[Congressional Record Volume 149, Number 89 (Tuesday, June 17, 2003)]
[House]
[Pages H5453-H5459]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           PRESCRIPTION DRUGS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Illinois (Mr. Emanuel) is 
recognized for 60 minutes as the designee of the minority leader.


                             General Leave

  Mr. EMANUEL. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and to include therein extraneous material on the subject of my Special 
Order today.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Illinois?
  There was no objection.
  Mr. EMANUEL. Mr. Speaker, currently both the House and the Senate are 
in intense deliberations to forge a compromise on a prescription drug 
benefit for Medicare and Medicare recipients. I am glad to see that 
both Republicans and Democrats after all this time are working together 
to try to correct this critical deficiency in the Medicare program.
  When Medicare started in the early 60s, about 10 percent of the 
health care costs for a senior was dedicated to out-of-pocket drug 
costs. Today that is around 60 percent of their health care costs, or 
health care dollar. And so if we are going to have a health care plan 
for seniors and if Medicare is going to live up to its obligations that 
it was originally designed to do, Medicare must have a prescription 
drug plan.
  We all know that one of the most contentious issues in the 
prescription drug debate is the question of how much of the cost of 
drugs should be paid by government and how much should be passed on to 
seniors. But the crux of this problem is that both the U.S. Government 
and American seniors are paying too much for prescription drugs. 
Providing a prescription drug benefit through Medicare is unfortunately 
only the tip of the iceberg in addressing a widespread prescription 
drug access issue facing our Nation.
  Much more central to the inability of many seniors and other 
Americans to afford the prescription drugs they need is the fact that 
prescription drug prices are 30 to 300 percent higher than those in 
other industrialized nations. The truth is one of the big problems we 
have here in the country is that we do not have a free market as it 
relates to prescription drugs and drug costs. I

[[Page H5454]]

really believe that one of the central points of this debate is that we 
need a free market.
  The three things I am going to discuss today are, A, the issue that 
American consumers, be they elderly or others, are denied access to 
prescription drugs from all over the world and they are a captive 
market, unable to buy drugs, be they in Canada, Mexico, Germany, 
France, where the same drugs are much cheaper than they are here in the 
United States. If our consumers were allowed to have access to those 
drugs, there would be competition and prices would drop. But because 
the free market is prohibited from exercising its magic, drug costs are 
artificially raised.
  The second point I want to discuss is the American taxpayer through 
two different venues provides direct and indirect assistance to the 
drug companies to develop the drugs. Drug companies reap all the 
profits, and the American taxpayers do not get any of the benefits back 
as an investor. If we were an investor, and I come from the private 
sector, private sector investors when they invest in a drug, they 
usually look for what is called a 30 percent IR, investment return on 
equity. Yet the taxpayer who provides through taxes both direct 
assistance to the FDA as well as through the tax write-off that 
pharmaceutical companies get, they do not reap any of the benefits from 
these drugs being developed. Yet we develop these drugs, taxpayers 
spend billions and billions of dollars helping develop these drugs, yet 
the only benefit they get besides taking the drug is they pay the 
highest premium price out there.
  I believe the right way to get the prices under control is for the 
investor, known as the American taxpayer, to reap the benefits of their 
investment dollars. And, third, deal with the area of generics and 
generic markets. If we allowed generics to get to market quicker, it 
would also create that type of competition. I think one of the problems 
we have here is that the American elderly, the American taxpayer and 
consumer have an artificial market that is in three areas, generics, 
taxes and access to the same drugs in other markets around the world. 
Because we are a captive market, we pay artificially high prices; and 
the American seniors specifically are the profit margin or, as I like 
to call them, the guinea pig profit margin for the pharmaceutical 
companies. I want the free market to work. The pharmaceutical companies 
are treating this market as a captive market. If we had a free market, 
we would have reduced prices.
  Medicare drug benefits being considered by Congress are very 
expensive. Many seniors, especially those who do not have secondary 
insurance, will continue to have significant out-of-pocket drug costs 
even with the passage of a Medicare drug benefit. In addition, the high 
cost of drugs remains a crisis for 42 million uninsured and countless 
underinsured who must pay all or most of their drug costs out of 
pocket. Addressing the cost of prescription drugs will both make a 
Medicare drug benefit less expensive for the government and greatly 
increase the value of what is provided for our elderly. It will also 
make it much more likely that millions of uninsured and underinsured in 
this country can afford lifesaving, life-preserving prescription drugs, 
what their compatriots in Germany, France, England and other 
industrialized nations get. Prescription drug companies are a business, 
and they need to earn profits in order to stay in business. But as they 
have the right and purpose like other businesses to earn a profit, they 
also have a responsibility to be a good corporate citizen and abide by 
the same standards as other businesses.

