[Congressional Record (Bound Edition), Volume 146 (2000), Part 4]
[House]
[Page 5417]
[From the U.S. Government Publishing Office, www.gpo.gov]



    WHAT CAN BE DONE TODAY TO CHANGE THE CURRENT CLIMATE AS FAR AS 
             PRESCRIPTION DRUGS FOR SENIORS IN THIS COUNTRY

  The SPEAKER pro tempore (Mr. Reynolds). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Oklahoma (Mr. Coburn) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. COBURN. Mr. Speaker, I wanted to address the American public and 
Members of the House tonight. I find myself in a minority in 
Washington, both among the Republicans and the Democrats. I am a 
practicing physician that normally practices and sees patients on 
Mondays and Fridays when I am not in Washington, and I see before us a 
situation much like a patient who would come to me with a fever, chills 
and night sweats, and the treatment we are about to give to that 
patient is to tell them to take an aspirin and cover up in a blanket 
and go home and they will get better, when the underlying problem is 
that they have pneumonia. Without totally diagnosing their disease, 
what I have done is committed inappropriate care and have actually 
harmed the patient.
  If one is a senior citizen tonight, I want them to listen very 
carefully to what I am going to explain to them about Medicare, and the 
tack that I am going to take is not necessarily going to be appreciated 
by most of the Members of this body.
  I also happen to be a term-limited Member of Congress. I am not 
running for reelection, and I want to say that in my heart, knowing how 
severe the problems are for my patients with prescription drugs, the 
worst thing we can do for seniors is to add a costly prescription 
benefit drug to the Medicare program.
  I am going to spend the next hour outlining why that is the case and 
why it ignores what the real problems are in the drug industry and the 
physician practices that now many of our seniors find themselves 
involved with.
  I also want everyone to know that Medicare has been abused by the 
Members of this body, the other body and previous Presidents, because 
most workers in this country, as a matter of fact all workers in this 
country except if they are a Federal employee, are paying 1.45 cents 
out of every dollar they earn, no matter how much money they earn, into 
the Medicare part A trust fund.
  As they pay that 1.45 cents, so does their employer. So that is 
almost 3 cents out of every dollar that is earned by every employee is 
paid into the Medicare part A trust fund.
  The Congress, with the consent of the Presidents over the last 20 
years, have stolen $166 billion of that money. What they have done is 
they have put an IOU in there and said we will pay this back some day 
in the future, but they took that money and spent it on other programs. 
They did not say we need to raise taxes to do this good program. They 
did not say we are going to take the Medicare money and spend it on 
this program. They just very quietly took $166 billion out of that 
trust fund for a hospital trust fund and spent it on other programs.
  Now that is not a partisan statement. That is Republicans and 
Democrats alike.
  So we now find that as of 2 weeks ago, that trust fund is going to be 
totally bankrupt by the year 2015.
  Now we had some good news this last week. That has advanced to 2023; 
that is, if we do not do anything with Medicare.
  We know that at least 17 cents out of every dollar that is paid out 
for Medicare is inappropriate. Where is the reform for Medicare? Where 
is the fix to the very program that is supposed to be supplying the 
needs of our seniors?
  I see every day that I am in practice seniors who have a difficult 
time accomplishing what I want them to do as far as their drugs. I see 
seniors, and we have had described tonight, that have to make a choice 
between whether they are going to eat a meal or take a medicine. That 
is not all because there is not a prescription drug benefit because of 
Medicare, and what I want to outline is some of the deeper problems 
that are associated with the pricing of drugs in this country, the 
overprescribing of drugs in this country, the lack of review of drugs 
that seniors are taking in this country, and what we can do about it to 
fix it before we ever start adding another program.
  The reason that that is important, because if we add another benefit 
now the people who are going to pay for that is our grandchildren. It 
is not going to be 3 cents out of every dollar. It is going to be 9 
cents out of every dollar, and what is really being said is the 
grandchildren's standard of living, if we establish a Medicare drug 
benefit, because that is who is going to pay for it because it is going 
to start in the year 2023 and there is going to be a significant price 
to pay, and that price is going to be manifested in the fact that their 
standard of living is going to be far less. They will not buy a new 
home because they are going to be paying 6 percent additional out of 
their income for a Medicare program.
