[Congressional Record (Bound Edition), Volume 145 (1999), Part 15]
[House]
[Pages 22278-22284]
[From the U.S. Government Publishing Office, www.gpo.gov]



                  THE HIGH COST OF PRESCRIPTION DRUGS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Maine (Mr. Allen) is recognized for 
60 minutes as the designee of the minority leader.
  Mr. ALLEN. Mr. Speaker, I want to say, first of all, after listening 
to my colleagues from North Carolina, that the rest of us in this 
Chamber feel deeply about the plight of so many people in North 
Carolina who have suffered greatly through Hurricane Floyd and the 
resulting floods. No area of the country, Mr. Speaker, has been hit as 
hard even though people all up and down the East coast have suffered 
from this tragedy, and I know that I and other colleagues of mine are 
determined to do what we can to make sure that North Carolinians get 
the kind of assistance that they need and deserve after this tragedy.
  We are here tonight to talk about another situation that calls for 
action by this Congress, and that has to do with the high cost of 
prescription drugs for seniors in this country. Thirty-seven percent of 
our seniors in America have no coverage at all for their prescription 
drugs. To be sure, they are on Medicare, which is a Federal health care 
program; they are all on Medicare. But Medicare does not provide for 
prescription drug coverage; and so many people are struggling, trying 
to figure out how to pay the electric bill or the rent or buy food and 
still take the drugs that their doctors tell them they have to take.
  I started hearing about this issue shortly after I was elected to 
Congress, and whenever I talk to seniors groups I might start out 
talking about Medicare reform or Social Security reform, but pretty 
soon we wound up talking about prescription drugs because it was a 
daily worry for so many people who thought that when they retired they 
would have enough money to make ends meet. But many of them do not.
  I have had people write to me and say that between themselves and 
their husband they have $600 a month in prescription drug expenses and 
they only have $1300 or $1350 in a Social Security check. The math does 
not work; they cannot do it. I have had women write to me and say I do 
not want my husband to know, but I am not taking my prescription 
medication because he is sicker than I am, and we cannot both afford to 
take our medications.
  So last year when the Democratic staff on the Committee on Government 
Reform and Oversight came to me and said we would like to do a study 
for you of some kind in your district to call attention to a problem or 
to deal with an issue that you think needs attention, I asked them to 
do a study on prescription drugs, and the results were astonishing.
  What we found is that for the 5 or the 10, makes no difference, for 
the 5 most commonly prescribed prescription drugs for seniors, seniors, 
on average, pay twice as much for their medications as the 
pharmaceutical company's best customers. The best customers are HMOs, 
hospital chains, and yes, the Federal Government itself.
  And let us take a look before turning to some of my colleagues who 
are here with me tonight, let us just take a look at the chart which 
shows a comparison between the average retail price that older 
Americans pay in my First District in Maine compared to the prices that 
the drug companies charge their most-favored customers. Whether you 
pick Zocor or Norvasc or Prilosec or Procardia XL or Zoloft, in any 
event, when you add those up, the average price differential in my 
district when this was taken last year is over 100 percent. Seniors are 
paying twice as much for their drugs as the drug company's best 
customers.
  A subsequent study showed that seniors in Maine pay 72 percent more 
than citizens in Canada for the same drugs, same amount, same quantity, 
and they pay 102 percent more than Mexicans do for their medications, 
same drug, same quantity, same quality.
  That study has now been replicated in a number of areas around the 
country, and with me tonight are the gentleman from Texas (Mr. Turner) 
who has done a lot of work on this issue, been a leader on the 
prescription drug issue, and the gentlewoman from Florida (Mrs. 
Thurman) who has had a study done in her district and is working hard 
to make sure that seniors get the kind of coverage they deserve.

                              {time}  2100

  Before turning over to the gentlewoman from Florida (Mrs. Thurman), I 
would say as a result of these studies we all worked together and 
developed legislation called the Prescription Drug Fairness for Seniors 
Act, H.R. 664, which has 125 cosponsors in the House. This is a bill 
that creates no new Federal bureaucracy. It involves virtually no 
expense to the Federal Government, but it puts the Federal Government 
on the side of seniors on Medicare; in fact, all Medicare 
beneficiaries.
  Basically, the Federal Government would negotiate reduced prices for 
seniors as a block. The legislation is very simple. It allows 
pharmacies to buy drugs for Medicare beneficiaries at the best price 
given to the Federal Government. We think this would probably lead to 
price reductions for seniors in their prescription medication by up to 
40 percent, at virtually no cost to the Federal Government, with no new 
Federal bureaucracy.
  This is a bill that is simple, cost-free, but the opposition is 
unbelievable. We will get into the opposition and the big money 
opposition that is trying to stop this legislation.
  I would now like to yield to the gentlewoman from Florida (Mrs. 
Thurman), who has been working very hard