  As I said, I have worked in the private sector. I know that any 
private company when investing in research and development and in 
another company usually looks for a 30 percent return on their equity. 
The United States Government invests in pharmaceutical research by 
providing significant tax benefits for research and development 
expenses and American citizens subsidize the research as drug companies 
recoup their margins in America because of price controls in other 
countries. The American Government and the American people are getting 
no return on their investment. The pharmaceutical companies are reaping 
the financial benefits of the U.S. investments in their R&D without any 
responsibility to pass these benefits on to the government and American 
taxpayers.
  American consumers are bearing the burden of price controls in other 
countries. When 50 tablets of Synthroid cost $4 in Munich and $21.95 in 
the United States, the most vulnerable Americans suffer. Also it is one 
of the great reasons that we have inflation running at close to triple 
or quadruple here in health care in the United States as opposed to the 
market as a whole. We are using individuals as the profit guinea pigs 
for pharmaceutical companies.
  The legislation introduced by my good friend and colleague, the 
gentleman from Minnesota (Mr. Gutknecht), last week takes important 
steps to address the shocking disparities in prescription drug prices 
between the U.S. and other industrialized nations. It puts essential 
safety precautions in place to ensure that by opening our markets, we 
do not expose Americans to the dangers of counterfeit drugs. When 
defending the high cost of prescription drugs in this country, people 
will often say that the U.S. has the best health care system in the 
world. People come here from overseas to get a better product. But we 
clearly have nothing close to the best prescription drug delivery 
system, as many individuals are now shopping overseas for their 
prescription drugs. If we are going to defend our status as the best 
place to get health care in the world, we need to make the pillar of 
many people's health care, prescription drugs, accessible and 
affordable.
  I yield to my good friend, the gentleman from Minnesota (Mr. 
Gutknecht).
  Mr. GUTKNECHT. I would like to thank the gentleman from Illinois for 
taking a leadership role on this important issue. This is a huge issue. 
Members need to know that the estimate that the Congressional Budget 
Office is currently using is that seniors alone over the next 10 years 
will spend $1.8 trillion on prescription drugs. As the gentleman 
alluded to, I have been doing research. I should not say I have been 
doing research; there have been groups who have been sending me 
research for the last 4 or 5 years in terms of these great disparities 
between what Americans pay for name-brand prescription drugs versus the 
rest of the world. We have heard a lot about Canada; we have heard a 
lot about Mexico. But what has intrigued me the most is the differences 
between what we pay in the United States and what they pay in the 
European Union.
  What I have here is a chart of about 12 or 13 of the largest-selling 
prescription drugs. This chart is old and the numbers have changed, but 
the percentages remain the same. This information is confirmed by 
research that I have done, that others have done, several groups have 
done this; but let me just run through a few of these examples. 
Augmentin, sold in the United States for an average of $55.50. You can 
buy it in Europe for $8.75. I have examples of these drugs. We actually 
went to Germany and bought some of these drugs. This is Augmentin. This 
is Cipro. Cipro is made by the German company Bayer. They also make 
aspirin. As you can see, it is a very effective antibiotic and 
especially in the days when we had anthrax here in the Federal 
buildings, we bought an awful lot of Cipro. In the United States it 
sells for an average of $87.99. In Europe you could buy that same 
package of drugs for $40.75 American. Claritin, $89. It is $18 there. 
Coumadin, this is a drug that my father takes. He is 85 years old. It 
is a blood thinner, a very effective drug. Coumadin in the United 
States at that time was selling for about $64.88. In Europe you can buy 
it for $15.80.
  And the list goes on, but let me give an example, and the gentleman 
from Illinois, I think, made a great point about the amount that 
American taxpayers spend to develop these drugs. This is a drug that 
really chaps my hide. This is a drug, Tamoxifen. In many respects, this 
is a miracle drug. It is probably the most effective drug against 
women's breast cancer that has ever been invented. This drug we bought 
at the Munich airport pharmacy for $59.05. We checked here in the 
United States. This same package of 100 tablets of Tamoxifen in the 
United States sells for $360; $60 in Germany, $360 here.
  As I say, the evidence is overwhelming that most of the research,

[[Page H5455]]

and I have a report if any of the Members would like a copy, this is a 
Senate report done in May of 2000, and in the Senate report, if I could 
just read into the Record, the National Cancer Institute, part of the 
NIH, has sponsored 140 clinical trials of Tamoxifen. It also 
participated in preclinical trials consisting of both in vitro, 
laboratory and live-subject tests. In other words, here in a Senate 
report we have confirmed that the taxpayers paid for much of the 
testing that was done on this drug.
  He also referred to the drug Taxol. There was a story just a couple 
of weeks ago in The Washington Post. Let me just quote some of these 
numbers about what the taxpayers paid to develop this drug and what the 
pharmaceutical company got out of it.
  Bristol-Myers-Squibb earned $9 billion from Taxol, which has been 
used to treat over a million cancer patients; but the National 
Institutes of Health received only $35 million in royalties. You go 
down the article a little bit further and it says, the GAO, the 
investigative arm of Congress, said that the NIH spent $484 million on 
research on Taxol through the year 2002. So the taxpayers invested $484 
million, took it most of the way through the research pipeline, and we 
got $35 million back.