  What can we do today to change the current climate as far as 
prescription drugs in this country? I say there is a lot we can do. The 
first thing we can do is we can ask the President to instruct the FDA 
to get on the ball as far as generic drugs. The gentlewoman from 
Michigan mentioned that she had somebody write in and say she was 
taking Premarin. For 5 years there has been an application pending for 
an identical drug to Premarin that the vast majority of women over 50 
years of age in this country are taking that will sell for one-sixth 
the cost that Premarin presently sells for.
  Premarin sells for, a month, about $30 average in this country. The 
same drug made in the same plant in Europe, not Canada and Mexico 
because they have price controls, in Europe sells for $6.95. How is it 
that we are subsidizing the drug consumption of the rest of the world? 
There is something wrong with the market.
  So it is not a nonconservative position to ask that competition be 
restored. The first thing we do is we get the FDA to approve more 
generic drugs.
  I might also note that there was a recent release March 16 on four 
drug companies where the FTC found that two drug companies had paid two 
other drug companies to delay the release of their generics. In other 
words, they fixed prices. What that says to us is the Justice 
Department in this country ought to have an aggressive policy that is 
going to attack anticompetitive practices in the drug industry. If we 
do not fix that and we create a Medicare drug benefit, what we are 
going to do is waste money in Medicare, besides supplying the need for 
our seniors which is very real. I do not deny that.
  If we do not fix that underlying pneumonia in this program and in the 
drug industry, all we are going to do is pay more money for it.
  Those companies, and this can be found on the FTC Web site as of 
March 16, 2000, if anyone is interested in knowing, clear evidence that 
there is price fixing that is ongoing in the drug industry today; clear 
evidence that the Justice Department is not doing its job to make sure 
that there is competition among the drug industry.
  The other thing that is important is 2 years ago, which I voted 
against and very few of us did, this Congress and this President passed 
FDA reform which allowed prescription drug companies to advertise 
prescription-only medicines on television. This year they will spend 
$1.9 billion on television advertising for medicines that can only be 
gotten if a doctor writes a prescription for someone.

                              {time}  1930

  Who is paying for that? We are paying for it. It is not necessarily 
more effective for the patient. It does not necessarily make us 
healthier. It just creates a brand name under which that drug company 
can sell more of a particular brand of drug without necessarily inuring 
any health benefit to us as a Nation. We ought to reverse that.
  There is no reason to advertise prescription drugs on television. 
That is $1.9 billion that would drop out of the price of drugs 
tomorrow. That is expected to go to $5 billion next year. So we can 
take $5 billion next year out of the cost of drugs.
  This year, the average wholesale price of existing drugs in this 
country rose 12 percent. That is the year 1999. Not new drugs, drugs 
that were already out there. The costs associated to those drug 
companies for those was 1.8 percent. So they had a six-fold increase in 
price for existing drugs with a 1.8 percent increase in price.
  That to me tells us that there is no competition in the drug 
industry. When the average cost of living was less, the increases all 
across the board were 3 percent, and prescription drugs, not new drugs, 
not new benefits, not things that were breakthroughs, increased four 
times the rate of inflation, we have to ask the question, what is going 
on in the drug industry?
  Do not get me wrong. I believe in the free enterprise system. I 
believe in competition. I believe competition allocates scarce 
resources very effectively. But we do not have competition in the drug 
industry today.
  A third thing that can happen is we ought to put a freeze, no 
additional mergers in the drug industry until there is a blue ribbon 
panel that says there is, in fact, competition to make sure that there 
is true competition.
  A drug was recently introduced that competes with a drug that is on 
TV, everybody knows it as the purple pill. It is called Prilosec. A new 
drug, does the same thing slightly different, one would think they 
would want to get market share. One would think they would want to 
introduce that new drug at a price lower so that people might switch to 
that one to use it. Guess what the average wholesale price? Exactly the 
same as Prilosec. Why is that? Because there is no competition in the 
drug industry.