[[Page 22279]]

to make sure that her constituents in Florida get the benefit of the 
kinds of reduced prices for seniors that we know we can achieve.
  Mrs. THURMAN. Mr. Speaker, I would like to thank the gentleman from 
Maine (Mr. Allen), first of all, for yielding time but also for his 
leadership on this piece of legislation. I think many of us would like 
to kick ourselves because the idea is so easy that we did not think of 
it before he arrived here. It is so simple in the fact that we do this 
in other parts of our government already. We do it in the Veterans 
Administration. They actually go out and use their force of being large 
buyers for medicine and they are out there and they are actually 
contracting with the pharmaceutical companies a reduced price for 
veterans in this country because they have so many people that they can 
negotiate for; no different than an insurance company does, no 
different than an HMO does, no different than, quite frankly, in 
another part of our government that is already doing this in the State 
of Florida, Medicaid does it. No different.
  It is just these are people that are covered by an insurance that the 
government actually has control over.
  So when the gentleman from Maine (Mr. Allen) brought up this issue in 
Maine, some of us went to the committee and said we would like to look 
at those same issues within our districts. So we used the same 
medicines. We talked with chain stores. We talked with our private 
pharmacists and asked them to give us some ideas of what these costs 
were. Basically, we had the same kind of results.
  Now, something, though, that I think is so important in this issue is 
these are drugs that are life sustaining. These are not drugs that are 
something that a person does not have to have. They are not vitamins. 
They are not these type of things. For many people these are life-
sustaining. I mean, we are talking about cholesterol. We are talking 
high blood pressure. We are talking heart problems. All of these issues 
become so passionate to these folks, and it is not just about whether 
they can choose between food or not. These people are also doing some 
damage to themselves in the fact that they might, in fact, take only a 
half a pill for the day or they may take their prescription three times 
a week instead of five times a week. So what we end up doing by not 
having any kind of coverage at all is we are actually promoting 
sickness within the most vulnerable part of our population because 
without them taking this medicine, they become sick; they go into the 
hospitals, and the next thing we know we have Medicare even picking up 
a higher cost for these drugs and for these seniors.
  So we did the exact same thing. Mine is even different from Maine, 
which actually astonishes me. The same drug companies, the same folks 
we are trying to cover, same drugs, same companies, whole thing and we 
have in some cases as much as a difference for those people who in fact 
get to be a preferred customer, who are those folks that happen to have 
insurance, actually end up with ours with Zocor was like $34.80 for 
their preferred customer and the average price for the senior that has 
no coverage is $103.19. That comes out to 197 percent difference in 
cost.
  If we look at ulcer medicine, $59.10 for preferred customers compared 
to $115.71; high blood pressure, $59.71 as a preferred customer to 
$115.41, 93 percent difference; heart problems, $68.35, average price 
for seniors, $129.45; depression, $115.70 compared to $216.44 for the 
seniors. That is 87 percent. Overall, the price differential becomes 
112 percent.
  The gentleman from Maine (Mr. Allen) referred to an issue dealing 
with Mexico and Canada, but before I go into that, because those 
numbers are just as astonishing, I think the gentleman from Texas (Mr. 
Turner) has some letters and some things that actually kind of sum up a 
lot of how these people are feeling, and then once they find out what 
is happening to them by the drug companies they are saying, wait a 
minute, why am I not a preferred customer? I am part of the 39 million 
people who are on Medicare. My government should use its full faith and 
credit to give me the same opportunity to have my government negotiate 
with pharmaceutical companies just like we give the opportunity for 
everybody else in this country.
  This is such a passionate issue.
  Mr. ALLEN. It should be a matter of some passionate concern for all 
of us because our seniors out there are not getting by, a great many of 
them.
  Mr. Speaker, I yield now to the gentleman from Texas (Mr. Turner), 
who has been battling away on this issue since the middle of last year 
and has really done yeoman's work as far as making sure that the people 
in his district and really around the country understand the effect 
that these high prices are having on seniors and what we need to do 
about it.
  Mr. TURNER. Mr. Speaker, will the gentleman yield?
  Mr. ALLEN. I yield to the gentleman from Texas.
  Mr. TURNER. Mr. Speaker, I really appreciate the leadership that the 
gentleman from Maine (Mr. Allen) and the gentlewoman from Florida (Mrs. 
Thurman) have given to this issue. It seems like this is an issue that 
continues to gain momentum.
  I know we have been talking about this issue for well over a year, 
when we first introduced the legislation in the 105th Congress and then 
we came back with the gentleman from Arkansas (Mr. Berry), reintroduced 
it in the 106th, and it is good to know that we now have over 125 that 
have joined with us. I have full confidence that that number will 
continue to grow because this is not an issue that is hard to explain.
  The American people and our senior citizens understand full well that 
the price of prescription drugs are too high.
  I brought with me tonight a few letters that I have just received in 
just the last few weeks, a continuation of mail that all of us get 
about this subject, particularly from our senior citizens. It is an 
issue that hits real close to home. In fact, the first time that we 
introduced this legislation in the 105th Congress I went around to 
pharmacies all across my district and I went there because pharmacists 
have understood this problem for years. They have even fought the big 
drug manufacturers in court, with little success, I might add, trying 
to end the practice of price discrimination that was exhibited on the 
charts by my colleagues here tonight.
  I met with a lady in Orange, Texas, that I will never forget. She 
became the subject of a newspaper article in the Houston Chronicle. Her 
name is Frances Staley, a lovely lady, 84 years old and blind. She came 
to my little meeting there at the pharmacy because that is where she 
trades and she heard I was coming to town. She just came by to say how 
much she appreciated the efforts we were making in the Congress to try 
to hold down the cost of prescription drugs. She spends most of her 
Social Security check every month on her prescription medication. She 
takes 14 different medicines. She told me that she really hoped that we 
could pass this bill. It would mean a lot to her.
  This bill is not only for Mrs. Staley. It is for people like Joe and 
Billie O'Leary in Silsbee, who recently wrote me about the fact that 
they spend more than $400 a month on prescription medications. It is 
about folks like Archie and Lena Davidson of Vidor who came up to me in 
a town meeting that I had just in the month of August. I went around to 
70 of my communities and at every stop I talked about this issue. These 
folks knew I was coming and they brought by a computer printout of 
their prescription drug bill that they had incurred at their local 
pharmacy since January. It is just shocking to look at the expenses 
that they have incurred; $3,526 for both Mr. and Mrs. Davidson since 
the first of the year. They said they really hoped that we could pass 
this bill.
  Another couple that wrote me recently, Charles and Louise Ashford, 
spend $370 every month for 7 prescription drugs. They wrote a very long 
letter that really said a whole lot about the importance of this issue 
to our senior citizens. They wrote, and I want to read a part of their 
letter, most of the

