[Congressional Record (Bound Edition), Volume 148 (2002), Part 10]
[Senate]
[Pages 13204-13213]
[From the U.S. Government Publishing Office, www.gpo.gov]




  GREATER ACCESS TO AFFORDABLE PHARMACEUTICALS ACT OF 2001--Continued

  The PRESIDING OFFICER. Who yields time?
  The Senator from Michigan.
  Mrs. STABENOW. I thank the Chair, I yield myself up to 15 minutes 
under the agreement.

[[Page 13205]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. STABENOW. Madam President, this is a very important second-degree 
amendment that not only will help our seniors be able to lower the 
prices they pay for prescription drugs, as my colleagues have said. I 
thank the Senator from Minnesota for his ongoing leadership on this 
issue and, of course, the Senator from North Dakota for his sponsorship 
and ongoing leadership and advocacy, as well as my other colleagues who 
are cosponsoring this amendment.
  This not only affects our seniors, this affects everyone. It affects 
the president of Michigan State University, who called me about his 
health clinics and his college of medicine looking for ways to be able 
to lower prices so that he does not have to deal with possibly laying 
off more staff, which he had to do this year as a result of the 
dramatic increases in the health care costs at the university.
  It addresses the big three automakers, small businesses, families, 
and everyone who is paying exorbitant prices for prescription drugs.
  I want to start by quoting our President, President Bush, when he was 
a candidate for President. He indicated that he thought this idea was a 
good idea. He said:

       Allowing the new bill that was passed in the Congress made 
     sense to allow for, you know, drugs that were sold overseas 
     to come back and other countries to come back into the United 
     States.
  That was what then-candidate George W. Bush and now President Bush 
said makes sense. It does make sense. It made sense before. The problem 
before was that there was an amendment added which basically killed our 
ability to be able to do this. We know that same amendment which is 
supported by the pharmaceutical industry will be offered later. There 
will be an attempt to kill it again.
  But we are hopeful that our colleagues will join with us in what is a 
very reasonable proposal that addresses any legitimate issues regarding 
safety and health and allow us to open the border to Canada and be able 
to provide the kind of competition we need to lower prices.
  I think it is important also to reiterate that at a September 5, 
2001, hearing before the Senate Commerce Committee's Subcommittee on 
Consumer Affairs, William Hubbard, FDA Senior Associate Commissioner, 
testified:

       I think as a potential patient, were I to be ill and 
     purchase a drug from Canada, I would have a relatively high 
     degree of confidence in Canadian drugs.

  We know the Canadian system is similar to ours as it relates to the 
regulatory and safety system.
  We feel very confident that this modest proposal of simply opening 
the border to Canada--and we know that Canada right now exchanges goods 
and services with us every single day. We have the largest port of 
entry in Detroit, MI, which I am proud to represent, with over $1 
billion in goods going across. We trade every day with them.
  We believe this proposal will allow one thing to be traded which is 
desperately needed by our citizens and is not now allowed to go back 
and forth across that port of entry. It makes sense. This is a 
reasonable, modest proposal.
  Instead of opening all of our borders, some would argue that this 
does not go far enough; that we should open to Mexico, Europe, or other 
places around the world. But we are taking a modest step to begin to 
show that this kind of approach can work.
  We want to simply start with Canada with a very modest approach that 
will allow us to be able to share with our neighbors to the north the 
ability to bring back to our citizens American-made prescription drugs 
which are sold in Canada.
  I think this is an issue of fairness as well because we are talking 
about prescription drugs on which we helped to underwrite research. As 
I have said so many times, $23.5 billion this year alone was given by 
the taxpayers of this country. And I support that strongly. I support 
having that be a higher number. I think basic research into new 
potential treatments is absolutely critical and is a good investment. 
But we are making those investments. We are then giving that 
information to the drug companies, that pick up the information and 
then proceed to do their own research and development.
  We allow tax writeoffs for that research and development, tax 
credits, and tax reductions. We subsidize them further. We allow up to 
20-year patents so they can recover their costs because we know it 
costs a lot to research and develop new drugs. So we let them be able 
to recover those costs without competition for their name brand. So we 
highly subsidize--highly subsidize--this area; the most profitable 
industry in the world, highly subsidized by American taxpayers.
  Then what do we get at the end of that process? The highest prices in 
the world. One of the reasons is we close the borders to competition. 
And we are subsidizing heavily all of the research and development of 
new medications that the Canadians enjoy, that people around the world 
enjoy, while we in fact pay the highest prices in the world.
  I have had an opportunity to take a number of bus trips to Canada; 
the latest was on June 10 of this year. I will just share with you some 
of the differences. My colleagues have talked about that as well. But 
it is shocking to take a mere 5-minute bus trip across a bridge or 
through a tunnel and see the dramatic differences in prices.
  I might add, I am not interested in continuing to put people on buses 
or in cars to have to go over to Canada to get those lower priced 
medications. What we want is the ability to bring them back, so that 
the neighborhood pharmacy can offer these same kinds of prices. That is 
what this is all about, to bring them back and place them in the local 
pharmacy.
  But it is shocking when we look at the differences. Zoloft is an 
antidepressant drug. In Michigan, it costs $220.65 for a monthly 
supply; in Canada, $129.05. So it is $220 versus $129. That difference 
can buy food, pay the electric bill, pay the rent, it can be the 
difference between someone having a quality of life that makes sense 
and one that involves struggling every day to pay for their 
medications.
  We also know one of the most dramatic differences is tamoxifen, which 
I have spoken about here before. Tamoxifen is a breast cancer treatment 
drug. When we went to Canada, we were able to get it for $15. And back 
in Michigan it is $136.50.
  If you have breast cancer and you are struggling to pay for your 
medications to get the treatments you need to deal with all of the 
other issues in your life as well, the difference between $15 and $136 
a month is a big deal. That is why this amendment is a big deal. I hope 
our colleagues will join overwhelmingly in our amendment--which is, in 
fact, a bipartisan amendment, a tripartisan amendment--to say: Yes, it 
is time to be fair to Americans.
  This is about fairness for Americans. It is about competition. It is 
about opening the border in a way that maintains safety for our 
citizens.
  I would like to speak to a couple of the arguments that I know we 
will hear from colleagues who are opposing this amendment and what the 
drug companies have said.
  The drug companies have said that bringing those prescription drugs 
back from Canada is not safe. For the record, drugs are already 
frequently imported into this country, but predominantly by the 
companies themselves, by manufacturers.
  I also note that individual consumers now are allowed to bring back 
up to a 90-day supply. Because of the concerns that have been raised, 
they have looked the other way at the FDA and allow people, for 
personal use, to bring back up to a 90-day supply.
  In fact, according to the International Trade Commission, $14.7 
billion in drugs were imported into the United States in the year 2000, 
and $2.2 billion in drugs sold in Canada were originally made in the 
United States.
  So it is ironic that the drug makers are saying that drugs cannot 
safely move between the borders of the two countries. They do already. 
The issue