                              {time}  1845

  Mr. EMANUEL. Let me ask the gentleman a question. Can you repeat 
again for those who are watching, as you note, this is a miracle drug 
and all the investment the U.S. taxpayers did, repeat again so 
everybody knows the difference between the price overseas versus the 
United States for those two drugs.
  Mr. GUTKNECHT. Unfortunately, on Taxol I do not have that comparison. 
I do not think it is on my list, but the comparison is essentially the 
same. It is about three times more, or at least it was when it came off 
patent in the United States; it was more than three times more in the 
United States than they paid in Europe, and the American taxpayers paid 
for most of the R&D costs. By the GAO's own estimate, the taxpayers 
spent at least $484 million developing the drug, and I yield to my 
friend.
  Mr. EMANUEL. Mr. Speaker, I ask my good friend, I did not mean to 
interrupt him. Did he want to keep going?
  Mr. GUTKNECHT. No. I have plenty of information, but the interesting 
thing about these charts and these comparisons, if people doubt what 
they paid for these drugs, we have the receipts. So we can literally go 
through and say, yes, this is what we paid for Tamoxifen, $59.05 in 
Germany, and we did not have a special discount card. We are not German 
citizens; so we were not going in for socialized medicine. These are 
drugs that we just bought off the shelf or from the pharmacist at the 
Munich airport. So it is not as if they are being subsidized by the 
German Government. The truth is they are being subsidized by us, and 
what I have always said is that Americans should be prepared and we are 
prepared and willing. I think most Americans are willing to subsidize 
the research for these miracle drugs. In fact, I think we are willing 
to subsidize people in developing countries like Sub-Saharan Africa, 
but we should not have to subsidize the starving Swiss.
  And finally, let me just make one last point, and I will yield back. 
I am with the gentleman. I happen to be a Republican. The gentleman is 
a Democrat, but we are both capitalists. We both understand that there 
is nothing wrong with the word ``profit,'' but there is something wrong 
with the word ``profiteer,'' and there is growing evidence now that the 
big pharmaceutical companies are actually spending more on marketing 
and advertising than they are on basic research.
  Mr. EMANUEL. Mr. Speaker, I thank the gentleman. What I would like to 
do is I am going to turn to the gentleman from Illinois (Mr. Davis), 
our good friend and my colleague from Illinois, in a second. I would 
like to repeat just one point on this. If you take this market on 
either cancer or AIDS drugs, just those segments or families of drugs, 
there is not a single cancer drug today or AIDS drug on the market that 
was not directly developed with assistance from the United States 
Government, NIH; and it was not directly developed with the tax dollars 
from the taxpayer; and yet the only benefit of those drugs, obviously 
besides using them and saving lives, the American consumer, be they the 
elderly or just families and children, they pay, as the gentleman 
noted, three times more than do people in Germany, France, and other 
major industrialized countries; and yet we were the ones who developed 
it.
  We were the ones who gave the tax dollars to develop this. We also 
not only gave it from the NIH direct funding, using tax dollars to fund 
it, but on the back end these companies write off their R&D. So we have 
to make up that loss in the tax revenue pool so they can develop these 
drugs; and as I think the gentleman noted in his statistics, we then 
get a minuscule amount of return. Actually in the private sector money 
like that is called dumb money. That is how they refer to it. It is 
foolish money. It is called dumb money. It is people who put up dumb 
money, do not look for the 30 to 20 percent IR on equity, and that is 
what has been going on for years here in this country, and we are 
paying premium prices; and in these companies they figure that in 
Germany they are going to pay X, in Canada they are going to pay Y for 
the same drug, England is going to pay, and they have got to make up 
their margin. Whom are they making up the margin with? Our neighbors, 
our friends, our family members; and we funded this research, and we 
developed these drugs.
  My view is I would love for the free market to come to the 
pharmaceutical industry. It just has not. It is a protected industry by 
the United States Government, from the Tax Code to importation to the 
development of generics.
  Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield.
  Mr. EMANUEL. Yes.
  Mr. GUTKNECHT. I think he used the word earlier and I think it is the 
critical word. He said that we are a captive market, and if we look 
around the world, whether it is beef and Japan or blue jeans in the 
former Soviet Union, anytime there is a captive market, what will 
happen is they will create an artificial price barrier which will 
guarantee that the consumers will pay outrageously higher prices, and 
that is what has happened here in the United States. The German 
pharmacist has the right to go anywhere within the European Union and 
buy this Tamoxifen where he can get it the cheapest for his consumers. 
That is part of the reason that Tamoxifen is $60 in Germany and $360 
here in the United States. In fact, the companies are protected by our 
own FDA from any real competitive pressures which would help to keep 
prices down. And I do not say shame on the pharmaceutical industry; I 
say shame on us. They are only exploiting a market opportunity which 
our government has given them.

