[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[House]
[Page 22490]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   AFFORDABLE PRESCRIPTION DRUGS ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio (Mr. Brown) is recognized for 5 minutes.
  Mr. BROWN of Ohio. Mr. Speaker, last week the Office of Personnel 
Management announced that premiums for the Federal Employees Health 
Plan would increase by 9 percent next year, the third straight year of 
large increases.
  On January 1, Medicare managed care plans in this country planned to 
drop 395,000 senior citizens from their plans. Last year 400,000 were 
dropped. Most of the remaining plans are curtailing or terminating 
prescription drug benefits.
  Those are the numbers. Here are the stories.
  Last month I received a letter from a 71-year-old widow in Sheffield 
Lake, Ohio, who had taken a part-time job to help pay for her 
prescription drugs.
  Until United Health Care pulled out of her county and left her 
without a health plan, she had some drug coverage. But just one of her 
medications, lipitor, absorbed most of her entire benefit.
  I recently spoke with a woman in Elyria, Ohio, who spends $350 out of 
her $808 a month Social Security check on prescription drugs.
  What is the common thread here? The high cost of prescription drugs.
  Prescription drug spending in the U.S. increased 84 percent in the 
last 5 years. We have spent $51 billion in 1993. Last year we spent $93 
billion.
  According to the Office of Personnel Management, two factors caused 
the steep FEHB premium increases. One of those factors is technology. 
The other is the mushrooming cost of prescription drugs.
  According to GAO, HCFA, and market analysts, one of the key reasons 
Medicare HMOs fail to turn a profit and drop so many seniors is they 
underestimated how much it would cost to cover the cost of prescription 
drugs.
  I receive letters every day from seniors who cannot stretch their 
Social Security check far enough to cover prescribed medications. Some 
of the increased spending derives from expanding use of prescription 
medicines. But according to most analyses, two-thirds of the increases 
are attributable to price inflation.
  The American public is right to wonder why is Congress not doing 
something about that. The simple reason is our threats from the drug 
companies. The drug companies say, if you do not leave drug prices 
alone, we will not produce any new drugs anymore.
  I believe it is time that we use market forces, by that I mean good 
old-fashioned American competition, to challenge that threat. We can 
introduce more competition in the prescription drug market and still 
foster medical innovation. We need information from the drug companies 
to go explore industries' claim that U.S. prices are where they need to 
be.
  The bill I introduced today, the Affordable Prescription Drug Act, 
lays out the groundwork we need to do both. Drawing from intellectual 
property laws already in place in the United States for other products 
in which access is an issue, pollution control devices under the Clean 
Air Act are one example, this legislation would establish product 
licensing for essential prescription drugs.
  If a drug price is so outrageously high that it bears no resemblance 
to pricing norms for other industries, the Federal Government could 
require drug companies to license their patent to generic drug 
companies. The generic companies could then sell competing products 
before the brand name patent expires, paying the patent holder 
significant royalties for that right. The patent holder would still be 
amply rewarded for being the first in the market, but Americans would 
benefit from competitively driven prices when there would be two or 
three or four sellers in the marketplace.
  Alternatively, a prescription drug company could in fact lower their 
prices, which would preclude the Federal Government from finding cause 
for product licensing. Either way, high drug prices come down.
  The bill requires drug companies to provide audited detailed 
information on drug company expenses.
  This is not some brand new, untried proposal. Product licensing is 
done in France. It has been done in Canada. It is done in Germany. It 
is done in Israel. It is done in England.
  Let me leave my colleagues with this: Through the National Institutes 
of Health, American taxpayers finance 42 percent of the research and 
development that generates new drugs, 42 percent. The private 
foundation and State and local governments and other non-industry 
sources kick in another 11 percent. That means prescription drug 
companies account for half the money in research and development of new 
drugs.
  The Congress has given drug companies generous tax breaks on the R&D 
dollars that they do shell out. And yet, we pay the highest prices in 
the world in this country, sometimes two or three or four times the 
price for prescription drugs that people pay in any other country in 
the world.
  Drug companies, and luck for them, drug companies score a triple-
double. Congress gives the drug companies huge tax breaks. Taxpayers 
pay most of the cost for research and development. And yet, the drug 
companies charge Americans the highest price in drug world. Go figure. 
Drug company profits outpace those of every other industry by at least 
five percentage points.
  Mr. Speaker, I ask the Congress to pass the Prescription Drug 
Affordability Act.

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