[Congressional Record (Bound Edition), Volume 147 (2001), Part 9]
[House]
[Pages 12756-12762]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 12756]]

                     OUTRAGEOUSLY HIGH DRUG PRICES

  The SPEAKER pro tempore (Mr. Rehberg). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Minnesota (Mr. Gutknecht) 
is recognized for 60 minutes.
  Mr. GUTKNECHT. Mr. Speaker, I will later be adding some items to the 
Record.
  Mr. Speaker, I rise tonight to talk about an issue that in some 
respects is a dirty little secret. Yet more and more of us in 
Washington and more and more seniors around the country know about this 
dirty little secret. It is about the outrageously high prices that 
Americans pay for prescription drugs.
  Now, I think most Americans are appreciative to the pharmaceutical 
industry for the miracles they have created over the last number of 
years. We are all delighted that we have drugs today to treat diseases 
which just a few years ago were untreatable. We are not unappreciative 
to what the pharmaceutical industry has done. But the dirty little 
secret is that the Americans are paying the lion's share, in fact, I 
might even argue that the Americans are paying the entire share of the 
research and development costs for these miracle drugs for all the 
other consumers around the rest of the world.
  Several years ago, I talked to some seniors back in Minnesota and 
they talked to me about going to Canada to buy prescription drugs. But 
they told me that when they came back after they had their little vials 
of whatever drug it was, whether it was Claritin or Coumadin or 
Glucophage or whatever the drug would be, when they would try to 
reorder that drug from the pharmacy up in Winnipeg or wherever they had 
bought the drugs in from Canada, when they tried to reorder the drugs 
and when the drugs came into the United States, they were stopped by 
the FDA. The FDA then sent a very threatening letter to those seniors 
saying that if they tried to do this again that, in effect, they could 
be prosecuted.
  Now, if one was a 78-year-old grandmother getting a letter from the 
Food and Drug Administration in effect saying that she could be 
prosecuted, that what she is doing is illegal and if she tries to do 
this again, there are serious consequences, that is a very threatening 
thing to happen to a senior.
  Now, they told me this story. They told me what was happening in 
their trips, their bus trips to Canada. I have to be very honest. It 
really did not register with me. In fact, it was not until almost 2 
years later when a seemingly unrelated event occurred.
  What happened was hog prices to our hog producers, to our farmers in 
Minnesota, the prices collapsed. In fact, they reached Depression-era 
prices. Hogs dropped to $8 per hundred weight. Now, today hogs in 
Minnesota are selling for about $69 to $70 per hundred weight. So now 
hogs are profitable again. But we had a tremendous collapse in the 
price of hogs.
  Now, to make matters worse there was a packing plant up in Canada 
that was supposed to come online. There was some construction delays. 
For whatever reason the plant was delayed in being brought online. The 
net result was there were thousands of Canadian hogs, at perhaps the 
worst time in the history of hog production in the United States, 
thousands of hogs were coming across and making a disaster even worse.
  Not surprisingly many of our hog producers complained about all of 
these Canadian hogs coming into our markets. Those of us who represent 
those districts, we brought those complaints and concerns to some of 
the Federal officials in Washington. The answer we got was relatively 
short and simple. ``Well, that is NAFTA, the North American Free Trade 
Agreement. That is what free trade is all about. You support free 
trade, do you not, Congressman Gutknecht?'' I had to say, ``Yes, I 
do.''
  It was then that the light bulb really went on. Because I said if we 
are going to have free trade in terms of pork bellies, we ought to have 
free trade in terms of Prilosec.
  I began to do some research. I feel sometimes like that little boy 
who came in and asked his mother a question. His mother was busy, and 
she said, ``Why do you not go ask your dad?'' And the little boy said, 
``Well, I do not want to know that much about it.''
  Well, I feel like that little boy sometimes because the more I have 
learned about this prescription drug issue, the more angry I become.
  There is really something wrong with a system that says that American 
consumers on average pay $69.99 for a month's supply of Allegra 120 
while our friends over in Europe enjoy exactly the same drug made in 
exactly the same plant under the exact same FDA approval, our friends 
in Europe can buy that same drug for $20.88.
  If you look at this list, this is not a complete list, in fact, this 
is not even my list. These numbers were compiled by a group who have 
been studying this issue for more years certainly than I have, a group 
called the Life Extension Foundation, and just recently they sent us a 
listing. They had done a study between the United States and Europe, 
and here are some of the numbers.
  I hope people will look at this. Let us look at commonly prescribed 
drugs for senior seniors. I know it is commonly prescribed because my 
82-year-old father takes Coumadin. He is fortunate. He worked for a 
union employer all of his life. He has a pretty generous prescription 
drug benefit as part of his insurance package; and as a result, he does 
not pay the full price. But if he did, and millions of American seniors 
do pay full price for Coumadin, the average price in the United States 
for a month's supply of Coumadin is $37.74. That exact same drug in 
Europe sells for an average of $8.22.
  Let us look at Glucophage. That is a drug that is taken principally 
by diabetics. If you are a diabetic in the United States and you are on 
Glucophage, you are probably going to be on it for the rest of your 
life. A 30-day supply here in the United States sells for an average of 
$30.12. That exact same drug made in the same FDA-approved facility in 
Europe sells for only $4.11.
  Let me say that again. The price in the United States, $30.12. The 
exact same drug in Europe sells for $4.11.
  As you look at some of the more expensive drugs, and this is where it 
becomes incredibly problematic, where you have seniors or you have 
other consumers that do not have prescription drug coverage, they are 
paying full bore for these drugs, and more and more we are seeing drugs 
coming on to the market like, for example, Zithromax 500, a 30-day 
supply in the United States sells for $486. That is the average retail 
price. But our friends over in Europe, and let us remember the European 
Union now has a gross domestic product almost equal to the United 
States, their standard of living is almost equal to the United States. 
At one time after World War II and we had the Marshall Plan, certainly 
it was important for Americans to help rebuild Europe and in effect to 
subsidize Europe; but today Zithromax 500 sells for $486 in the United 
States. The same drug in Europe sells for $176.19.
  Mr. Speaker, this is indefensible. This is unsupportable. There is no 
one in this body, there is no public policymaker in America, that can 
defend this chart. What is worse, the pharmaceutical industry cannot 
defend this chart. We have had representatives of what we call PHRMA 
into our office. We have showed them this chart and said please explain 
this chart.
  These are multinational companies. Many of them are based in Europe. 
Many of the big pharmaceutical companies now are based in Geneva or 
London or Paris. How is it that you are willing to sell these drugs so 
much cheaper in European Union countries than you are here in the 
United States? Now the interesting thing is they do most of the 
research here in the United States and we are happy for that. We want 
the research to remain here in the United States. But the dirty little 
secret is, we subsidize the starving Swiss.