[[Page 22280]]

elderly have several ailments that require several prescriptions per 
month. The best and latest treatments for some ailments and diseases 
are priced out of the range for many of us on Medicare. Some treatments 
are available only for those who can afford it. I have found the 
problem is not that the older people want free medicine. They want 
medicine priced reasonably so they can afford it. What good is research 
and finding cures for diseases if a larger part of our population 
cannot afford the medicine for the cure? I feel our government has 
failed the elderly and those in bad health in this country for not 
capping the price of medicine. Some of the most wealthy people in the 
world are those owning pharmaceutical companies. They are allowed in 
the U.S.A to charge whatever for their medicine. That should be 
medicine that should be available at a reasonable price. We all know 
that the same medicines are cheaper in Canada and Mexico. Many of our 
elderly are widows whose husbands worked when wages were much lower 
than now and do not get much of a retirement check or Social Security. 
They write, I think some of our legislators have lost touch with 
reality if they are not aware of the high cost of medicine.
  Mrs. O'Leary said in her letter that she and her husband are rather 
healthy. They do not take heart medicine, stroke medicine, cancer 
medicine but they still spend close to $100 every month for her 
medications and over $300 a month for her husband's. She wrote, the 
people who are having to pay the high costs are the ones least able to 
pay. Let us be fair to all. Please, she writes, try to cap the prices 
pharmaceutical companies are allowed to charge. Then we can all afford 
to pay for our own medicine.
  Listen to the closing paragraph, which I think kind of says it all 
from our senior citizens. She writes, our generation worked hard. We, 
through our taxes and our efforts, helped pay for schools, public 
buildings, highways, bridges and helped pave the way for those now 
young. In the prime of our lives we fought in the wars for this country 
and to keep our country free. We believe our country is big enough, 
with all of the resources, to provide reasonable health care and 
affordable medicine for all.
  That is the message that this Congress needs to hear, and I really do 
think that it is time for more of our colleagues to join with us to 
address this very, very serious problem.
  Mrs. THURMAN. Mr. Speaker, will the gentleman yield?
  Mr. ALLEN. I yield to the gentlewoman from Florida.
  Mrs. THURMAN. I would say to the gentleman from Texas (Mr. Turner), 
to go back to the letter, that kind of goes into this segment about 
what has happened with the U.S. and Canada and Mexico, and I know the 
gentleman from Maine (Mr. Allen) has a scenario that actually happened 
in his district and then we have, again, the studies that have been 
done for and showing the differences between Canada, Mexico and our 
districts, which are, again, I think, pretty profound in the 
differences. Maybe just a few of them, again, use the same drugs; 
Canada's price for Zocor was $46.00. Mexican price was $67.00, and 
Florida's price was $103.00. It goes down the same way all the way 
through there again. It is the same thing. We are paying more. We 
actually pay about 81 percent difference in Florida from Canada and 
about 79 percent difference from Mexico.

                              {time}  2115

  So we think that is interesting.
  Mr. Speaker, it just seems to me that when we talk about this issue, 
because we have these border States, and people are very aware of what 
is going on in other countries and the cost of this medicine, it even 
makes it more profound, and as the gentleman has seen in his own 
district what is going on, again, it is just another example of what 
these folks are feeling.
  The second thing that I would point out is that when she talks about 
the fact that we have enough money to do this, this is exactly what the 
gentleman from Maine (Mr. Allen) said, and what we have talked about in 