  Let me just share with the gentleman and other Members from a book 
called ``The Big Fix'' because I think it helps tell the whole story by 
Katharine Greider, and she quotes a study that was done in 1998 by the 
Boston Globe, and they looked at the 35 highest-selling prescription 
drugs in the United States; and they claim, the Boston Globe, and then 
is repeated in the book ``The Big Fix,'' that 32 of the 35 largest-
selling drugs in the United States a few years ago were actually 
brought through the research and development chain by the taxpayers 
through the NIH, the NSF, the Defense Department, or other Federal 
agencies, principally the NIH. So it is not shame on them, but it is 
shame on us. We do not get a rate of return. We get nothing except for 
millions of our consumers the highest prices in the world, and it is 
time for us to change that.
  Mr. EMANUEL. I thank the gentleman. If he could yield, I would like 
to now ask the gentleman from Illinois (Mr. Davis), my good friend, who 
has joined us here to also speak about his district in Chicago that 
borders mine, but also about this issue as it relates to the 
pharmaceutical industry and prescription drugs and what is going on.
  Mr. DAVIS of Illinois. Mr. Speaker, I thank the gentleman from 
Chicago (Mr. Emanuel), my neighbor and friend, for organizing this 
Special Order and certainly for giving me an opportunity to 
participate. Our districts abut each other; and as a matter of fact, I 
guess before now some of what is my district was his district.

[[Page H5456]]

Maybe some of what was his district is my district. So we have many 
similarities and certainly represent some of the same people and some 
of the same thoughts. It is no secret that I am a supporter of the 
notion of reimportation of prescription drugs. As a matter of fact, I 
am a proud cosponsor of H.R. 847 introduced by the gentleman from 
Vermont (Mr. Sanders), my good friend.
  Some people might ask me why do I support the concept of 
reimportation of prescription drugs, and I generally say to them it is 
no real big deal if they understand as I do, but I do it for a lot of 
reasons. One, the increasing use of prescription drugs has 
revolutionized health care. As a result, spending on prescription drugs 
has increased at a rate of 12 to 13 percent a year for the past decade 
and will continue to increase in cost at that rate for the foreseeable 
future. Prescription drugs are the fastest-growing portion of State 
health care budgets, and many States are facing serious budget crises 
relative to being able to come up with enough money to actually 
operate. Yet millions of seniors, perhaps tens of millions, are 
skipping doses of their prescribed medication or splitting pills or 
facing a choice between food on the table or taking their prescription 
drugs. I know this because of the statistics. I know it because of the 
recent studies. I know this because every weekend when I go home, I 
hear about this dilemma from one or more seniors in my district.
  Meanwhile, the pharmaceutical industry remains the most profitable 
sector of the U.S. economy with profit-to-revenue ratios of over 18 
percent. I heard the gentlemen discussing profits and being capitalists 
and living in a capitalistic environment; and like them, I do not have 
a problem with profits, but I do have a problem with overcharging our 
seniors. So when I learn that Glucophage for diabetics is 74 percent 
cheaper in Canada than in the United States, I have a problem with 
that. When I learn that Tamoxifen for treatment of breast cancer is 80 
percent cheaper in Canada than in the United States, I have a problem 
with that. Time does not permit, but I could easily go on and on with 
the list of prescription drugs available outside the U.S. at a fraction 
of the cost to my constituents, and when I learn that almost 80 percent 
of the ingredients of prescription drugs are imported, that redoubles 
the problem I have with the cost of prescription drugs in the United 
States. And when I learn that these prescription drugs are developed 
with millions upon millions of dollars of Federal tax money, I have a 
serious problem with the cost of prescription drugs in the United 
States.
  I know that reimportation is not the sole or even most important 
element in providing affordable prescription drugs for our people. I 
for one will not rest until we have real and effective prescription 
drug coverage preferably as part of a system of universal health care. 
But absent a comprehensive solution, there is no excuse in denying 
Americans the same access to prescription drugs enjoyed by our Canadian 
neighbors.