[[Page 12757]]

  All I am saying with the simple amendment that I intend to offer 
tomorrow is that it is time to level the playing field. I do not 
believe in price controls. I do not believe in more government 
regulations. I think in the long run both price controls and government 
regulations are the wrong way to go. If you doubt that, just do a brief 
study of the former Soviet Union, because for over 70 years there is an 
experiment that failed. They tried to set prices. They tried to control 
markets.
  Mr. Speaker, markets are more powerful than armies. What the Soviet 
Union proved more than anything else is that you cannot hold back 
markets. We are in the Information Age, Mr. Speaker, and these kinds of 
numbers, these huge differences between what Americans pay and what 
Europeans pay for exactly the same drugs, that system could only 
survive before the Information Age. Now people can get on their 
computer, they can go online and they can get this information. And 
they can find out that in Switzerland they are able to buy Biaxin for 
half the price that we pay in the United States. Once Americans realize 
this, because information is power, once Americans realize the huge 
differences that they pay for the same drugs, they are not going to 
stand for it. They are going to start marching on this Congress and 
they are going to demand that we do something.
  In fact, how many times do we hear at some of our town hall meetings, 
Congress needs to do something? Well, I am going to go back to the 
point I made earlier. I do not support price controls, and the truth is 
some of the countries in the European Union have price controls. I 
think it is a bad idea, and I do not want to join them. But some of the 
countries in the European Union do not have price controls. Switzerland 
does not have price controls. Germany does not have price controls.
  A German can go in and buy drugs in Switzerland or a German can go in 
and buy drugs in France or in any other country. The European Union 
allows free markets within that area.
  It is interesting, because just a few years ago we passed the North 
American Free Trade Agreement and so pork bellies can go across the 
borders, and fruits and vegetables can go across the borders and lumber 
can go across the border. There is nothing to stop one of my 
constituents from going to Winnipeg, Manitoba and buying a Chevrolet. 
As a matter of fact, I do not think there is anything that would stop 
that consumer from going online and on the Web and ordering almost any 
product they want from Winnipeg, Manitoba; or Paris, France; or Rome; 
or Frankfurt, Germany; or anywhere else. There is only one product 
which we for some reason have singled out and said American consumers 
do not have access to world market prices, and those are 
pharmaceuticals.
  Now I am not here tonight to beat up on the pharmaceutical industry. 
As I said earlier in the discussion, I am appreciative to what the 
pharmaceutical industry has done. Almost every one of us has a 
relative, a neighbor, a parent, a child, that has benefited from the 
research that the pharmaceutical industry has done.
  Before I yield to my friend, the good doctor, the gentleman from Des 
Moines, Iowa (Mr. Ganske), I want to talk about the three ways that we 
as Americans subsidize the pharmaceutical industry, because this is not 
largely understood. The truth of the matter is, we subsidize the 
pharmaceutical industry in three different ways. First of all, we 
subsidize them through the Tax Code. What the pharmaceutical industry 
is saying today is well, we spend billions of dollars on research and 
most of it is done here in the United States. I said earlier in my 
discussion I am delighted that they do the research here in the United 
States. The numbers that we have, the latest numbers, is that the 
pharmaceutical industry in the last year that we have numbers for spent 
about $12 billion here in the United States on research, and that is 
good.
  What they do not say is that on the tax forms, most of these 
corporations are so profitable that they are at the 50 percent tax 
bracket, that at least half of that gets written off on their Federal 
income tax form. More of that gets written off on their State income 
tax form. Now what they are also eligible in some circumstances for is 
an investment tax credit. So we subsidize the pharmaceutical industry 
and the research that they do through the Tax Code.
  Secondly, this year we will spend close to $14 billion through the 
NIH and other various government agencies, including the Defense 
Department, on basic research, most of which is available to the 
pharmaceutical industry free of charge. In other words, we are putting 
all this money into NIH and through NIST and other science agencies, 
also through the Department of Defense, and most of that information, 
once a discovery is found, is made available to the public and to the 
pharmaceutical industry free of charge. So there is about $14 billion 
worth of public research that is paid for by the American taxpayers. 
That is the second way we subsidize the research that they do.
  The final way that we subsidize them is in the prices that we pay. 
These are outrageous. These are indefensible. Again, I am not here to 
really beat up on the pharmaceutical industry, because they are only 
doing what any industry, what any business, would do in terms of 
exploiting a market opportunity that we have given them. We give them a 
17-year patent in which they can sell these drugs in the United States 
and really no one can compete against them. In other words, we give 
them a monopoly and on balance I think that is a good idea. They are 
exploiting this market opportunity. No, it is not ``shame on the 
pharmaceutical industry for creating this kind of an environment.'' It 
is shame on us. It is shame on our own FDA for allowing this system to 
develop whereby Americans are paying for all of the research and most 
of the profits of the large pharmaceutical companies, many of which are 
not even based here in the United States.