all of our meetings of this, this is budget-neutral. If we just did 
this, with no cost to the Federal Government, staying within the idea 
that we are trying to keep our budgets balanced, we are still talking 
40 percent that could be reduced for these drugs without any kind of a 
benefit.
  Mr. TURNER. Mr. Speaker, I have always thought that that was one of 
the best things about this piece of legislation, because it simply asks 
for fairness in drug pricing. It has no cost to the Federal Government. 
Ms. O'Leary referred to the fact that she felt we ought to cap drug 
prices. Well, actually, we do not even cap drug prices in this 
legislation. We simply say to the big drug manufacturers, it is time to 
stop the kind of discriminatory pricing practices that we have 
exhibited through these studies.
  I have had many pharmacists tell me that they are really very proud 
of what we are trying to do because as most of us know, particularly 
those of us who live in rural areas, independent pharmacists are a 
dying breed. Many people wonder, why is the drugstore on the corner no 
longer there. Well, the reason is the subject we are talking about 
tonight, because the big drug manufacturers have put them in a very 
difficult financial position by charging the wholesalers they have to 
buy from higher prices than the big drug manufacturers charge the big 
HMOs and the big hospital chains; and that price discrimination has 
worked to the disadvantage of any individual who shops in a local 
pharmacy in their hometown. Mr. Speaker, 60 percent of all prescription 
drugs are purchased by senior citizens, so the bottom line is those 
least able to pay in our society are being asked by the big drug 
manufacturers to pay the highest prices of anyone.
  I had an e-mail from a pharmacist just a few days ago. He said, 
``Dear Congressman Turner, I am pleased to see you are making efforts 
to address the high cost of prescription medications for our senior 
citizens. Being a registered pharmacist for 20 years, and having 
parents in the targeted age group, I am very aware of this problem.''
  So our pharmacists know what has been going on, and our senior 
citizens are beginning to understand that it is the big drug 
manufacturers that are causing them to pay much higher prices than they 
should be paying for prescription drugs.
  I yield to the gentleman from Maine (Mr. Allen).
  Mr. ALLEN. Mr. Speaker, I appreciate the gentleman's comments, 
because I think they are completely accurate in terms of how we analyze 
this particular problem. We have been talking about the problem tonight 
and what our seniors are going through, and I thought it would be 
worthwhile to come back to the legislation just for a moment and talk 
about the prescription Drug Fair necessary for seniors act, H.R. 664.
  What we have done here is outlined the principal points of this 
legislation. It allows pharmacies to buy drugs for Medicare 
beneficiaries at the best price given to the Federal Government. That 
may be a price that the Federal Government negotiates through the 
veterans administration or through Medicaid or some other program.
  In other words, what it really does is give seniors the benefit of 
the same discount received by hospitals, big HMOs, and the Federal 
Government itself. As we have said, it does not increase Federal 
spending, it does not establish a new Federal bureaucracy, and it would 
reduce prescription drug prices for Medicare beneficiaries by as much 
as 40 percent.
  So why is not everyone on this bill? That has to do with the nature 
of the pharmaceutical industry, with the role of money in politics, and 
we will get to that. But first, I think we could agree that there is 
another kind of proposal out there which is also needed, and I know all 
of us support, and that is a prescription drug benefit under Medicare. 
A discount is not enough; we need a benefit under Medicare as well, 
because even with this discount, there will be those who still struggle 
to pay for their prescription drugs.
  What is then interesting about the pharmaceutical industry is it 
opposes,