  Now, the statements I am making on the floor tonight will be met with 
hard-ball politics tomorrow by the drug industry, my colleagues can bet 
it. But unless America wakes up and does not go to sleep saying the 
problem to solve drugs for our seniors is to create a new program on a 
bankrupt program and charge it to our grandchildren, we will never 
solve the problems. The problems are severe.
  There is another thing that could happen tomorrow that would help 
almost every person that has been mentioned in the hour before I 
started speaking. Almost every drug company in this country has an 
indigent drug program. They will give drugs free to indigent seniors, 
but it takes a little work. The doctor has to fill out something. It 
has to be mailed to the drug company. They will mail them a 30-day 
supply. One has to keep doing it if one wants them to keep getting it.
  The drug companies are willing to do that, but the physicians in this 
country, because they are already overworked because of the 
overburdened system of managed care, do not really have the time to 
take advantage of that.
  So here we have a benefit that would lower the cost, would make 
available drugs to many of our seniors, but it is not being utilized 
because of the mandated system and lack of competition and the lack of 
freedom associated with the health care system that we have.
  There is still another thing that we could do, and this one my 
physician friends are not going to like. But we heard comments that a 
senior was on 17 medicines. Well, I will tell my colleagues any person 
in this country on 17 medicines is not feeling well. One of the reasons 
they are not feeling well is the medicines are making them not feel 
well.
  Most good doctors were trained to do a medicine review at least every 
couple of months on somebody taking 17 medicines. One of the things 
that makes me happiest when I see seniors, they come to see me, and I 
look at the medicines they are on, if they are a new patient, the first 
thing I do is take them off three or four, and they think I am a hero. 
I am not a great doctor. It is just common sense that if one is on too 
many medicines, one is not going to feel good.
  The second thing is, if one is on 17 medicines, one is not going to 
be taking them right. So they are not going to be effective.
  The third thing is doctors have to pay attention to what medicines 
cost. Guess what? Most physicians are not doing that. They are writing 
a prescription. Our goal ought to be, as physicians, is if we are going 
to help somebody get well, we ought to make sure we can give them a 
prescription for a drug they can afford to take.
  Now, that may not always be the best drug. It may be one that works 
95 percent as well. But if they are taking the one that costs $5 that 
works 95 percent as well compared to the one that costs four or five 
times as much and worked 99 percent instead of 95, which would one 
rather have one's mother and father on. I would rather have them on the 
one they are going to take.
  So I think there are a lot of common sense things that ought to be 
approached before we ever start talking about sacrificing the future of 
our grandchildren by expanding a new Medicare program.
  Now, let me give my colleagues a little history on Medicare. We 
talked about all the things. The closest the Federal Government, the 
best the Federal Government has ever done in estimating the cost of a 
new Medicare benefit they missed by 700 percent. So when my colleagues 
hear a new drug program is going to cost $40 billion, it is going to 
cost $280 billion at the least, $280 billion.
  Instead of this program being bankrupt in 2023, it is going to be 
bankrupt in 2007, 2008. Now, politically, if one is running for office, 
it does not take much courage to say one will vote for a Medicare 
benefit. But it takes a whole lot of courage to say, I do not think 
that is the best thing for all of us as a society as a whole.
  Why do we not fix the real problems associated with the delivery of 
medicine and drugs and competition within the health care industry. By 
ignoring it, that patient I talked about that had pneumonia is going to 
die, and that is what is going to happen to Medicare. We will not let 
it die because the career politicians do not have the courage to 
challenge the system. It was last year that we finally got the Congress 
to stop touching Social Security money. But this year, if you will 
notice these charts, you can see how the Medicare money comes in. 
Medicare trust money comes in, it goes to the Federal Government. They 
use it, the excess money they put an IOU in there and the IOU is 
credited to the Medicare trust fund. Here is what is going to happen 
for the next 2 years.
  These are not my numbers. These are Congressional Budget numbers as 
of 2 weeks ago. This year, the surplus in the Medicare part A trust 
fund is $22 billion. The surplus in the fiscal year 2000, right now, as 
estimated by the CBO is $23 billion. So $22 billion of the $23 billion 
that the politicians in Washington are going to call surplus is 
actually coming from Medicare trust fund.