                              {time}  2100

  I am delighted to have joining us today one of the physicians who 
serves here in the House, the gentleman from Des Moines, Iowa (Mr. 
Ganske), a former wrestler and Iowa Hawkeye, a good friend, and one who 
is not afraid to take on giants.
  I have to tell the gentleman, I reread the story from the Book of 
Samuel tonight of David and Goliath, and it was a powerful story. And 
sometimes when I think about the huge pharmaceutical industry and the 
simple little amendment, I feel like David, who went out on to that 
field, and he took from his sack a small stone, and he slung it at 
Goliath, and that is sort of where we are with this small amendment.
  But I want to welcome the gentleman from Iowa (Mr. Ganske), who is 
one, as I say, who we do not always agree, but, I will tell you, I have 
always admired and respected, and we are delighted to have the 
gentleman here tonight to talk a little bit about pharmaceuticals. I 
will yield to the gentleman.
  Mr. GANSKE. I thank the gentleman from Minnesota and would like to 
enter into a colloquy with him.
  I think the gentleman is pointing out an important difference in the 
price in the United States for some of those drugs and the price in 
Europe. Now, correct me if I am wrong, but most of those European 
countries do not have price controls; is that correct? Some do, some do 
not.
  Mr. GUTKNECHT. Some do, some do not. We do not want to get into a 
debate, because, in truth, I do not support price controls. I think the 
best way to break the backs of price controls is to have open markets, 
because once the pharmaceutical industry and European countries realize 
that American consumers are going to be buying from them at their 
prices, I think it is going to force the European Union and the 
pharmaceutical industry to come to a better agreement so we level the 
playing field. That is really what I am trying to say.
  Yes, some have price controls, some do not. Every country has a 
slightly different regimen in how they deal with monopolies.
  Mr. GANSKE. But it is a fair statement that the prices are 
significantly

[[Page 12758]]