[[Page 22281]]

it opposes the discount approach; it opposes a prescription drug 
benefit under Medicare unless, they say, unless Medicare is changed 
dramatically, unless Medicare essentially is turned over to HMOs.
  Let us talk for just a moment about this chart.
  We have talked about seniors who can barely afford to buy their 
prescription drugs, some who cannot afford to buy their prescription 
drugs, some who take one pill out of three or skip whole weeks entirely 
when they seem to be feeling relatively good. No doctor would recommend 
that course of treatment.
  On the other side of this struggle is the pharmaceutical industry. 
Now, the interesting thing about the pharmaceutical industry which 
claims that if this legislation passed they would not be able to do 
research and development at the same level and seniors would be hurt 
and new drugs would not be developed, is that when we look at all of 
the industries in this country, all of them, this is the single most 
profitable industry in the country.
  In this Fortune 500 analysis, the pharmaceutical industry is first in 
return on revenues, first in return on assets, first in return on 
equity. In other words, to simplify it, no matter how we calculate 
profits, this is the most profitable industry in the country, and the 
problem we are talking about is real simple.
  The most profitable industry in the country is charging the highest 
prices in the world to people who can least afford it. That is why we 
are here; that is why the system has got to change, and that is why we 
are doing everything we can to make sure that it does change.
  Mr. TURNER. Mr. Speaker, if the gentleman will yield, I just want to 
follow up on the gentleman's comment about the big drug manufacturers' 
opposition to having any prescription drug coverage under the Medicare 
program. I think it is pretty apparent to those others who have studied 
this issue a little while why they have such strong opposition. They 
know that if we ever have a prescription drug coverage under Medicare, 
the Government is not going to pay those exorbitantly high prices that 
our senior citizens are having to pay today in their local pharmacies.
  So they are afraid of any suggestion that there be any coverage for 
prescription drugs under Medicare, and the truth of the matter is, the 
problem that we have addressed in this legislation could be solved by 
the big drug manufacturers themselves. In fact, we know that most of 
our senior citizens understand that even the Government gets cheaper 
prices than they do. The Government is a big purchaser.
  We buy prescription drugs for our veterans that are prescribed for 
them through the Veterans' Administration health care programs, and if 
we could just get those kind of prices for our senior citizens, we 
could see prices go down 30 and 40 percent. So the big drug companies 
know that their pricing practices over the last few years, which have 
gotten worse and worse and worse in terms of the discriminatory nature 
of them, has been the cause of the legislation we have brought forward. 
If they really did what is right, they could solve the problem 
themselves, because they are the ones that set these discriminatory 
prices, which has resulted in our seniors paying the highest prices of 
anyone.
  Mr. ALLEN. Mr. Speaker, the gentleman is absolutely right. No one 
here created this price structure; the industry created this price 
structure. They have just decided that they are going to get whatever 
they can out of Canadians and Mexicans and HMOs and hospitals, and then 
they have decided that they would set prices so that the highest prices 
in the world are paid by seniors, especially those seniors who do not 
have any coverage for their prescription drugs, and that is 37 percent 
of all of the seniors in the country. And there is another 8 percent 
with really inadequate coverage.
  Mrs. THURMAN. If the gentleman would yield, that probably is going 
down, or that number is going up, because we have now just seen over 
the past couple of years the draw-out of the Medicare Plus programs, 
which are the HMO, Medicare programs that, in fact, had some kind of a 
prescription drug benefit, and many of those are being taken out of a 
lot of counties these days across this country. So we could potentially 
see that number go up.
  I think we ought to talk about this when we get into this opposition. 
We now have the facts out; we know that they are first in every 
possible way we can slice it, and then what happens to us is we get 
these comments being made to us: well, you know, if you do this, we are 
going to stop research, and we are going to stop people having a longer 
life because we won't have the research out there for this medicine, 
biotech. All of these folks are giving us these scare tactics. I think 
if either of the gentlemen can respond to this, or I certainly can, to 
kind of keep this going in a dialogue here, it is amazing what we found 
out with what happened in 1984 and what happened again in 1990 when 
some of these issues were brought up.
  I yield to the gentleman from Texas, Mr. Turner.
  Mr. TURNER. Mr. Speaker, our Prescription Drug Task Force that we all 
serve on, we had a meeting a few months ago where we had a presentation 
from a gentleman who had done extensive research at a respected 
university regarding the pricing practices in other countries, and it 
was interesting to note that we in the United States were the only 
country in the entire developed world that does not have some restraint 
on pricing practices of big pharmaceutical companies.
  Well, that being the case, I guess it should be no surprise to us 
that we in the United States are paying the highest prices of anyone in 
the world for prescription drugs. I think there is going to come a 
point in time, and I think it is coming sooner than later, that the 
American people are going to rise up and they are going to say, we are 
tired of it. We are tired of subsidizing the prescription drug 
purchases of everybody else in the world, and we want some prescription 
drug fairness.
  So when we are looking at the data that clearly shows us that there 
is price discrimination worldwide working to our disadvantage and price 
discrimination within our own country, that is resulting in everyone at 
the retail pharmacy level paying the highest prices of anyone, I think 
it is time to wake up and for us to do something about it.
  Mr. ALLEN. Mr. Speaker, we probably should talk for a moment about 
the nature of the opposition and what is happening right now.
  Well, several things. People have probably noticed a set of 
television ads running all across this country featuring Flo. Flo is a 
bowler, and in these ads, she is urging us all to pay attention to what 
is going on in the debate on this issue and making it clear, as she 
said, that ``I don't want big Government in my medicine cabinet.''
  Now, if we want to know who pays for Flo, it is some group called the 
Citizens for Better Medicare. Well, here is one, here is a full-page ad 
run in a local paper here in Washington, and Flo is featured in 
television ads. Citizens For a Better Medicare is delivering a message, 
and that message is, we want the right kind of Medicare reform, and 
only the right kind of Medicare reform.
  Mrs. THURMAN. Mr. Speaker, if the gentleman will yield, do we know 
who is paying for these ads?
  Mr. ALLEN. We do, Mr. Speaker. Guess who is paying for them? It turns 
out it is the pharmaceutical industry. Is that not surprising?
  What has happened is the coalition, it is called Citizens for Better 
Medicare, it includes the National Association of Manufacturers, the 
United States Chamber of Commerce, the United Seniors Association, and 
the National Kidney Cancer Association. The executive director of this 
coalition, until just recently, was working for PRMA, the 
Pharmaceutical Research and Manufacturers of America. That is the 
industry association for the pharmaceutical industry.
  In this recent story, a person named Martin Corey, who works for 
AARP,