  Mr. Speaker, how about us not touching that? How about us not 
spending that on something else? How about us retiring outside debt, so 
that when it comes time for us to use that, we will have the money, 
that we will not have to go borrow it from our children and 
grandchildren.
  Year 2001, the same thing, $22 billion of the surplus which is 
projected right now at $22 billion, it is all Medicare part A money. So 
we can claim we have a surplus, but we have to wink and nod at you and 
say, well, it really is part A trust fund money, but we are going to 
borrow it, because we cannot control the appetite of the Federal 
bureaucracies. We cannot make them efficient to do what they need to do 
it, and we cannot meet the needs of the commitments that we have made 
to the rest of America by making sure government is at least as 
efficient as the private sector, what we are going to do is we are 
going to steal the money.
  Instead of $166 billion that we owe, we are going to go to $189 
billion this year, and then we are going to go to $211 billion next 
year. And then pretty soon, it is going to tail right back off, because 
as we add a drug program, the numbers are going to be uncontrollable.
  So we have major problems ahead of us, and they are confused because 
the only thing that the people in Washington want to talk about is 
answering the easy political problem. A senior has problem buying 
drugs, so, therefore, we create a Federal program that buys drugs. That 
is not the answer that our children deserve. That is not the answer 
that you deserve when you elect people to come up here.
  We need to make the hard choices, even if it means we do not get 
reelected, we need to make the hard choices to fix the programs so they 
work effectively.
  I notice a friend of mine has shown up, the gentleman from Minnesota 
(Mr. Gutknecht), and I would welcome him and recognize him now and 
yield to him.
  Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Oklahoma (Mr. 
Coburn) for yielding and for this special order and I thank our 
colleagues earlier for talking about this problem, because it is a 
major problem. And, unfortunately, for both the administration and some 
of the leadership here in Congress, what we are talking about is 
solving what some people say is the problem, and that is that seniors 
are not getting the prescription drugs or a benefit that some people 
feel they should, when the real problem is runaway prices, and as the 
gentleman indicated earlier, a tendency to overprescribe.
  Mr. Speaker, I am not certain what we can do in terms of influencing 
the medical professionals as it relates to overprescribing, but I think 
we need to take an honest and sober look at how much Americans pay for 
prescription drugs relative to the rest of the world. Now, I do not 
believe in price controls. I believe in markets. I believe at the end 
of the day that markets are more powerful than armies.
  Last Saturday night, I was privileged to attend a dinner and the last 
leader of the Soviet Union, Mikhail Gorbachev, spoke to us; and it was 
interesting, because as he talked for an hour and 12 minutes, he went 
through sort of his metamorphosis and where he finally came to the 
acknowledgment that they could not compete with the United States, that 
a market economy was much more efficient than a controlled government-
run economy.
  He finally reached the point where he realized that both militarily, 
economically, and, perhaps, even socially and culturally, that the West 
had won, and they had to do something else. I believe in markets.
  Mr. Speaker, I believe that the idea of having a big government 
bureaucracy trying to control prices and make certain that everybody 
gets the right drugs, I think that is ridiculous; and frankly, if 
anything, here in Washington, we ought to be restricting the power of 
the Health Care Finance Agency and of the FDA.
  Let me just run through this. There is a group, I believe they are 
out of Utah. I owe them a big debt of gratitude William Faloon has put 
out a brochure, and this is available to any Member or anyone else who 
wants to call my office, we will send them out a copy of this. They 
have done an interesting study on the differences between prescription 
drug prices here and in Europe.
  We have a tendency to still think of Europe as being sort of our 
adolescent child. After World War II, the United States basically made 
certain that the European economy was rebuilt, but today the European 
Union has a bigger economy, in terms of gross domestic product, than we 
do. It is interesting in respects, we continue to subsidize what is 
happening in Europe, whether it is militarily and even in drugs.
  Let me just run through a few of these drugs. And frankly the 
gentleman probably knows better than I do what these drugs are 
prescribed for, but these are some of the most commonly prescribed 
drugs in the world. One the gentleman mentioned earlier is Premarin. 
