[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[House]
[Page 16739]
[From the U.S. Government Publishing Office, www.gpo.gov]



     PRICE DIFFERENTIALS IN PRESCRIPTION DRUGS ARE A FORM OF PRICE 
                             DISCRIMINATION

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from West Virginia (Mr. Wise) is 
recognized during morning hour debates for 5 minutes.
  Mr. WISE. Today I am releasing the results of a report that we have 
done, a study that we have done, an international comparison of retail 
prescription drug prices and the rate that West Virginia senior 
citizens pay versus what a citizen would pay in Mexico or Canada for 
the same prescription drug.
  The results are astounding. What we have concluded is that West 
Virginia senior citizens, and incidentally, this is true for all senior 
citizens across the country, West Virginia senior citizens pay 
significantly higher retail prices for prescription drugs than 
consumers in either Canada or Mexico.
  This also applies to other nations as well. We chose Canada and 
Mexico as ones that we could survey easily. For instance, in Canada, 
West Virginia senior citizens will pay, on the average, the average 
retail price difference will be 99 percent more for certain 
prescription drugs than the Canadian citizen will pay. A West Virginia 
senior citizen will pay 94 percent more than a citizen in Mexico for 
the same drug.
  We took five prescription drugs, and these are not generic 
medications, five prescription drugs that are the five patented non-
generic drugs with the highest annual sales to senior citizens in 1997. 
They are Zocor, Prilosec, Procardia XL, Zoloft, and Norvasc.
  If we look at just the top two, Zocor, these are prescription drugs 
that our senior citizens need the most and buy the most. If we look at 
Zocor, the Canadian retail price for the particular dosage is $46.14. 
If we look at the Mexican retail price, $63.15 cents. If we look at the 
West Virginia senior citizen out-of-pocket price, it is $114.48. 
Prilosec, that is $54.87 to the Canadian consumer, $39.47 to the 
Mexican consumer, and $127.34 to the West Virginia consumer.
  So the price differential, once again, between Canada and West 
Virginia is 132 percent, between Mexico and West Virginia is 223 
percent, as illustrated in the chart I have here, with Canadian price 
in blue, the Mexican price in red, and the West Virginia senior citizen 
price in beige.
  We looked at two other medications as well, Synthroid and Micronase. 
We found in those particular cases that West Virginia consumers would 
be paying three times, and in one case as much as nine times, more than 
their Canadian and Mexican counterparts. This simply is not fair, Madam 
Speaker. Senior citizens in West Virginia should not have to go to 
Toronto or Tijuana to do their prescription drug buying. Why is it that 
Zocor costs more for a senior citizen in Martinsburg or Maronette, West 
Virginia, than it does for a citizen in Montreal or Mexico City?
  Two weeks ago I issued a report comparing prices that a West Virginia 
senior citizen would pay versus what the prescription drug companies 
were charging their most favored customers, HMOs, insurance companies, 
and the Federal Government. The results were exactly the same. It does 
not matter where we are, apparently, in the world, maybe in the 
universe, but if you are a West Virginia senior citizen, you are going 
to be paying more out of pocket than the favored customers who 
negotiate lower rates with the prescription drug companies, or even 
consumers in foreign countries.
  I object what some are going to say. They are going to say, but, 
Congressman, the production cost of that medication is different in 
Mexico or Connecticut or wherever else it is being purchased. GAO 
looked at this in 1992 and concluded that production and distribution 
and research and development costs did not account for this large price 
differential; that indeed, it was simply a markup.
  Indeed, I question whether the prescription drug companies are even 
spreading those research and development costs across the entire world 
consumer base. My study shows, and incidentally, let me just thank very 
much the gentleman from California (Mr. Waxman), the ranking member of 
the Committee on Government Reform and Oversight, and his staff who 
provided much of the background and did much of the analysis for this 
study.
  What our study shows, though, is that people who need the 
prescription drugs the most, the senior citizens in our country, and 
who have the least ability to pay end up paying the most. Why? Because 
the prescription drug companies engage in differential pricing. These 
folks, the senior citizens, are the ones who pay out of pocket. They 
are the ones who are paying the bulk of this.
  Mine is not the only report that illustrates this. Look at the 
Canadian Patented Medicine Price Report. I would just say in closing, 
Madam Speaker, that clearly West Virginia senior citizens are paying 
far too much out of pocket for the same prescriptions that their 
counterparts are paying in other parts of the country and the world.

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