[[Page 22282]]

was criticizing these advertisements and I quote what he said in this 
article in The New York Times.

                              {time}  2130

  He said, ``This phony coalition, created and financed by the 
pharmaceutical industry, is what we have come to expect from drug 
companies over the last decade. Fundamentally, they are in favor of the 
status quo, which leaves millions of older Americans without drug 
coverage.''
  Now, I know that the gentlewoman from Florida (Mrs. Thurman) has some 
points to make, but we really need to understand the role of money in 
politics. What the pharmaceutical industry is doing is taking this, and 
this is an industry that is near the top in lobbying contributions, it 
is near the top in campaign contributions, both money to candidates and 
soft money to the national parties. Now they are running up to a $30 
million national media campaign basically to make sure that no discount 
approach is enacted and no Medicare prescription drug benefit is 
enacted by this Congress. This industry wants the status quo, or, 
alternatively, it wants to turn over Medicare to HMOs.
  I say to the gentlewoman from Florida (Mrs. Thurman), she was just 
pointing out that as recently as July 1, 340,000 people in Medicare HMO 
plans were simply dropped by the plans because it was not economically 
profitable to cover them, just dropped. Millions of other Americans who 
were in these Medicare managed care plans are having their prescription 
drug benefits cut arbitrarily because the company is not making enough 
money, so they cut the prescription drug benefits. That is not a system 
that works for our seniors, and that is why we need to change it.
  Mr. Speaker, I yield to the gentlewoman from Florida (Mrs. Thurman).
  Mrs. THURMAN. I absolutely agree, Mr. Speaker. I do want to go back 
to this issue, because it kinds of goes along with Flo and others out 
there, other kinds of ads we are hearing about research.
  One of the things she mentioned in the very beginning was, I could 
not walk without pain, but thanks to new medicines, which gives us the 
connotation that there are not going to be any new medicines out there.
  What we have found in some of this research was that in 1984 there 
was a piece of legislation called the Waxman-Hatch bill that in fact 
the pharmaceutical companies came in and said, you cannot do this 
because we are going to increase the availability of generic drugs, and 
if you do that, we are going to have more competition between brand 
name drugs, and we are going to have to cut research and development.
  In those years, if I remember these correctly, it went from $4.1 
billion to $4.4 billion in that period of time from 1984 to 1990. Then, 
in 1990, we did a rebate program. In the rebate program, again the 
pharmaceutical companies came up and said, oh, no, you cannot do that, 
cannot do that. We are not going to be able to have research and 
development.
  Since 1990, we now went from $8.4 billion to $18.9 billion. But there 
is some more interesting information that has to go with that, and this 
cannot be overlooked. First of all, in the last four appropriations in 
the Congress for NIH, the funding in NIH has gone up more than any 
other budget in this country, by 5, 6, 7 percent, because we understand 
and believe there needs to be an investment in research. We understand 
that. We are not closing our eyes to the fact that we want good 
research in this country.
  Now, who is the recipient of this research? Who is the one who gets 
the contract after we give NIH the money to do the research? 
Pharmaceutical companies, can Members imagine? So they are actually 
taking some of the government money we are giving them for research and 
using it.
  The problem is, we never get any of that money back. No, they get a 
patent, and in that patent we extended it for 20 years, so we cannot 
even have any competition for these folks. So we have a pharmaceutical 
company that gets part of their funding from NIH.
  I happen to have a huge university in my district, the University of 
Florida, a teaching hospital. They are wonderful. They do great 
research. They have had on-the-cusp engineering research kinds of 
things they have done in medicine. They, too, then are helpful to the 
pharmaceutical companies.
  So it is not like they are having to come up with this research money 
on their own, they are actually getting help from their government, 
they are getting help from their university systems, both public and 
private, and they reap all of the benefit, and, according to the 
gentleman's chart over there, all of the profits.
  Then they come to us and say, oh, you cannot do any of this. We are 
going to keep gouging the most vulnerable people. I do not get it. I do 
not know why our colleagues are not on this piece of legislation, 
because this is just perfect kinds of stuff that prove that over and 
over again it becomes a spin game and who is going to win.
  I do not have $30 million to do an advertising campaign. The only 
voice that I have is the voice that was given to me as an elected 
official, and that is to bring this to the floor of the House to raise 
the consciousness level of this country and have them understand why 
this issue is so important, and the unfairness of what is going on in 
these price activities today.
  Mr. TURNER. Mr. Speaker, if the gentleman will continue to yield, I 
thought the gentlewoman brought up a very important point when the 
gentlewoman mentioned the patent law.
  I find it amusing to watch these ads featuring Flo that are paid for 
by the big pharmaceutical manufacturers, and Flo raises her finger and 
she says, I do not want government in my medicine chest. Well, the 
truth is, as the gentlewoman pointed out, government is in her medicine 
chest, because the laws of the United States protect those drug 
companies from competition because we, under law, grant them a 17-year-
patent on their medicines that they are always up here fighting to get 
extended. That law guarantees them a monopoly over the drug that they 
have done the research to create and bring to the market.
  Frankly, I think that is a good law, because the purpose of the 
patent law is to encourage the development of new drugs, new cures, and 
we have seen many of them in recent years. In fact, back when the 
Medicare program was first put in place in the mid sixties, nobody 
thought about covering prescription drugs because it was a very small 
part of our total health care costs. But today prescription drugs are a 
major part of all of our health care costs, and that is why the problem 
we are talking about tonight is such a serious one for senior citizens, 
particularly those who are on fixed incomes.
  I think what I would like to do, if we had the millions of dollars 
that the big drug manufacturers have, I would like to put my 
constituent that I talked about earlier, Ms. Daley from Orange, Texas, 
on TV. She would tell a different story than Flo. Or the lady that I 
read the letter from just a few minutes ago, Ms. O'Leary, I believe she 
could handle herself in debating Flo.
  She is the one that said in her letter, ``What good is research and 
finding cures for diseases if a large part of our population cannot 
afford the medicine for the cure?'' I think the senior citizens of the 
country get it. I really never have paid a whole lot of attention to 
those expensive ads that featured Flo, because I think the people out 
there watching those ads are smarter than that.
  Mrs. THURMAN. If the gentleman will continue to yield, it is not just 
about seniors, Mr. Speaker. When we listen to the families of the 
seniors that are trying to put their kids through college or trying 
just to make a mortgage payment or have a car, who are having to help 
out, they do not want their parents sick. They do not want them to go 
without the medicine that is needed to keep their life sustained. They 
want their parents to be able to enjoy their grandchildren. They want 
them there. It is an important part of our whole family fabric in this 
country.
  But we are denying everybody a chance, then, through the family 
structure to enjoy their parents' last time

[[Page 22283]]