The average price in the United States, according to a study done by 
the Life Extension Foundation, Mr. Faloon's organization, the average 
price in the United States last year was $14.98 for a 28-day supply. 
The average price in Europe is $4.25.
  Mr. COBURN. For one third of the price?
  Mr. GUTKNECHT. Less than a third of the price.
  Mr. COBURN. The same drug?
  Mr. GUTKNECHT. The same drug made by the same company in the same 
plant under the same FDA approval.
  Mr. Speaker, let me run through a few more. Synthroid, now that is a 
drug that my wife takes. In the United States, the average price for a 
50-tablet supply of 100 milligrams, the average price in the United 
States $13.84. In Europe, it is $2.95. Cumadin, that is a drug that my 
dad takes. He has a heart condition. It is a blood thinner I 
understand. Cumadin, 25 capsules, 10 milligrams, the average price in 
the United States $30.25; the average price in Europe $2.85.
  Let us take Claritin, which is a commonly prescribed drug in America 
today, and they advertise quite heavily, as the gentleman indicated 
earlier, the average price in the United States for a 20-tablet supply 
of 10 milligrams is $44. In Europe that same drug made in the same 
plant by the same company, same dose everything is $8.75.
  Augmentin, and I do not know what Augmentin is for perhaps the 
gentleman does.
  Mr. COBURN. Augmentin is a very effective antibiotic.
  Mr. GUTKNECHT. For Augmentin, a 12-tablet supply of 500 milligram 
here in the United States we pay an average of $49.50. In Europe, for 
exactly the same drug, the price is $8.75.

                              {time}  1945

  Glucophage. Perhaps the gentleman can share with us what this is.
  Mr. COBURN. That is an anti-diabetic drug.
  Mr. GUTKNECHT. Apparently it is commonly prescribed; 850 milligram 
capsules, quantity of 50. The average price in the United States is 
$54.49. The average price in Europe is $4.50.
  And this is a group in Minnesota that has done this study. Another 
commonly prescribed drug, Prilosec, the average price here in the 
United States is around $100 for a 30-day supply. That same 30-day 
supply, if a person happened to be vacationing in Winnipeg, Manitoba, 
and they take their prescription into a drugstore there, they will pay 
$50.80 for the drug that sells in the United States for roughly a 
hundred dollars.
  But here is what is even more troubling. I will use that term. What 
is more troubling is that if we were to buy that same drug, same 
company, same FDA approval, but we purchase it in Guadalajara, Mexico, 
that same drug sells for $17.50.
  Now, I do not believe in price controls. I do not believe we should 
have a new agency to try to control drug prices. I believe that markets 
are more powerful than armies. But let me just say this. A few years 
ago this Congress passed the North American Free Trade Agreement; and 
we allow corn, we allow beans, we allow lumber, we allow cars, we allow 
steel, and we allow all kinds of goods to go back and forth across the 
border between the United States and Canada and between the United 
States and Mexico. That is what free trade is all about. But there is 
one exception. We do not allow prescription drugs to go across those 
borders.
  And, really, to give an analogy, and it is the best analogy that I 
have come up with, let us just say that there are three drugstores. One 
is on the north side of town, one is on the south side of town, and one 
is downtown. Now, there is over a 50 percent difference in the prices 
that those three stores charge, but our own FDA, our own Federal 
Government, the Food and Drug Administration, says, Oh, you American 
consumers can only buy your drugs from the most expensive store.
  Now, I asked a businessperson this morning. I said, Suppose you are 
in a business, and you find out that you are the largest customer of a 
particular supplier, and yet you also find out that they are selling 
exactly the same thing to some of your friends that are in the business 
cheaper than they are selling to you, even though you are their biggest 
customer. How long do my colleagues think that would last? But that is 
exactly what is happening in the drug industry.
  The FDA, and I believe really without any legislative approval, has 
decided that they will unilaterally stop the importation of drugs into 
the United States which are otherwise approved in the United States. 