  Mr. Speaker, the prescription drug industry is sick, and that 
sickness is endangering the health of all America. Reimportation would 
be a good first dose of castor oil to bring the industry back to a more 
regular and healthy state. So I want to thank my colleague and neighbor 
from Chicago again for organizing this complex discussion on the issue 
of prescription drugs and how we can get the costs down, and I yield 
back to him and thank him so much for the opportunity to participate.
  Mr. EMANUEL. Mr. Speaker, I thank the gentleman. He brought up the 
breast cancer; was that correct?
  Mr. DAVIS of Illinois. Yes.
  Mr. EMANUEL. I think it illustrates again what our good friend from 
Minnesota said and has brought forth examples is that, in fact, there 
is not a drug today, and we can also expand this to medical choice, but 
no drug today that is not being developed and has not been developed 
that is around the country that any way you look around the world in 
the major industrialized countries where we have trading companies, and 
the gentleman noted wheat, meat, steel, cars, computers, all types of 
products where there is ``free trade,'' and yet here in this specific 
area, we are paying top price, high-premium dollar. I think again, 
whether it is diabetes, breast cancer, there are other drugs that are 
on the market that affect other types of illnesses, and I think the 
gentleman highlights a very important point, especially given his 
district and my district that abut each other, how this creates 
inflation, and besides the uninsured, the cost of pharmaceutical drugs 
is the single largest cause for health care inflation in the health 
care industry which has been running at 20 to 30 percent of inflation.
  So he brings up, I think, a very good point, and I think it is 
relevant to the discussion we are having today. What I am most 
impressed with is the bipartisanship we have here in discussing this. 
And I think the truth is, and I would love to hear both their thoughts 
on this, that while we are doing a drug prescription benefit and we are 
talking about it in the Senate and we are going to be taking it up here 
in the House, without some type of ability to have competition in that 
process, we are really going to be offering a benefit at top dollar, 
and I think, as American taxpayers are going to be paying for the 
prescription drug benefit that we are going to add to Medicare, we 
should give them a sense of competition in the market so that we can 
find that drug cheaper in Canada, we can find that drug cheaper in 
Mexico or Germany, France, or England. We want to bring that so we can 
squeeze the most coverage out of our prescription drug plan for 
Medicare.
  Mr. DAVIS of Illinois. Absolutely. And one does not have to be on 
Medicare or Medicaid to feel the bite.
  Mr. EMANUEL. Right. I thank the gentleman. I yield to the gentleman 
from Illinois (Mr. Kirk).
  Mr. KIRK. Mr. Speaker, I would like to compliment the gentleman from 
Illinois, my neighboring colleague from Chicago, because I know not 
only is he leading on this issue, but he is leading on creating a 
proposal that fits within our budget. And there is a very important 
point here, that we are going to make a promise to America's seniors 
and they are going to count on that promise. So that promise has to be 
sustainable and affordable. By crafting a proposal which fits within 
the budget resolution, my colleague from the other side of the aisle is 
crafting a serious proposal and is joining in the debate in a 
particularly productive way, and I want to compliment him on that.
  Mr. EMANUEL. I appreciate that. I yield again to the gentleman from 
Minnesota if he had some additional comments because I have some other 
things, but I would like him to go ahead.
  Mr. GUTKNECHT. Mr. Speaker, let me just talk about a couple of 
things, and I think as we talk about this new benefit, and I think we 
all recognize there are far too many seniors that are not getting the 
prescription drugs that they need, there was a study done several years 
ago by the Kaiser Foundation, and they found in their survey that 29 
percent of seniors responded that they have had prescriptions which 
they did not have filled because they could not afford them, 29 
percent.
  Mr. EMANUEL. So that is about one third.
  Mr. GUTKNECHT. About one third. And I say shame on us because we have 
the power to do something about that.

                              {time}  1900

  I spoke several weeks ago to the Community Pharmacists, and I just 
had received this report from the Kaiser Foundation. I asked them as I 
looked out over this audience of roughly 300 pharmacists from all over 
the United States, ``Has this ever happened to you, where seniors come 
into the pharmacy, they hand you a prescription and you tell them how 
much it is going to be, and they drop their head and they say, `well, I 
will be back tomorrow,' and they never come back?''
  Shame on us. Shame on us. We need to do something about that.
  But as has been mentioned by several of my colleagues, if we go about 
this in the wrong way, we may not do enough to really help those 
seniors who really need the help. But, worse than that, we may bankrupt 
our children, and there is something wrong with that.
  Let me also mention that we are moving ahead with this, and we have 
heard some of the sponsors of the various bills say, oh, but we will 
have these groups, and get very significant discounts and really good 
deals on prescription drugs.