lower for the very same prescription drugs that are made in the United 
States that are sent overseas, that they are significantly lower, 
sometimes half as much or even a quarter as much, in some countries, as 
they are in the United States. Is that not a fair statement?
  Mr. GUTKNECHT. That is absolutely correct. As I say, these are not my 
numbers. This was an Independent Life Extension Foundation study done 
just recently between the United States and countries in the European 
Union.
  Let me point out, and the gentleman is more familiar with some of 
these drugs than I am, that Glucophage, which is a drug that I 
understand that once many diabetes patients take, they take it daily, 
in fact I guess they have given them a new patent now. Instead of a 
twice-a-day tablet, there is a once-a-day tablet, which gives them an 
extra 17 years on their patent.
  We are talking about seven times more. You talk about a patient who 
is going to have to take that perhaps for the next 30 years, you start 
multiplying that difference, we are talking about thousands and 
thousands and thousands of dollars, multiplied by, I do not remember 
the exact number, but something like 35 percent of all Medicare 
expenditures are in one way or another related to diabetes-related 
illnesses.
  I believe the amendment we are talking about ultimately, when fully 
implemented, when consumers have access and understand how it works, 
could save American consumers $30 billion a year.
  Mr. GANSKE. I want to just pin this down. The gentleman would say it 
is fair to say that there are many countries in the world where the 
prices are significantly less than they are in the United States; even 
though the drugs are exactly the same, they are made in the United 
States, they are shipped overseas, where they do not have price 
controls in those countries, but that the price is set by what the 
market will bear. Would the gentleman say that is a correct statement?
  Mr. GUTKNECHT. That is a correct statement based on all of the 
evidence and research that I have received from independent agencies. 
That is correct. In fact, we even have an independent study of Canada, 
where they do have price controls, but they are not as firm as some 
people think. But a study done by the Canadian Government suggests that 
they are saving Canadian consumers upwards of 50 percent.
  Mr. GANSKE. Now, the difference, the reason that we have these very 
high prices in United States, as versus, say, Switzerland, is because 
we cannot reimport those drugs from Switzerland into the United States 
because we have a Federal law that prevents that from happening. Is 
that the correct story?
  Mr. GUTKNECHT. There again, the FDA holds that, yes, we have that 
law. Now, last year in Congress we passed legislation by overwhelming 
votes, it was something like 376 to 25 here in the House, it was 90-
some to 3, I think, in the Senate, essentially going on record that we 
want to make it clear that law-abiding citizens should not be prevented 
from bringing legal drugs back into the United States, especially for 
personal use. So, the law, in my opinion, today is not clear.
  What we want to do with the amendment that I intend to offer tomorrow 
is clarify the legislative intent so there is no misunderstanding 
between the pharmaceutical industry, the FDA and American consumers 
that law-abiding citizens who have a legal prescription from a 
physician do have the right, using mail order, using the Web, using 
other methods, the telephone, they can call a pharmacy in Ireland or 
Geneva and be able to order that drug and have it brought back in the 
United States, so long, again, as it is a legal, non-narcotic drug. 
That is the amendment I intend to offer. That, I believe, will 
ultimately level the playing field between the prices that Americans 
pay and what consumers in other countries pay, regardless of whether or 
not they have price controls.
  Mr. GANSKE. That would mean, for instance, that a citizen in 
Minnesota could cross the border into Canada with a prescription and 
get it filled there, or a citizen in Texas or Arizona or New Mexico 
could cross the border and get a prescription filled there, and that 
would not be illegal. They could bring that back into the United 
States. That is the gist of the gentleman's amendment; is that correct?
  Mr. GUTKNECHT. That is correct.
  Mr. GANSKE. Okay. Now, then, we had hearings in my committee, the 
Committee on Energy and Commerce, talking about how there are some 
counterfeit drugs that get into the market. These hearings primarily 
focused on some very expensive drugs, like growth hormones, that are 
used for body building and other types of uses and sometimes can cost 
as much as $2,000 a vial. It has been reported in the press that some 
of that medicine is not real, that there has been adulteration or false 
packaging.
  Now, my understanding is that this has happened within the United 
States. Is that the gentleman's understanding?
  Mr. GUTKNECHT. Absolutely. The counterfeit drugs that some of these 
people are talking, or adulterated drugs, first of all, I want to make 
it clear, my amendment does not make them legal. We are only talking 
about drugs that are otherwise legal in the United States, where people 
have a legitimate prescription from a doctor. Principally what we are 
talking about, where this really happens, is when people travel.
  For example, let me give you a story from one of the ladies at one of 
my town hall meetings. She has a skin condition, I think called eczema 
or psoriasis, but, anyway, she has a skin condition, and to deal with 
that and manage it, her doctor in Rochester, Minnesota, has prescribed 
a particular ointment only available with a prescription, and in 
Minnesota it sells for about $130 for one tube.
  She was traveling in Ireland a couple of years ago and began to run 
out of this cream. She went to a pharmacy in Ireland, she had her 
prescription with her, she went into the local pharmacy, took her 
prescription, they had exactly the same drug, in exactly the same tube, 
made by exactly the same company, and it was $30.
  Now, when she got back to the United States, she said to herself, 
because she needs about a tube of this ointment every month, so $130 
times 12 versus $30 times 12 is a saving of $1,200 per year to this one 
individual.
  She looked at the tube, and on the tube or on the box that it came 
in, it had the name of the pharmacy, and it had the phone number. Now, 
she did what a lot of American consumers would do to save $1,200 a 
year. She picked up the phone, made a $2 phone call to Ireland and 
said, could I get that prescription refilled? The pharmacist over there 
said, absolutely. So he shipped her another supply.
  Mr. GANSKE. But there is nothing in the gentleman's amendment that 
would prevent the FDA from intercepting that shipment, that drug that 
she had ordered, and testing it, just like they would do if she had 
ordered it from a retailer in the United States and had it shipped to 
her home, is there?
  Mr. GUTKNECHT. No. In fact, if the FDA wants to test it, and, 
frankly, I want the FDA to enforce laws against illegal drugs. But can 
I just show the gentleman another chart, because I think it talks to 
this very point.
  The problem with the FDA is not that they do not have the power to 
inspect; it is that they spend all of their time chasing legal drugs 
and law-abiding citizens. They are focusing on the wrong end.
  Last year, for example, instead of stopping illegal drugs imported by 
illicit traffickers, some of the people the gentleman heard testimony 
about, what they have done is spent most of their effort going after 
approved drugs with law-abiding citizens. Last year the FDA detained 18 
times more packages coming in from Canada than from Mexico.
  We do not have a problem with Canada. We know a lot about the 
pharmacies in Canada. They have strong and stringent regulations in 
Canada. So why is the FDA detaining 90 times more packages from Canada? 
This was last year. Last year the FDA detained 90 times more packages 
from Canada than from Mexico.

[[Page 12759]]

  They are chasing law-abiding citizens bringing legal drugs in. What 
they need to do is focus on the traffic that the gentleman was talking 
about, where you have adulterated drugs, where you have got illegal 
drugs, where you have got all kinds of mischief going on, which, 
incidentally, the gentleman and I both know that as long as we try to 
play by the rules that the FDA has set in place now, you are going to 
get more of. Because more and more consumers who cannot afford some of 
these very expensive drugs, as we talked about before the gentleman 
arrived, Zithromax 500, $486 in the United States, $176 in Europe, what 
you are going to do is get more and more law-abiding citizens trying to 
figure out, how can I get those drugs, either legally or illegally, in 
the United States? Because the truth of the matter is that a drug 
somebody cannot afford is neither safe nor effective.
  Mr. GANSKE. So let me get this straight. What the gentleman would 
like is he would like the FDA to have enhanced enforcement to make sure 
that not only drugs coming into the United States from other countries 
are checked to make sure they are valid, but also to make sure that 
shipments that originate within the United States are not adulterated 
and are real drugs, too. And I believe at the bottom of the gentleman's 
other thought, the gentleman points out that we appropriated additional 
millions of dollars for border enforcement last year.
  Mr. GUTKNECHT. And the FDA refused to use it, and that is why we need 
this amendment this year, is to clarify what we said last year, stop 
chasing law-abiding citizens with legal drugs and legal prescriptions.
  Let me just suggest this: I do not know how many of our colleagues 
have gotten a package recently from UPS or Federal Express, I believe 
even the Post Office does it now, but they put a bar code on those 
packages. The truth of the matter is I believe that within a matter of 
months, if the FDA was serious about this and did not want to pursue 
law-abiding American citizens who are trying to save a few bucks on 
their prescription drugs, they could create a bar coding technology to 
know where that package came from, when it was shipped, and, frankly, 
they could even put what is in it.
  In fact, we now have the technology, and it is used in most 
hospitals, the software was developed in Minneapolis, Minnesota, I can 
put them in touch with the people that developed it, in virtually every 
hospital now, when you go in the hospital, they put a bar-coded 
bracelet around your arm, and when they dispense prescription drugs in 
the hospital, when they bring them in, they take the wand across your 
bracelet and a wand across the bar code on the package so that they 
know, they can literally go back to their computer and know that at 
3:10 p.m. this afternoon, you were given two tablets of Tylenol, or 
whatever the drug happened to be.
  That kind of technology is not science fiction. This is available 
today. And if the FDA is serious about this, we can help them solve the 
problem.
  The real issue is I do not think the FDA wants to solve this problem. 
They continue to commingle illegal drugs with legal drugs, and they 
continue to pursue the law-abiding citizens bringing in legal drugs, 
and yet there are literally millions of dollars of illegal drugs not 
only coming in from outside the United States, but, as the gentleman 
suggested, they are originating in the United States, and little or 
nothing is being done about that.