[[Page 13206]]

is price. The issue is who controls them moving back and forth. When 
the companies want to move them back and forth, they think it is fine. 
When the pharmacists want to move them back and forth or individuals 
want to move them back and forth and get a lower price, it is not fine. 
They are the same medications. It is a question of who controls them.
  In fact, in recent years the FDA has allowed thousands of American 
consumers to import from Canada medications for their personal use 
every year. The FDA Senior Associate Commissioner, as I said before, 
indicated that as a consumer he would have a relatively high degree of 
confidence in drugs purchased from Canada. So these arguments do not 
make sense. The arguments we will hear about safety do not make sense.
  We will hear that safety standards in Canada are more lax than here 
in the United States. There was a September 2001 report by the 
nonpartisan Congressional Research Service--which we all use--which 
confirms that the United States and Canadian systems for drug approval, 
manufacturing, labeling, and distribution are similarly strong in all 
respects. Both countries have similar requirements and processing for 
reviewing and improving pharmaceuticals, including ensuring compliance 
with good manufacturing practices.
  Both countries also maintain ``closed drug distribution systems'' 
under which wholesalers and pharmacists are licensed and inspected by 
Federal and/or local governments. All prescription drugs shipped in 
Canada must, by law, include the name and address of each company 
involved along with the chain of distribution.
  Let me finally address one of the other myths I am sure we will hear 
more about today, and that is that somehow our bill will allow Canada 
to become a conduit for counterfeit or contaminated drugs into the 
United States.
  On the contrary, this bill provides for safe protections, many of 
which are not in current law. We go beyond current law, which we all 
know needs to be done now as we look at so many areas of homeland 
security.
  We have gone beyond what is currently in place. If implemented, this 
bill would have the potential to decrease, more than today, the 
possibility of allowing counterfeit drugs into the United States.
  We would provide there be strict FDA oversight, proof of FDA approval 
of imported medicines. There must be a paper chain of custody, which is 
important. Only licensed pharmacists and wholesalers would be able to 
import medications for resale. They would have to meet requirements for 
handling as strict as those in place by the manufacturers--equally 
strict as what the manufacturers do today.
  There will be lab testing to screen out counterfeits, registration 
with Canadian pharmacists and wholesalers by HHS. There will be lab 
testing to ensure purity, potency, and safety of medications.
  We also say that the Secretary of Health and Human Services can 
immediately suspend this provision, immediately suspend the importation 
of prescription medicines that appear to be counterfeit or otherwise 
violate the law.
  We have made it very clear that they can immediately suspend ``on 
discovery of a pattern of importation of the prescription drugs or by 
the importer that it is counterfeit or in violation of any requirement 
under this section or poses an additional risk to the public health''--
they can immediately suspend.
  This is a responsible provision. It is a moderate provision. It opens 
the border to a country that we trade with every day, whose system is 
similar to ours. It allows actions if in fact anything is found to 
create a threat to Americans in terms of our health and safety. It 
allows immediate action and suspension of this new provision.
  I believe we have put into place something that is reasonable. It is 
logical. It is long overdue. I am hopeful that we will have a strong 
bipartisan vote.
  If we want to lower the prices immediately, without much, if any, 
expenditure of taxpayers' dollars--if we want to do it immediately--all 
we have to do is drop the barrier at the border to Canada.
  I urge my colleagues to join us.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Madam President, I yield myself 5 minutes.
  The Dorgan amendment before the Senate has enormous potential to make 
more prescription drugs more affordable for more people. The amendment 
is particularly important for our seniors, most of whom live on fixed 
incomes and constantly have to decide whether they can afford to fill 