[[Page H5457]]

  Well, this is a study recently done by one of the cardinals of the 
Committee on Appropriations, and they literally went through and found 
out how much the Federal Employees Benefit Program is paying for some 
of these drugs. It is rather eye-opening.
  There are some areas where they are actually getting good discounts 
and are competitive with the prices they get in Europe. But let me give 
you some examples. The Blue Cross-Blue Shield plan, for example, on 
Coumadin mentioned earlier, even with their discount, the combination 
of what the Blue Cross-Blue Shield plan cost is, and you add in the 
beneficiary cost, the total cost for Coumadin under the Blue Cross Blue 
Shield plan for a Federal employee is $73.74. Now, Coumadin can be 
bought for $15.80 in Europe. So $73, that is the Federal plan. You read 
down the list of all kinds of other drugs. It is very similar.
  Zocor, the total cost for Zocor under the Federal plan, Zocor is one 
area where it actually is cheaper, but not much cheaper. With their 
deep discount, the total cost is $17.48. That same drug in Europe would 
be $28.
  But as you go through the list, what you find is in virtually every 
category, even with these ``deep discounts'' that the Federal 
employees' plan is able to get, it still is significantly more than the 
average consumer gets them for in Europe.
  One final point, if I could, the argument that many people make 
against reimportation is safety. But what about safety?
  Mr. EMANUEL. That is a very important point.
  Mr. GUTKNECHT. We import every day thousands of tons of food. It 
surprises me how many tons. In fact, the number I remember is we import 
roughly 318,000 tons of plantains every year, and every time we eat a 
plantain that comes in from a foreign country, we take a certain amount 
of risk, because that could contain some food-borne pathogen.
  We keep very good records on how many people get ill from eating 
imported foods. Let me give a couple of examples. In 1996, 1,466 
Americans became seriously ill eating raspberries from Guatemala, 
1,466. The next year they did a little better. Only 1,012 Americans 
became seriously ill from eating raspberries from Guatemala.
  The point I am really trying to make here is we take a certain amount 
of risk. I believe that the risk, particularly with the new 
technologies, and I am holding in my hand a tamper-proof, counterfeit-
proof package for pharmaceuticals.
  Here is one that is currently in use by the company Astrozenica. This 
is the first version of the tamper-proof, counterfeit-proof packaging. 
So this whole issue of safety relatively speaking, even today, it is 
very, very safe.
  But with the new technology that is going to be coming on line, I am 
holding in my hands, and you cannot see this, but a little vial, and 
inside this vial there are 150 microcomputer chips. They are so small 
you can barely see them with the naked eye. But this literally is the 
next version of the UPC code.
  Within 2 years they will be embedding these chips into packaging, so 
that we absolutely can know that this package of drugs was produced at 
the Bayer plant in Munich, Germany, on September 8 of this year, and 
was shipped to so and so.
  So the whole idea that we cannot do this safely, it seems to me, is a 
specious and almost goofy argument. So I do not think we should even 
engage in it. It can be done, it is being done. It is far more safe to 
import drugs than it is raspberries from Guatemala.
  Mr. EMANUEL. The only reason I had a smile cross my face is when you 
said the word ``embedding,'' I said who knew the Pentagon was going to 
be so far ahead of the pharmaceutical industry, and now they are going 
to copy from them.
  But the truth is, we all were exposed in the '80s and '90s to the 
notion of the $500 hammer, where the Pentagon was off buying $500 
hammers, when if you just went down to the hardware store you could go 
down there.
  The fact is, your chart up there shows exactly the similarity that is 
happening now to the American taxpayer and consumers, where you could 
buy these same drugs overseas in different markets for far cheaper than 
we are buying them here, and it is the equivalent.
  And why is that? Just like the $500 hammer, the fix is in. So if you 
go down the specific area, and I do not blame the pharmaceutical 
industry, they are playing the game just like they are supposed to play 
it, and they are rigging the game and system just like they are 
supposed to, for maximum profit.
  But take it, whether it is in the generic drug laws or in our patent 
laws, they are keeping generic drugs off the market, therefore driving 
up the cost of name brand drugs, making it more expensive for all of 
us. If generic drugs were on the market and the system was not being 
fixed, you would have real competition.
  What has happened is, the Wall Street Journal did a story the other 
day, as generics have started to come to market quicker and there has 
been a quicker process set in place by the FDA to approve generics, we 
have allowed that patent not to be gamed for an additional 30 months, 
we have, in fact, seen prices drop.
  They have, in relation to the importation issue, pharmaceutical 
industries in that area have gamed the system very well, prohibiting us 
from buying the same type of drugs in either Germany, Canada, France, 
England, Italy, Israel, wherever, they have gamed the system. We are 
not prohibited from buying computers, cars, food items, other types of 
items. We are prohibited in this space.
  What is the impact? Those same drugs, cheaper over there; more 
expensive here at home. Yet they are the same drugs we paid for the 
development.
  Then through the Tax Code, the IRS, where we do an R&D tax write-off, 
where they are allowed and subsidized by the taxpayers for the research 
and development, yet they get a direct subsidy from the NIH.
  I highlighted the area through the NIH of cancer drugs and AIDS 
drugs. Not a single drug in either one of those families has been 
developed without direct assistance by the government, yet, again, in 
that area we are paying prime dollar versus our brethren in the other 
industrialized nations.
  So I actually take my hat off to the pharmaceutical industry, because 
they have worked the system to their benefit. Now, my hope is, if you 
go back in history and look at this in fact, when Medicare and Medicaid 
was first developed and voted on, it received overwhelming bipartisan 
support. Now, these are early preliminary stories in fact.
  We are seeing right now that in the Senate, as they debate the 
prescription drug benefit for Medicare, we are seeing the early stages 
of bipartisanship, and we can discuss, argue, amend about the right 
approach. My hope is that when we have a chance here in the House, that 
that same bipartisanship would be approached with regard to the 
prescription drug bill, but that bill would include something on 
generics.
  Over there they have a bill. Here, the gentleman from Ohio (Mr. 
Brown) has a bipartisan bill dealing with generic reform, dealing with 
the update of the patent laws as it relates to what the gentleman from 
California (Mr. Waxman) developed and passed in 1984 and Senator Hatch. 
I would hope that we would update our laws in the generic area. I would 
hope we could update our laws as they relate to importation.
  And we have a bipartisan bill, the gentleman and I have. We have a 
generic bipartisan bill here. So we would keep that spirit and that 
tradition as it relates to Medicare, as it relates to prescription 
drugs, that, through and through, that bill would be bipartisan. I 
would hope, obviously, it can relate to some of the funding issues and 
recoup some of the investment our taxpayers have made through the 
direct funding through the NIH or IRS piece of the Code where we pay 
and subsidize pharmaceutical companies to do what is in their business 
plan, develop drugs.
  I yield additional time to my good colleague from Minnesota.
  Mr. GUTKNECHT. I appreciate the gentleman mentioning the bipartisan 
nature of this, because we did a special order last week, and we had 
Democrats and Republicans. We had some of the most conservative 
Republicans, and what I think most of us would agree are some of the 
most liberal Democrats, agreeing on this issue, and that is Americans 
should not have to pay