And to me that is outrageous. We should not stand idly by as a Congress 
and allow our own FDA to stand between American consumers in general 
and American seniors in particular. We should not allow our own FDA to 
stand between them and lower drug prices.
  And the one great thing about markets, whether we are talking about 
oil or we are talking cotton or we are talking about prescription 
drugs, I do not care what it is, the great thing about markets is they 
have a way of leveling themselves.
  In southeastern Oklahoma, I will bet that if the gentleman goes to 
any of the elevators in his district, he will find that the elevator in 
Enid--well, Enid is not in the gentleman's district. I am trying to 
think of one of the towns. I have been to virtually every town in the 
gentleman's district. But if the gentleman were to go to one town in 
southern Oklahoma, the wheat price might be X amount today. And if the 
gentleman called over to another elevator, it might be a different 
price. The chances are the prices would be different.
  But over time, what would happen? Those prices would tend to self-
regulate. Because the farmers start figuring out that if the elevator 
in Enid, Oklahoma, is paying a higher price than the one in Muskogee, 
they will all start going to Muskogee. And what happens is the prices 
start to level. That is the way markets work. The unfortunate thing is 
that our Federal Government has been standing in the way of allowing 
those markets to work.
  And so, again, I would say that Members who would like a copy of this 
brochure, and I must say that I had nothing to do with writing this, 
but this brochure, put out by the Life Extension Foundation, is a 
reprint of their February Year 2000 brochure, which tells the whole 
story. It gives an excellent chart of how much more American consumers 
are paying.
  Now, again, I do not want price controls. But this is what I say to 
my seniors: we should not have ``stupid'' tattooed across our 
foreheads. It is outrageous that Americans are paying upwards of 40 
percent more than the rest of the world for prescription drugs, and it 
seems to me that we have a moral obligation, particularly now that we 
are having this discussion about opening up, in effect, perhaps a new 
entitlement, if we do that without dealing with the real problem, which 
is runaway prices, then I say, shame on us.
  I yield back to my colleague from Oklahoma.
  Mr. COBURN. Well, I thank the gentleman for making the point on 
competition, and I think that is the question I would ask of the 
seniors and those that are out there working today and those that are 
going to be working tomorrow. Would it not make sense to try to fix 
competition within the industry, improve the quality of our health care 
and increase the efficiency and accuracy of the system before we go 
solve the problem?
  The question is can we make sure our seniors have available to them 
the drugs that they need, that will give them effective treatment, and 
can we do that in a compassionate way so that they are not passing up 
supper to take a pill or they are not missing a pill to get supper? Can 
we do that without creating a big government program?
  I can tell my colleague that I believe we can. It will not be easy, 
because we will have to attack our friends. We are going to have to say 
there is not good competition. We are going to have to go back in and 
make sure that the branches of government that are involved in assuring 
competition in the drug industry are there.
  That is not to say that the drug companies do not do a wonderful job 
in their research. And it is not to say that they are not going to be 
doing an even better job as we have all these genetically engineered 
drugs that will come about in the next 10 years. But we hear the drug 
companies say that they will not be able to do this because all these 
prices are based on the fact that we spend all this money on R&D. Well, 
the fact is the pharmaceutical industry spends more money on 
advertising than they do on research. They have a cogent argument as 
soon as that number on advertising drops significantly below the amount 
of money that they are spending on research. Until then, they do not 
have an argument that holds any water.
  So our seniors out there tonight that are having trouble getting 
prescription drugs and affording it, the first thing they need to do is 
to ask their doctor to make an application for them for the indigent 
drug program that almost every drug company has. That way they can at 
least have the drugs.
  Number two, they should ask their doctor if in fact there is not a 
generic drug that could be used that will be almost as effective and 
that will save a significant amount of money each year.
  Number three, they should ask the doctor if he or he is sure that 
every medicine they are taking they have to be taking. That way we can 
make sure that the patients are getting medicines that they need today; 
that the medicines that they are taking are as effective and cost 
effective as well, and that they truly need them.
