[Congressional Record Volume 148, Number 101 (Tuesday, July 23, 2002)]
[House]
[Pages H5094-H5095]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 THE INFLUENCE OF THE DRUG INDUSTRY ON THE WHITE HOUSE AND ON CONGRESS

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 23, 2002, the gentleman from New Jersey (Mr. Pallone) is 
recognized during morning hour debates for 5 minutes.
  Mr. PALLONE. Mr. Speaker, more information comes out every day about 
the influence of the drug industry, both on the White House and on 
Congress, in terms of what kind of prescription drug plan we pass here 
in the House and in the other body, which is currently debating the 
bill.
  I do not bring up the information about the links between the 
prescription drug industry because of any desire to defame them, but 
only because I am very concerned that their amount of influence that 
they exert here basically skews the dialogue and what we pass in a way 
that is not beneficial to the average Americans.
  The bottom line is that Democrats in the House a few weeks ago, when 
the Republicans passed the prescription drug bill, were very critical 
of the Republican bill because it was basically giving money to private 
insurers in the hope that they would offer drug-only policies to senior 
citizens.
  There was nothing in the Republican prescription drug bill that 
passed the House that would guarantee a prescription drug benefit for 
seniors. There was no guarantee, and there was no absolutely effort on 
the Republican part to address the issue of price, which is the main 
problem most Americans face now, that the price of drug continues to 
rise.
  What Democrats said then and continue to say is that we need a 
prescription drug benefit under Medicare that guarantees the plan a 
benefit, a generous benefit, 80 percent of the cost paid for by the 
Federal Government, that guarantees that benefit to every American, or 
to every senior, I should say, to everyone who is eligible for 
Medicare, and that is basically under Medicare, an expansion of 
Medicare, and that addresses the issue of price by saying that the 
Secretary of Health and Human Services will basically negotiate for the 
30 or 40 million Americans who are under Medicare to reduce price maybe 
30 or 40 percent.
  Now, the reason that the Democratic bill did not get a chance, and 
the reason the Republican bill, which is private subsidies for 
insurance companies, passed, is not only because the Republicans are in 
the majority, but because

[[Page H5095]]

of the influence of the prescription drug industry. They wanted a bill 
that provided a subsidy to the private insurance companies and not a 
Medicare benefit, and the prescription drug industry wanted to make 
sure that there was nothing in the Republican bill that would reduce 
prices.
  I say that because more and more information comes out on a daily 
basis about the influence of the prescription drug industry. Soon after 
the House passed the Republican bill, the President released a study by 
the Department of Health and Human Services that basically said that 
the only way to go was to give money to private insurers; that a 
Medicare benefit and a program that controlled cost would actually hurt 
research and development of new drugs.
  This was in The Washington Post on Thursday, July 11. It said, ``The 
Bush administration plans to issue a study today suggesting that any 
new prescription drug coverage for older Americans must rely on the 
private sector to provide it, warning that too much government 
regulation could hinder access to promising new therapies. The report 
described effective drug therapies, and says that cost containment 
efforts would fail.''
  The bottom line is, who put out this report? We find out that the 
former vice president of policy for PHRMA, the prescription drug trade 
group, is in charge of Secretary Thompson's planning department. This 
is the same department that generated this study warning that a drug 
benefit delivered through Medicare would devastate R&D and harm 
seniors.
  It is simply not true. It is because of the influence of the 
prescription drug industry, and even the policymakers in the White 
House that used to work for them, that now we have both the industry 
and the advertisements paid for by the prescription drug industry and 
the people at the White House coming out and saying, go to the private 
sector; do not do a Medicare benefit, do not control costs.
  Now, by contrast to that prejudiced, if you will, study that came out 
from the White House, and essentially from former PHRMA people, 
Families USA did a report just last week issued on July 17. Their 
report showed that U.S. drug companies that market the 50 most 
prescribed drugs to seniors spent almost 2\1/2\ times as much on 
marketing, advertising and administration as they spend on research and 
development in 2001.
  The report essentially debunks President Bush's recent assertion 
through that study of HHS, and the drug companies' claims, that rising 
and fast-rising drug prices are needed to support R&D. So if we look at 
the facts, we find out that it is not that the brand name drug 
companies need more money because they are going to do more R&D and 
come up with better drugs, it is because they are spending so much on 
marketing and advertising and administration, and also paying their 
CEOs very high salaries. That is the reason why they want the higher 
drug prices.
  We must point this out on a regular basis.

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