[[Page H5458]]

the world's highest prices when we are the world's best customers and 
when we spend more for the development of those drugs.
  I am also the vice chairman of the Committee on Science. Just to 
share with my fellow colleagues how much we spend on research, and we 
should be proud of this, this year in this budget we will spend almost 
$29 billion on various kinds of basic research. In fact, we represent 
as Americans less than 6 percent of the world's population; we 
represent more than half of all of the basic research done in the 
world. I am proud of that. But we should not have to pay for these 
drugs a second and a third time when we helped develop them.
  We are not asking for special breaks. All we are asking for is 
fairness. Reimportation or importation is not a perfect answer, but we 
do know that markets are more powerful than armies, and ultimately 
markets, whether it is the market for grain or the market for diamonds, 
has a tendency to level prices all over the world.
  Let me just mention one other thing, and I mentioned this in a 5-
minute special order I did earlier. This is the June 9 issue of U.S. 
News and World Report. In it there is a true American patriot. Her name 
is Kate Stahl. She is 84-years-old and she describes herself as a drug 
runner.
  The tragedy is that the American government treats her as a common 
criminal because she helps her fellow seniors through the Senior 
Federation of Minnesota acquire drugs from other countries at 
affordable prices. In the article she says, and this is why I think she 
is a patriot, ``I would like nothing better than to be thrown in 
jail.'' That is a patriot. She is willing to do that for her fellow 
seniors so that they can get affordable prices on drugs.
  Mr. EMANUEL. First of all, I thank the gentleman for organizing this 
and thank you for introducing your legislation. I think this is the 
right approach.
  I think, again, whether it is the area of generics coming to market 
and updating our patent laws, whether it is the tariffs or limitations 
we put on importation or access to these drugs, the same drugs we see 
on the shelves in our pharmacies, that the American consumer has access 
to them, each of these, at least on the generic and reimportation, are 
bipartisan issues.
  I think that this is the right approach, not only because it is 
bipartisan and it reflects our values and reflects a common set of 
values that we can come around, but, most important, is that in dealing 
with the issue of a prescription drug, the truth is, all these drug 
plans have some limitations. People will not be covered. So the 
question is, how do you squeeze the most out of that dollar? It may be 
$400 billion over 10 years. The final product may be $450 billion.
  The question, though, we have to ask ourselves is, can we get more 
out of that? Can we get more people covered? Can more people get a 
plan, so their deductible is not as high as it is? And the only way to 
do that is to make sure that a prescription drug plan as it relates to 
Medicare, as it relates to the cost of prescription drugs in the dime 
stores and drugstores and pharmacies across the country, can we reduce 
the prices? We can do that if we would bring the free market approach 
to the pharmaceutical industry.
  So I applaud this. I am very pleased to be a bipartisan supporter and 
original cosponsor of the gentleman's legislation. I am on the generic 
drug legislation.
  I think that approach comes together, not just because we are 
Democrats and Republicans, we come together on a common set of values. 
We approach this from the basis we may need more money for a 
prescription drug benefit plan, but we are going to make sure this $450 
billion over 10 years, we get the biggest bang for the buck, and that 
this game that has been going on, and they have been gaming the system, 
is going to come to an end.
  We are not going to allow this to happen. We are not going to allow 
you to have frivolous lawsuits that keep patents on another 30 months. 
I want frivolous lawsuits to end. We are going to have them end. It is 
specifically how pharmaceuticals have been treating generic drugs and 
preventing them from coming to market.
  We are not going to allow the pharmaceutical companies to keep up the 
game and not allow us to import the same drugs that overseas are at 
close to 30 percent to 300 percent cheaper than we pay here. And if you 
did that, you would be on your first step of controlling health care 
inflation that has been running at close to 20 to 25 percent, which is 
just suffocating our small and large businesses, who are seeing their 
insurance policies just go right through the roof.
  The second item, obviously, and we may have a different approach to 
this, but the second item would be to insure the uninsured in this 
country. If you did that, and I also note when it relates to the 
working uninsured in this country, the only issue in which the Chamber 
of Commerce and the AFL-CIO agree on on health care, and they are both 
running campaigns, is we have got to insure the working uninsured.