                              {time}  2115

  Mr. GANSKE. Mr. Speaker, I think this is a very, very important 
point; and I hope that some of our colleagues are in their offices 
working tonight, listening to the gentleman's presentation, because for 
sure, when the gentleman's amendment comes up, we are going to hear 
tomorrow all kinds of horror stories about how an adulterated drug or a 
fake substance could be imported from the United States so the patient 
would not be getting the medicine that they need, or even worse. But 
the real point is that that can happen within the United States just as 
easily, and that what we really want is we want the FDA to do its job, 
both on drugs that would come back into this country, but also on drugs 
that would be moving within this country, from one State to another 
State.
  It is easy to think, if we have a drug that could cost $2,000 a vial, 
that we could have organized crime create some labels in New York, put 
some substance into that vial, and ship it over to California and have 
a big scam operation going on. I mean, that is happening within the 
United States.
  But what the gentleman is talking about for the vast majority of our 
senior citizens or others who need medicines are not that that vial of 
growth hormone that costs $2,000, but the difference in, if the 
gentleman would put the other chart up with some of the examples of the 
prices, let us take, for example, Coumadin. That is a blood thinner. In 
the United States, it is going to cost $37 for a 30-day supply; in 
Europe it will cost $8.22. It does not make sense for organized crime 
to get involved with changing labels for a drug of that price range 
when it is going to an individual.
  Now, if we are talking about wholesale, larger shipments, then I 
think it is a legitimate concern; but it is also one that I would 
answer just like we did last year, by appropriating more money for the 
FDA to step up its surveillance and make sure that it does not happen. 
But I will tell the gentleman something. If we take that drug that 
costs $500, the Zithromax, $486 for a 30-day supply, we can have just 
as big of a problem with a fake drug within the United States as from 
anything coming from overseas.
  So I believe that these issues are being mixed up in an effort to 
basically defeat what I see as a free market approach to helping bring 
drug prices down in the United States. We have very high prices here 
because there is protection for the high prices here when we cannot 
introduce competition with lower-priced drugs, the same drugs from 
overseas. If we would allow our constituents to be able to order that 
drug from Pharmaworld in Geneva, Switzerland, at half the price, we 
know what would happen here. We know that the competition would drive 
the prices down at our pharmacies in this country too.
  Mr. GUTKNECHT. Mr. Speaker, as I said earlier, markets work.
  Mr. GANSKE. Or, for example, someone's local pharmacist would be able 
to order that drug from the wholesaler at the lower price and would be 
able to pass those savings on to the consumer. That is why this idea 
passed the House of Representatives with 350-plus votes just a year or 
so ago. But I believe, then, that the opponents to that legislation 
brought forward this issue of the fact that there are fake drugs that 
are occasionally found and then used that to try to knock down the 
whole idea of increased competition from overseas.
  Really, the solution is simply, both within the United States and 
from drugs that could come in from abroad, making sure that the FDA 
does its job. This is part of a bill that I introduced on prescription 
drugs. The other main aspect of that bill is that for low-income 
seniors, we would allow them to utilize the State Medicaid drug 
programs up to 175 percent of poverty and get a Medicaid card and be 
able to go to their local pharmacist; and I believe that there is a way 
to work with the pharmaceutical houses on that issue and avoid a 
national drug pricing mechanism. That is a little different issue, but 
the idea that the gentleman from Minnesota (Mr. Gutknecht) has, I 
think, is a legitimate one, and it basically is a free market approach. 
It just makes the market a little bigger. It makes it more global than 
a protectionist policy that stops at our borders that prevents the very 
same drugs made in the United States, made in New Jersey and shipped 
overseas as versus consumed here, the very same drugs, from coming back 
in at a somewhat less price.
  So tomorrow, when we debate this, we will probably not have that much 
time. It will probably be a time-limited amendment. There have been a 
lot of opponents that have been putting newspaper ads into newspapers 
around the country or even running television

[[Page 12760]]