  That takes care of part of the demand. The other thing they can do is 
insist that their representatives ask the Justice Department to look 
aggressively at collusion and anti-competitive practices within the 
drug industry. They should ask their elected representative to reverse 
the bill 2 years ago that allowed drug companies to advertise 
prescription drugs on television. Because we could save at least $2 
billion this year, $5 billion next year in terms of the cost of drugs.
  Finally, they should ask that their representative not steal one 
penny from Medicare this year to run the Government. And if in fact we 
do those things, we can meet the needs of our seniors, we can preserve 
Medicare and extend its life, and we can assure that our children and 
our grandchildren are not going to be burdened with another program 
that is inefficient, underestimated in cost, and really does not solve 
the underlying problem associated with prescription drugs for our 
seniors.
  I yield to the gentleman from Minnesota for any additional comments.
  Mr. GUTKNECHT. Well, I thank the gentleman from Oklahoma (Mr. 
Coburn).
  I would only say that I think what the gentleman is really saying is, 
and this is really an interesting debate, that at the end of the day it 
is about fundamental fairness. It is, from a generational perspective, 
wrong for us to borrow from the next generation.
  But it is also wrong for the drug companies to require Americans to 
pay the lion's share of all the research and development cost as well 
as footing most of the cost for their profit. And the dirty little 
secret is that that is what is happening in the world today. We have a 
world market, but the drug companies have realized that they can get 
most of their profit, most of their research and development money, 
from the American market.
  Now, I think Americans should pay their fair share of research cost. 
I think that is important. I agree with the gentleman that I am not 
certain Americans should have to pay advertising costs. Ultimately, it 
really should be the decision of the doctor more than being market 
driven and having almost a pulling effect through the marketplace by 
advertising, by broadcasting on television, radio, and so forth. I am 
sure that that is an issue that we need to address.
  But I want to come back to just how much more we pay. It is not just 
us saying this. This is a study done by the Canadian Government. If 
people forget everything that I have said tonight, remember a couple of 
numbers. One of the most important numbers is 56. By their own study, 
the Canadian government says that Americans pay 56 percent more for 
their prescription drugs than Canadians do.
  Now, 56 is important, too, because over the last 4 years prescription 
drugs in the United States have gone up 56 percent, 16 percent just in 
the last year. One of the biggest driving costs in terms of the cost of 
insurance over the last several years has been the increasing cost of 
prescription drugs.
  Now, again, that is important. We need prescription drugs. We need to 
make certain that we are doing what we can so that the next generation 
of drugs can come online. I believe in research, and I believe part of 
the reason we enjoy the high standard of living that we do in America 
today is because of the research that has been done in the past. So we 
do not want to cut that. We do not want to create a new bureaucracy. 
But we also do not want to steal from our kids, and we do not want to 
``solve this problem'' by creating a whole new entitlement.
  Here is another fact. Last year, according to the Congressional 
Budget Office, we, the American people, we the taxpayers, the Federal 
Government, spent over $15 billion on prescription drugs. Now, that is 
through Medicare, Medicaid, the VA, and other Federal agencies.
  Mr. COBURN. Let me clarify that for a minute, because I want to be 
sure all our colleagues understand that. That is Federal payments for 
prescription drugs.
  Mr. GUTKNECHT. Just Federal payments. Now, there is a match with 
Medicaid, there is a match with some of the other programs, and of 
course in some of those cases the individuals themselves had some kind 
of a copayment. But that is what the Federal Government spent for 
prescription drugs last year, according to the Congressional Budget 
Office.
  Now, virtually every study I have seen, independent studies, say that 
Americans are paying at least 40 percent more than the world market 
price for those drugs. Now, I am not good at math, and I demonstrated 
that this morning; But let us say 30 percent. Let us say we are already 
getting some discounts. And I suspect we are. I do not think we are 
paying full retail at the Federal level for our prescription drugs. So 
let us say we are getting some discounts. But let us just say we could 
bring our prices somewhere near the world average price for these same 
drugs. If we could save 30 percent times $15 billion, that is over $4 
billion.
  That would go a long ways to solving our problem, to making certain 
that people on Medicare all have the opportunity to get the drugs that 
they need and, again, that they do not have to make the choice that the 
gentleman talked about earlier. They do not have to choose between 
eating supper on Friday or taking the drugs they need, not only to 
preserve their health but to preserve their quality of life. Because 
drugs are important in that regard. It is not just about extending our 
life, it is about improving the quality of our life.