                              {time}  1915

  They are showing up in emergency rooms, they are driving up the cost 
of insurance policies, and the hospitals pass that on to insurance 
policies, insurance policies pass it on to businesses, and businesses 
now pass it on to employees. And those two factors, controlling the 
cost of drugs and insuring the uninsured, would literally be taking the 
steam out of the pipe as it relates to health care inflation. If we do 
that, we will see immediately the health care tax alleviation for our 
middle-class and working-class families all across the country.
  I applaud the bipartisanship and look forward to working with the 
gentleman on this. Hopefully, we will get an opportunity to offer an 
amendment to the prescription drug bill when it is down here on the 
floor, because it is going to be essential in making sure that whatever 
dollars we spend of the taxpayers, that we stretch those dollars to the 
greatest possibility. I think the American people, if they knew that we 
had the opportunity to offer an amendment bringing free market 
principles, competition to this debate, to make sure that they got a 
return on their dollar of investment, to make sure that the 
pharmaceutical companies could not prevent other choices from coming to 
market, be they from overseas or in the generic area, they would 
applaud our work, Democrats and Republicans and Independents alike; 
people north, south, east and west would applaud us, because we would 
be coming around a common set of values that we all can agree on. So 
there will be places that we disagree, but on these there is 
bipartisanship. So that would be my hope. I think we will be successful 
if we can come together in this area, work together, make sure the 
principles of the free market and our values are reflected in what we 
pass.
  So again, I want to applaud the gentleman for introducing this, 
bringing this to my attention, although I have talked to many people 
about it but, most importantly, being open to working together across 
party lines so we can represent the people we came here to, not only 
vote on their behalf, but to give voice to their values.
  Mr. GUTKNECHT. Mr. Speaker, just one last comment, and I thank the 
gentleman for this Special Order tonight. As we mentioned earlier, this 
is not a matter of right versus left, this is right versus wrong. It is 
simply wrong to make American consumers pay the world's highest prices 
for drugs which largely the American taxpayers helped develop in the 
first place.
  The gentleman mentioned one other thing, and I think it is a very 
serious concern. Some people are saying, well, through these plans in 
Medicare, we will squeeze down the prices, but if we do not do 
something to bring market forces to bear on the overall cost of 
prescription drugs, what may well happen is the price for these 
prescription drugs will go up even more for those 41 million Americans 
that are currently uninsured. They are the ones who have to pay cash, 
they are the ones whose kids get sick with tonsillitis or ear 
infections or conjunctivitis, and they need those prescriptions as 
well.
  So this is not just about helping to keep down the price of 
prescription drugs for seniors; it is for all consumers and 
particularly for those uninsured or partially insured Americans who pay 
the world's highest prices. Hopefully, on a bipartisan basis, we will 
ultimately begin to get at those issues, whether it is the whole issue 
of importation of prescription drugs or bringing the generics to market 
faster

[[Page H5459]]

so that Americans have those drugs at affordable prices.
  But again, this is not a partisan issue as far as I am concerned. I 
look forward to working with the gentleman and other Members on the 
other side of the aisle because ultimately we owe it to every American 
to make certain that we get fair prices for the drugs that they 
desperately need.
  Mr. Speaker, I thank the gentleman from Illinois (Mr. Emanuel) for 
this Special Order.

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