and radio ads on this issue; but I will tell the gentleman, I have a 
lot of constituents back in Des Moines, Iowa, who, when they go down to 
Texas for the winter, they take their prescriptions, they go across, 
they look at the labels, they see it is made in the United States, the 
same drug, they bring it back for half price. The gentleman's amendment 
tomorrow would allow them to continue to do that. I think that it would 
be somewhat difficult for many Members of this House to switch their 
vote from supporting that idea last year to voting against it this 
year.
  I yield back to the gentleman from Minnesota.
  Mr. GUTKNECHT. Mr. Speaker, I agree with the gentleman. I think 
Members understand this issue, and it really is a choice between are 
you going to stand with your seniors who are having a difficult time 
affording their prescription drugs, or are you going to defend the FDA 
bureaucracy and the pharmaceutical industry. I think that really is the 
vote. At some point, if they vote, particularly if they change their 
vote this year, they are going to have to explain this chart to their 
constituents. They are going to have to explain why they should have to 
pay $30.12 for Glucophage in the United States when their European 
friends can buy it for $4.11.
  Let me just talk briefly, if I can, about the whole issue of safety 
because frankly, that is an area where our opponents have really 
focused in and there have been a lot of scare tactics, as the gentleman 
mentioned, running newspaper ads and radio ads and television ads. But 
the interesting thing is at least in my area, my seniors are a whole 
lot smarter than those ads, because most of the calls that are coming 
in are saying absolutely, this is the right way to go. They understand 
these price differences, they understand safety, they understand that 
they are willing to take a slight risk. The most important thing is 
when they go down to the local pharmacy, they might get the wrong 
medication. It might get in the wrong bottle. There is always some 
element of risk.
  Out there in New York Harbor, it is called the Statue of Liberty, it 
is not called the Statue of Security. We always take some risk. I 
cannot say that my amendment is risk-free, but as the gentleman 
indicated, the system today is not risk-free. But here is the 
interesting thing. In all of the advertising, they do not mention any 
people who have ever been injured by bringing legal drugs into the 
United States with a prescription. Not one. There is no known study 
that demonstrates that public health has been injured by patients 
importing legal medications with a prescription under the order of 
their doctor.
  What is more, millions of Americans have no prescription drug 
coverage. And as I said earlier, a drug that one cannot afford is 
neither safe nor effective. That is when people start cutting up their 
pills. That is when they start looking to back-street vendors or people 
who may be selling adulterated drugs. Let us just talk about safety, 
because when we mention the FDA, we talk about drugs and medical 
devices and so forth, but we forget that part of the reason this 
amendment is in order to the agriculture appropriations bill is because 
it is the Food and Drug Administration. They get their money through 
the agriculture appropriation bill.
  I asked my staff a few weeks ago, I said, now, wait a second. We 
import literally hundreds of thousands of pounds of raw meat every day. 
We import millions of pounds of fruits and vegetables. There must be 
some studies that people get sick, because I remember a couple of years 
ago, there were some kids who had gotten sick, about 200 kids who got 
sick from eating strawberries imported from Mexico. Maybe the gentleman 
remembers the story, that somehow, some pathogen had gotten on the 
strawberries and they got sick. Well, what did the FDA do about that? 
The truth is, almost nothing.
  Mr. GANSKE. Mr. Speaker, if the gentleman would yield, in that 
situation, what Congress responsibly does is it provides the resources 
to the USDA to do those inspections at the border. That is why, for 
instance, we have increased our funding for making sure that Foot and 
Mouth Disease does not get into the United States. That is why last 
year we appropriated $23 million extra dollars for the FDA to do its 
appropriate job with monitoring to make sure that drug shipments that 
will come back in are the real thing.
  But still, I just have to get back to this point, and that is that 
one can go down to the local pharmacy, they have their medicine from 
somewhere in California or New Jersey or Florida. What is their level 
of confidence? Their level of confidence is that we have an FDA that 
monitors that every so often. But every so often, once in a while, very 
rarely, especially with this particularly very, very high-priced drugs, 
they have found that there have been some fraudulent drugs. They are 
doing their job when they find that. And they will do their job if 
Congress appropriates the appropriate amount of money to monitor any 
medicines coming back into the country from Switzerland or Germany or 
Ireland or Canada. I mean, it is not a problem that cannot be solved.
  Mr. Speaker, I would tell the gentleman, the savings to the 
individual that we are talking about is the difference between, as the 
gentleman has already said, is the difference between many times their 
having the drug at all for their heart failure or for their high blood 
pressure or for other serious conditions. There is no question. We 
would not be dealing with the issue of high cost of prescription drugs 
in this Congress, it would not have been such a big issue in the last 
presidential campaign if this were not a real problem.
  So I commend my colleague from Minnesota for talking about this. I 
look forward to the debate tomorrow on this amendment. I do think that 
the gentleman's amendment is well thought out because, correct me on 
this, but there is nothing in the gentleman's amendment that would 
prevent any funding for the FDA to do its job; is that correct?
  Mr. GUTKNECHT. No, it just simply says you cannot use the money to 
pursue law-abiding citizens who have a legal prescription.
  Mr. GANSKE. But there is no decrease in the funding overall for the 
FDA's surveillance.
  Mr. GUTKNECHT. No. We have made it clear to the FDA, as we did last 
year, you tell us what you need to do this job, and we will see that 
you get the funding. They asked for $23 million. We appropriated $23 
million. Then after we had appropriated the $23 million and literally 
let them write the language, they reneged on the deal. So this year, in 
effect we are saying, and we really mean it.
  Now, in conference committee I am willing to work with them to get 
this done.
  Mr. Speaker, I do want to come back briefly, and I know the gentleman 
has to go; but I want to come back to the safety issue. There is 
another secret that the FDA does not want to talk about, and I started 
to mention how many tons of raw meat and fruits and vegetables come 
into the United States. There has been concern about pathogens and what 
they can do. The gentleman is a physician; and I might just ask him, if 
someone gets salmonella, what can happen?