in their senior years. So it goes way beyond just the seniors.
  I went to an editorial board meeting, just about this. It was very 
interesting, because the woman I talked to said to me, she said, I had 
this friend. She did not take her blood pressure medicine, and I asked 
her why. She said, my cat had to go to the veterinarian. As we got 
through the end of it, I found out it was her mother. She said, why 
didn't you call me? I would have gotten your medicine for you? But the 
mother was proud, did not want to take money. She was worried about her 
cat, so that was the decision she made. I know that may not be the 
choice that everybody would make, but certainly it was for her.
  So here is a daughter who is now having to help out or wants to help 
out, it is not even a matter of having to, and not because of those 
reasons, necessarily, but they all go through something like this.
  Mr. ALLEN. The people that we have been talking about tonight, our 
constituents, are real people. Flo is a fake. Flo is a TV ad. Flo is 
someone, a creation of the pharmaceutical industry. Flo means big 
bucks, and what Flo is trying to do is persuade people in this country 
that they do not want any government involvement in Medicare, which is 
a Federal health care program, if it is going to provide either a 
prescription drug benefit or a discount for seniors.
  The gentleman from Texas (Mr. Turner), was saying that, after all, 
the government is involved in her medicine cabinet. The gentleman 
mentioned one way, but there are some other ways. The Food and Drug 
Administration in this country is there to make sure that the drugs 
that are sold by the pharmaceutical industry are, number one, safe, and 
number two, effective; that is, they work. That is what the purpose of 
the Food and Drug Administration is.
  We all want to make sure that continues, because if this industry 
were simply allowed to sell any drug, regardless of whether it had been 
tested and was assured to be safe or whether it was going to actually 
work, we would all be worse off.
  If Flo were a real person, she is one of a minority. She is one of 
the 28 percent of the people in this country who have prescription drug 
coverage through a retirement plan, but the rest of the population does 
not. Thirty-seven percent have no coverage at all. 8 percent have some 
coverage under a MediGap policy, but those are really pretty 
ineffective and not very cost-effective. Then there is 17 percent who 
have some sort of coverage, or used to, under Medicare managed care, 
but as we have seen, managed care companies that serve Medicare 
beneficiaries are cutting back on the benefits, they are dropping the 
limits, increasing the co-pay, or they are just dropping people 
altogether.
  The bottom line, this is about money. The industry is charging the 
highest prices in the world to people who can least afford it. This is 
an industry which made $26 billion last year, $26 billion. Now they are 
spending millions of dollars of that money to try to persuade people in 
this country that we should not have a discount on prescription drugs 
and that we should not have a benefit under Medicare. It is an outrage.
  This system has to change. It is not sustainable. What our seniors 
are spending on prescription drugs is going up 15 percent a year. That 
is one reason the industry is so profitable. Yet, the industry is 
simply saying no to the kinds of changes that would make sure that 
people get the drugs, get the prescription drugs that their doctors 
tell them they have to take.
  Mr. TURNER. If the gentleman will yield, Mr. Speaker, the point the 
gentleman makes about the big drug manufacturers and the involvement 
they already have with government is an important one, because we are 
all very proud of the fact that the FDA, the Food and Drug 
Administration, protects the prescription drugs that we purchase every 
day.
  I think most of us in the last analysis would support the policy of 
granting a patent to our big drug manufacturers to encourage them to 
make the necessary financial investment to come up with new drugs and 
cure serious diseases.
  But it just seems to me that in exchange for that protection under 
the patent law, that the big drug manufacturers owe us at least one 
thing back. That is, fairness in drug pricing. I am a firm believer in 
the free enterprise system. I believe that government ought to stay out 
of the business world as much as possible, because I believe in 
innovation and entrepreneurship.
  But the truth is the free market system that we all believe in is not 
working in the drug industry. The reason it is not working is apparent 
to anyone who looks even glancingly at the problem, because it is our 
patent law that the people of the United States have put on the books 
to encourage the drug companies to develop new, innovative drugs that 
gives them a monopoly.
  We all understand that the free market never works when there is a 
monopoly. So if we are going to protect the big drug companies and 
allow them to make the necessary investments to come up with new cures, 
what they owe us back is fairness in drug pricing.
  I want to make it very clear, and oftentimes our bill, people who 
look at it in the big drug industry, they say, oh, you are fixing 
prices. You are trying to control prices. There is nothing in this 
legislation that controls prices. It simply requires fairness in 
pricing. We simply say that senior citizens ought to be getting as good 
a deal as the best customers of the big drug companies. That is what we 
mean by fairness. We want an end to the discriminatory pricing 
practices of the big drug companies.
  So I do not know how long the big drug companies want to spend 
millions of dollars perpetuating a discriminatory pricing scheme that 
is working to the disadvantage of the most vulnerable segment of our 
population.
  But I will tell the Members this, if they persist, if they persist, 
there is going to be some people in this Congress who are going to look 
real hard at the patent protections that they are given under current 
laws.

                              {time}  2145

  There are people who are going to start asking some serious questions 
about the big multimillion dollar expenditures of the big drug 
companies on lobbying this Congress. There are some people who are 
going to start asking some questions about the substantial political 
contributions that those pharmaceutical companies are making.
  I say that the best advice that I think we can give the big drug 
companies tonight is to listen to the senior citizens of this country. 
They are tired of being taken for a ride. They want fairness in drug 
pricing.
  The drug manufacturers themselves have it within their power, without 
any legislation, to correct the problem, and I hope they will start 
down that road. Because if they do not get there, this Congress is 
going to help them get there.
  Mr. ALLEN. Mr. Speaker, the gentleman from Texas (Mr. Turner) says it 
well, and I want to thank him for his participation tonight and for his 
leadership on this issue along with the gentlewoman from Florida (Mrs. 
Thurman) and so many others in this Congress who are working hard on 
this issue.
  What is striking about where we are, to me, about this legislation is 
that a bill that creates no Federal bureaucracy and involves no 
significant Federal expense and would reduce prices for prescription 
drugs for seniors by as much as 40 percent has not one Republican 
cosponsor, not one.
  Now, when we try to explain that, I drafted this legislation so that 
it would appeal to Members on the other side of the aisle, but not one 
has come over to support this legislation. When my colleagues ask why, 
they have to look at political contributions to the parties and 
candidates.
  The pharmaceutical industry gives overwhelmingly to Republicans 
rather than Democrats. It gives to Democrats as well. My colleagues 
have to ask themselves whether or not it is the role of big money and 
politics that is shaping this debate.
  I believe that we cannot leave this Congress without doing something

[[Page 22284]]

