Yet, the amendment provides no
guarantee that those wholesalers and pharmacists importing the products
would pass their savings on to the consumer. And so, at best, with this
bill we could be trading public safety for middleman profits.
We would also incur far more costs policing this endeavor. The cost
of implementing the Dorgan bill would require very substantial
resources at a time when we are stretching our funding to HHS and other
federal departments to prevent future terrorist incidents.
We have to find a way around this drug access problem in this country
without creating a public health hazard and ``gray market''.
We will be importing not just drugs but some other government's
questionable safety standards and price controls into U.S. market
dynamics.
In our valid and justified quest to help make drugs more affordable
to the American public, we would be mindful not to unwittingly impede
innovation.
Even the Dean of the House, Representative John Dingell of Michigan
did not support similar legislation in the past when the House Energy
and Commerce Committee issued a report that concluded that ``the very
existence of a market for reimported goods provides the perfect cover
for foreign counterfeits.''
The concerns are relevant to the Dorgan bill that we are considering
today.
In our haste to bring cheaper drugs to seniors and other needy
Americans--an important and laudable goal--we risk making changes to
key health and safety laws and changes in our innovative pharmaceutical
industry that no one can afford. We must bring safe, effective drugs to
Americans, and particularly seniors, through avenues such as the
Tripartisan Medicare Bill.
We need to focus our efforts on passing a Medicare prescription drug
benefit bill. We should not pass another feel-good drug reimportation
bill before the election that we already know today will not and cannot
be implemented after the election.

____________________