                              {time}  2130

  Mr. GANSKE. Well, one can die.
  Mr. GUTKNECHT. One can die. In fact, I had a friend who got 
salmonella. He was virtually blinded. He can still see, and I do not 
know what his vision level is, but he almost died, and he ended up with 
a severe loss of vision from salmonella.
  I did not know until this particular episode how serious it was, and 
that one of the consequences can be a loss of vision. This is a study 
done by the FDA in 1999. They analyzed 1,003 samples of produce items 
coming into the United States from other countries. I have the numbers 
here in terms of how much we import from different countries.
  From Canada, for example, the latest year we have, we imported 
335,000 metric tons of beef into the United States. We imported 322,000 
pounds of pork. We imported from Mexico a grand total of 3.1 million 
metric tons of fruits and

[[Page 12761]]

vegetables from Mexico. We imported from South America over $742 
million worth of fruits and vegetables from South America.
  Now, we import a lot of food into this country every single day. Here 
are the numbers. According to their study, the total percentage of food 
that was contaminated with either salmonella, shigella, and I am 
probably not saying that right, or E. Coli, the total percentage of 
that sample that they took was 4.4 percent.
  Now, we know people get sick every single day in the United States. I 
have had food poisoning twice in my life. We know there are thousands 
of people who get sick from food poisoning, from salmonella. We know 
that is serious. What is the FDA doing to inspect every single piece of 
produce, every pork belly, every carcass of beef that comes into the 
United States?
  Do Members know what they are doing? It would not be fair to say 
nothing, but it would be almost fair. Almost nothing is done.
  I just want to make one last point, and it is this. What the FDA is 
doing in terms of prescription drugs is they are going to build a wall 
about a mile high. Yet, when it comes to food that we eat every day, of 
which, by their own study, 4.4 percent is contaminated with salmonella 
and other dangerous pathogens, there is almost no inspection, almost 
none. It comes right across the border.
  If we are going to say we have to be absolutely certain of every 
single package of pharmaceuticals, then by golly, should we not say the 
same for fruits, for vegetables, for pork bellies? That is all I am 
saying. I am willing to work with them, and with new technology I think 
we can have a system that will be far safer than it is today, but they 
do not want to work with us.
  Mr. GANSKE. Continuing the gentleman's analogy, Mr. Speaker, what the 
gentleman is saying is that there is not anyone in this House who is 
going to propose that we cut off all imports of beef or vegetables or 
fruits that come into the United States. Nobody is proposing that. If 
there is a problem related to pathogens in meat or in some of those 
vegetables, that is why we have a USDA. That is why we have an 
inspection process. That is why we appropriate a certain amount of 
money.
  If there is a problem, then we will appropriate more funds for the 
inspection to make sure that our food and vegetables coming into the 
United States are safe. But as the gentleman has pointed out on 
prescription drugs, there is no known scientific study demonstrating a 
threat of injury to patients importing medications with a prescription 
from industrialized countries.
  When we went to the Food and Drug Administration last year, we said, 
``If there is an increase in the flow of reimported drugs, what do you 
think you need to do to adequately inspect those to make sure there is 
not a problem?'' They told us, and we appropriated that. We can 
continue to do the same.
  The real question is, do we allow some competition to help lower the 
cost of prescription drugs. I think it will be a very interesting vote 
here on the floor tomorrow on this amendment, because I think that the 
opponents to last year's legislation have seized upon a red herring. 
They have seized upon the fact that even within the United States there 
have been a few examples of exceptionally high-priced drugs where there 
has been fraud. Then they say, ``Well, see, if there have been a few 
cases here in the United States, that could happen from drugs imported 
from abroad.''
  I think my response and the gentleman's response to that would be 
that that is even more reason why we adequately fund the FDA, but it 
can happen in the United States just the same as it could happen on a 
reimported drug. That is not a reason per se to argue against 
reimportation.
  Mr. GUTKNECHT. Mr. Speaker, here is another chart that basically says 
we have to do something to bring our prices into line. Last year the 
average senior in the United States, well, seniors in the United States 
got a cost of living adjustment in Social Security of 3-\1/2\ percent. 
Total expenditures on pharmaceuticals went up 19 percent. We cannot 
continue this. This will eat us out of house and home. This kind of 
thing, this is what is causing consumers to look at ways that they can 
save some money.
  This chart, as I say, when our colleagues vote tomorrow, and I have 
prepared this and I will make this available to any Member who wants a 
mailing in a sense explaining, A, the problem, the chart, the 
differentials, and it also answers the four most commonly asked 
questions or arguments against this simple little amendment. Anybody 
who wants a copy can get a copy of the amendment. It is a very simple 
amendment.
  Mr. GANSKE. Mr. Speaker, I wonder if the gentleman would mind reading 
that amendment.
  Mr. GUTKNECHT. I would be happy to. It is now in the Congressional 
Record, ``Amendment to H.R. 2330 as reported offered by Mr. Gutknecht 
of Minnesota.''
  ``At the end of Title VII, insert after the last section preceding 
any short title the following section, section 7: None of the amounts 
made available in this act to the Food and Drug Administration may be 
used under Section 801 of the Food and Drug and Cosmetic Act to prevent 
an individual who is not in the business of importing prescription 
drugs within the meaning of Section 801(g),'' and I am not a lawyer, 
but we had three very smart ones help write this, ``of such act from 
importing a prescription drug that, 1, appears to be FDA approved; 2, 
does not appear to be a controlled substance,'' and we do not even 
allow codeine under my amendment, we are not talking about any 
controlled substances or narcotics, ``or, number 3, and appears to be 
manufactured, prepared, propagated, compounded, or processed in an 
establishment registered pursuant to section 510 of such act.''
  In other words, it has to be made in an FDA-approved plant. It has to 
be sold through FDA-approved channels. It has to be sold with a legal 
prescription.
  Again, simply put, this says the FDA cannot spend its resources 
chasing law-abiding citizens who are bringing in legal drugs with a 
legal prescription. That is all we are saying in this amendment. We are 
not talking about bulk reimportation.
  Mr. GANSKE. If the gentleman will yield further, Mr. Speaker, there 
is nothing in the gentleman's amendment that reduces the amount of 
funding to the FDA?
  Mr. GUTKNECHT. No. It just says they cannot spend the money chasing 
law-abiding citizens. Go after the people who really are the problem.
  More importantly, I would love to see the FDA do a better job of 
policing the fruits and vegetables, and the pork bellies and all the 
beef and raw meat that comes into this country every day.
  I do not want to scare people, but that was a scary number to me. 
Does it not bother the gentleman that 4.4 percent of the samples that 
they tested had either salmonella, shigella, or other dangerous 
pathogens present on the product? That bothers me.
  The gentleman has a pretty good solution to some of this. It is 
electronic pasteurization. That is the term I like to use. Frankly, I 
think we need to move down that path. But this is the scary thing. If 
the gentleman has ever had food poisoning, in some respects I think it 
is far more dangerous than people trying to save a few bucks on 
coumadin by buying it through a pharmacy in Winnipeg, Manitoba.
  Mr. GANSKE. If the gentleman will yield further, Mr. Speaker, 
speaking from personal experience, I have had a life-threatening 
experience with food poisoning, which became a case of encephalitis. It 
is a serious problem.
  I believe that the USDA is doing a pretty good job on its inspection 
of meat and vegetables, fruit. I would certainly be in favor of 
additional funding for that, and I am in favor of additional funding to 
help the FDA do its job of monitoring the validity of drugs in this 
country, as well as that that would be imported or reimported.
  I just want to commend my colleague, the gentleman from Minnesota, 
for bringing this important issue to the attention of our colleagues.
  Mr. GUTKNECHT. I thank the gentleman from Iowa (Mr. Ganske) for