  And drugs are wonderful things. And I certainly do not want to take 
anything away from the pharmaceutical companies. But as I say, I do not 
think we should be required to pay more than our fair share of the cost 
of developing those drugs, of making those drugs, of getting those 
drugs approved, and then plowing more money back into the next 
generation.
  So I think we are on the same page. I just want to finally say this. 
This is a matter of basic fairness. As I said earlier, I do not think 
we should allow our own FDA to stand between American consumers and 
more reasonable drug prices, because that is what is happening today.
  Finally, not hearing most of the discussion from our friends that 
spoke before us, this is not a debate between the right versus the 
left. It is not even a debate between Republicans versus Democrats. 
This is really a debate about right versus wrong. And it is simply 
wrong for us to shovel billions of more dollars into an industry who 
right now is charging Americans billions of dollars more than they 
would normally pay in terms of a world market price.

                              {time}  2000

  The answer is not to steal more from our kids to give more money to 
the big pharmaceutical companies. The answer is coming up with a 
market-based system that allows some kind of competitive forces to 
control the price of the drugs and therein creating the kinds of 
savings which will make it much easier for us and for those seniors to 
get the drugs that they need.
  And so, my colleague is absolutely right, this is not an unsolvable 
problem. If we will work together, if we will listen to each other, if 
we will be willing to tackle some of those tough problems, and if we 
are willing to take on some of the entrenched bureaucracies, whether it 
is at the FDA or the large pharmaceutical company, the Department of 
Justice, and even some of our friends in the medical practice, if we 
are willing to ask the tough questions, force them to have to work with 
us to find those answers, this is a very solvable problem.
  I just hope we do not make the mistake of creating a new expensive 
bureaucracy, a new expensive entitlement and, at the very time we ought 
to be doing more to control the prices of prescription drugs, have the 
net practical effects of driving them even higher. That would be a 
terrible mistake not just for this generation but for the next, as 
well.
  Mr. COBURN. Mr. Speaker, I thank the gentleman for his comments.
  In closing, the next time my colleagues hear a politician from 
Washington talk about prescription drugs, ask themselves why they are 
not treating the pneumonia that this industry has, ask themselves why 
they are not saying there needs to be competition in drugs, ask 
themselves why they are not saying the FDA needs to be approving more 
generics, ask themselves why they are not speaking about the underlying 
problems associated with delivery of health care and medicines to our 
seniors instead of creating a new program which our children will pay 
for but, most importantly, will be twice as expensive as what it should 
be because we have not fixed the underlying problems.
  I want to leave my colleagues with one last story. I recently had one 
of my senior patients who had a stroke. She was very fortunate in that 
she had no residuals. But the studies of her carotid arteries proved 
that she had to be on a medicine to keep her blood from clotting.
  One of my consulting doctors wanted to put her on a medicine called 
Plavix. It is a great drug. It is a very effective drug. The only 
problem is it costs over $200 a month. The alternative drug that does 
just as well but has a few more risks, which she had taken before in 
the past, is Coumadin.
  Now, the difference in cost per month is 15-fold. I could have very 
easily written her a prescription for Plavix. She would have walked out 
of the hospital, not been able to afford the Plavix, and had another 
stroke, or I could have done the hard work and said, this is going to 
do 95 percent of it. It is going to be beneficial. It has a few risks. 
Here is what this costs. What do you think? She chose to take the 
Coumadin because that gives her some ability to have some control of 
her life.
  So these are complex problems; and I do not mean to oversimplify 
them, and I do not mean to derange either the physicians, the patients, 
or the drug companies, other than to say that our whole economy is 
based on a competitive model and, when there is no competition, there 
is price gouging.
  Today I honestly believe in the drug industry there is price gouging. 
We need to fix it, and we need to fix that before we design any 
Medicare benefit to supply seniors with drugs, especially since there 
are free programs out there that are not being utilized that are 
offered by the drug companies.

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