about the high cost of prescription drugs. We need to do at least two 
things. One is to pass H.R. 664, the Prescription Drug Fairness For 
Seniors Act, and one is to get a benefit, coverage for prescription 
drugs under Medicare.
  This country is big enough and strong enough and wealthy enough to 
take care of those seniors particularly who are having a very difficult 
time affording the drugs that their doctors tell them they have to 
take.
  We can do better as a country. We can do much better. But to do 
better means that we cannot let the pharmaceutical industry dictate the 
results. We are not going to allow Medicare to be taken over by HMOs, 
and we are not going to allow the pricing of prescription drugs to 
continue solely at the determination of the pharmaceutical industry. 
There needs to be some countervailing market power.
  All we are saying is that, just as the Federal Government buys toilet 
paper and automobiles and desks and lamps and tries to get the best 
deal for the taxpayer, it should try to negotiate a discount for those 
seniors who are already on a Federal health care plan called Medicare.
  If we do that, if we do that, many more seniors all across this 
country will be able to sleep at night knowing that they can afford 
both their meals and their prescription drugs and their rent, and they 
may just, maybe, have a chance to live out their lives the way they 
thought they could, the way they thought they could when they figured 
out how much they would have for retirement, instead of living in a 
world where every trip to a doctor may mean another $100 a month in a 
prescription drug cost that they simply cannot handle.
  This system does not work. It needs to change. I believe, in this 
Congress, it will be changed.
  Mr. Speaker, I rise today in strong support for implementing 
legislation to substantially reduce the exorbitant prices of 
prescription drugs for Medicare beneficiaries. Our current Medicare 
program drastically fails to offer protection against the costs of most 
outpatient prescription drugs. H.R. 664, the Prescription Drug Fairness 
for Seniors Act of 1999 aims to create an affordable prescription drug 
benefit program what will expand the accessibility and autonomy of all 
Medicare patients. This bill will protect Medicare beneficiaries from 
discriminatory pricing by drug manufacturers and make prescription 
drugs available to Medicare beneficiaries at substantially reduced 
prices.
  Currently, Medicare offers a very limited prescription drug benefit 
plan for the 39 million aged and disabled persons obtaining its 
services. Many of these beneficiaries have to supplement their Medicare 
health insurance program with private or public health insurance in 
order to cover the astronomical costs not met by Medicare. 
Unfortunately, most of these plans offer very little drug cost 
coverage, if any at all. Therefore, Medicare patients across the U.S. 
are forced to pay over half of their total drug expenses out-of-pocket 
as compared to 34 percent paid by the population as a whole. Due to 
these burdensome circumstances, patients are forced to spend more of 
their limited resources on drugs which hampers access to adequate 
medication needed to successfully treat conditions for many of these 
individuals.
  In 1995, we found that persons with supplementary prescription drug 
coverage used 20.3 prescriptions per year compared to 15.3 for those 
individuals lacking supplementary coverage. The patients without 
supplementary coverage were forced to compromise their health because 
they could not afford to pay for the additional drugs that they needed. 
The quality and life of these individuals continues to deteriorate 
while we continued to limit their access to basic health necessities. 
H.R. 664 will tackle this problem by allowing our patients to purchase 
prescription drugs at a lower price.
  Why should senior citizens have to continually compromise their 
health by being forced to decide which prescription drugs to buy and 
which drugs not to take, simply because of budgetary caps that limit 
their access to treat the health problems they struggle with? These 
patients cannot afford to pay these burdensome costs. We must work 
together to expand Medicare by making it more competitive, efficient, 
and accessible to the demanding needs of patients. By investing 
directly in Medicare, we choose to invest in the lives, health, and 
future of our patients. By denying them access to affordable 
prescription drugs, we deny these individuals the right to a healthy 
life which continues to deteriorate their well-being and quality of 
life.
  The House Committee on Government Reform conducted several studies 
identifying the price differential for commonly used drugs by senior 
citizens on Medicare and those with insurance plans. These surveys 
found that drug manufacturers engaged in widespread price 
discrimination, forcing senior citizens and other individual purchasers 
to pay substantially more for prescription drugs than favored 
customers, such as large HMOs, insurance companies, and the federal 
government.
  According to these reports, older Americans pay exorbitant prices for 
commonly used drugs for high blood pressure, ulcers, heart problems, 
and other serious conditions. The report reveals that the price 
differential between favored customers and senior citizens for the 
cholesterol drug Zocor (Zo-Kor) is 213%; while favored customers--
corporate, governmental, and institutional customers--pay $34.80 for 
the drug, senior citizens in my Congressional District may pay an 
average of $109.00 for the same medication. The study reports similar 
findings for four other drugs investigated in the study: Norvase (Nor-
Vask) (high blood pressure): $59.71 for favored customers and $129.19 
for seniors; Prilosec (Pry-low-Sec) (ulcers); $59.10 for favored 
customers and $127.30 for seniors; Procardia (Pro-car-dia) XL (heart 
problems): $68.35 for favored customers and $142.21 for seniors; and 
Zoloft (Zo-loft) (depression): $115.70 for favored customers and 
$235.09 for seniors.
  If Medicare is not paying for these drugs, then the patient is left 
to pay out-of-pocket. Numerous patients are forced to gamble with their 
health when they cannot afford to pay for the drugs needed to treat 
their conditions. Every day, these patients have to live with the fear 
of having to encounter major medical problems because they were denied 
access to prescription drugs they could not afford to pay out of their 
pocket. Often times, senior citizens must choose between buying food or 
medicine. This is wrong.
  Reports studying comparisons in prescription drug prices in the 
United States, Canada, and Mexico reveal that Americans pay much more 
for prescription drugs than our neighboring countries. In 1991, the 
General Accounting Office (GAO) revealed that prescription drugs in the 
U.S. were priced at 34 percent higher than the same pharmaceutical 
drugs in Canada. Studies administered on comparisons between the U.S. 
and Mexico also reveal that drug prices in Mexico are considerably 
lower than in the United States. In both Canada and Mexico, the 
government is one of the largest payers for prescription drugs which 
gives them significant power to establish prices as well as influence 
what drugs they will pay for.
  Many Medicare patients have significant health care needs. They are 
forced to survive on very limited resources. They are entitled to 
medical treatments at affordable prices. H.R. 664 will benefit millions 
of patients each year. This bill will address many of the problems 
relating to prescription drugs and will ensure that patients have 
adequate access to their basic health needs. Let's stop gambling with 
the lives of Medicare patients and support this plan to strengthen and 
modernize Medicare by finally making prescription drugs available to 
Medicare beneficiaries at substantially reduced prices. It is a matter 
of life or death.

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