[[Page 12762]]

coming down to visit with us tonight. This is a very important issue.
  Ultimately, if we open up the markets and we allow American consumers 
to have access to prescription drugs at world market prices, I believe 
that this simple little amendment, once fully implemented, could save 
American consumers $30 billion.
  I may be wrong, it may be $28 billion, it may be $31 billion, but 
even here in Washington, that is a lot of money. If one is a consumer 
that needs a drug, like that lady with that ointment, and one can save 
$1,200 a year buying the same drug that comes from the same 
manufacturer from the same FDA-approved facility simply by picking up a 
phone and making a $2 phone call to Ireland, I do not think we as 
public policymakers should stand idly by and allow our own FDA to stand 
between American consumers, and particularly American senior consumers, 
we should not and cannot stand idly by and allow our own FDA to stand 
between those people and lower prescription drug prices.
  I just want to close with a few other points. Some say a Medicare 
drug benefit will eliminate the need for importation and open markets. 
Mr. Speaker, if we think about that argument for even a moment we will 
realize that simply shifting high drug prices to the government only 
transfers these huge pharmaceutical bills to the American taxpayers.
  Moreover, Medicare coverage will not help the millions of Americans 
who currently have no prescription drug benefit. So simply shifting the 
burden of $300 billion, or whatever the number we ultimately come up 
with, and I support expanding the Medicare program. In fact, I think 
the gentleman from Iowa (Mr. Ganske) has the best program in doing it 
through the Medicaid systems that every State already has in place.
  But it is not an answer to just create a new entitlement funded by 
the Federal Government. If we do not get control of prices of 
prescription drugs, if we continue to allow what really amounts to 
unregulated monopolies, where American consumers, through the Tax Code, 
through the research dollars that taxpayers pay for and ultimately 
through the prices that they pay for, if we stand idly by and say, 
well, I guess American consumers have to pay for all of the research of 
all of the governments and all the other people of the rest of the 
world, then shame on us. Shame on us. We have an opportunity tomorrow 
to set the record straight.
  We do not necessarily want price controls in the United States. We do 
not want a huge bureaucracy and more regulations. But we do want to 
have access to markets.
  In a couple of weeks, we are going to have another great debate about 
free trade. The President of the United States, I have supported giving 
the President what used to be called fast track trading authority. Now 
I think we have a somewhat different name, advanced trade authority or 
trade promotion authority. There is some other term for it.
  Basically, I support giving the President more lattitude to negotiate 
trade agreements. I support that idea. I support free markets.
  However, Mr. Speaker, I support free markets when it comes to 
American consumers, too. We cannot just have free markets when it 
benefits large corporations, we have to have free markets when they 
benefit consumers, too.
  This idea that we are going to stand idly by and allow American 
consumers to pay three, four, five, six, seven times more for the same 
prescription drugs in the Information Age, as they say back home, that 
dog will not hunt.
  I do not know if we are going to win this debate tomorrow on the 
amendment or not. I do not know what is going to happen. We have given 
every good argument. We have talked about free trade, about safety, 
about prices, about how we can help American consumers.
  I do not know whether we are going to win this amendment tomorrow, 
but we are going to fight a good fight. We are saying to the 
administration, it is time for them to decide, are they going to stand 
on the side of the big pharmaceutical industries? Are they going to 
defend an FDA bureaucracy which cannot even protect American consumers 
all that well from food-borne pathogens? Or are they going to stand 
with American consumers, stand with seniors?
  I will say this, if the FDA decides that they want to take Grandma to 
court for trying to save an extra $35 on a three-months' supply of 
coumadin, some of the people in this room are going to be there on the 
courthouse steps to meet them.
  This is an important issue. It amounts to billions of dollars. It is 
the right thing to do. It is good policy, and ultimately, it means good 
things for American consumers.
  Frankly, I think in the long light of history it will be good for the 
pharmaceutical industry, because it will force the Europeans to rethink 
their pricing structures. It will level the playing field. That is what 
we want to do, and we hope tomorrow, with the support of the Members of 
this Congress, we are going to get that done and send a clear message 
that we stand with American consumers, we stand with free markets.
  It is time for us to say the subsidization of the starving Swiss must 
end.

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