those prescriptions.
  We have a bizarre situation. We manufacture drugs in America, but 
they are sold at cheaper prices in other countries. Just a few 
examples: Brand name drugs cost an average of 31 percent less in the 
United Kingdom than they do in the United States; 35 percent less in 
Germany; 38 percent less in Canada; 45 percent less in France; 48 
percent less in Italy. The General Accounting Office has studied 121 
drugs and found that on average prescription drugs in the United States 
are priced 34 percent higher than the exact same products in Canada.
  I travel around Michigan, and I listen to the stories of citizens who 
are trying to pay for expensive prescriptions and wonder why their 
neighbors in Canada, just a few miles away, are able to buy the exact 
same drug, manufactured in America, often for half the price.
  We conducted a survey this last February of two of the most commonly 
prescribed prescription drugs. In every case, the prescription in 
Canada cost significantly less than the same drug in Michigan. For 
example, we looked at a number of pharmacies on both sides of the 
border. A 1-month supply of Prilosec, a gastrointestinal drug, costs 
about $126 in Michigan but only $71 in Canada. Similarly, a 1-month 
supply of Lipitor, a cholesterol-lowering drug, costs $74 in Michigan 
but $41 in Canada.
  As a result of these enormous price disparities, we have the 
spectacle of American citizens, mostly seniors, going into Canada by 
the busload to buy American-made prescription drugs at a fraction of 
what they have to pay here. It is absurd. It is unconscionable that we 
give pharmaceutical manufacturers tax breaks and direct grants to bring 
new drugs to the market, and then those drugs cost more in America, 
where they are made, than they do in other countries. We subsidize the 
drug costs for the rest of the planet, and that has to change.
  The Dorgan amendment fixes this problem in two fundamental ways: 
First, the amendment allows U.S. licensed pharmacists and drug 
wholesalers to import FDA-approved medications from Canada. Second, the 
amendment would allow individuals to import prescription drugs from 
Canada as long as the medicine is for their own personal use, as 
evidenced by a prescription, and is a 90-day supply or less.
  These provisions will allow American citizens, through the 
appropriate channels, to take advantage of lower prescription drug 
prices in Canada.
  According to a Boston University School of Public Health study, drug 
reimportation, just from Canada, could have saved consumers $38 billion 
in the year 2001, an enormous sum.
  In the year 2000, the Senate approved strikingly similar legislation 
by a strong bipartisan vote of 74 to 21. Unfortunately, a technical 
amendment blocked implementation of the legislation. Now the Senate can 
act again to bring lower priced prescription drugs to people who 
desperately need them. We can act to bring in some competition. We can 
act to bring in some free trade. American scientific know-how has led 
to the development of hundreds of lifesaving and life-enhancing 
prescription drugs.
  Some of the newer prescription drugs are modern-day medical miracles 
which help millions of Americans lead healthy lives well into their 
golden years.
  These drugs won't do any good if people can't afford them. It is that 
simple and that demanding.

[[Page 13207]]

  I hope our colleagues will support the Dorgan amendment and allow for 
the reimportation of prescription drugs.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from Tennessee.
  Mr. FRIST. Madam President, I yield myself 20 minutes to speak in 
opposition to the amendment.
  The PRESIDING OFFICER. From whose time?
  Mr. COCHRAN. The time should be charged to that under the control of 
Senator Gregg. He has asked me, as his designee, to yield.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. FRIST. Madam President, I rise to address the issue introduced in 
the last hour and a half; that is, the issue of reimportation of drugs, 
especially as it affects the safety of the American people. They have 
been introduced by the proponents of this legislation as myths. By 
calling them myths, it is as if in some way we should say they are 
myths. They are not real, therefore, let's proceed down this path.
  I want to give a little bit of historical perspective to these so-
called myths and explain to my colleagues why I believe they are not 
myths but reality. The potential of such reality can result in direct 
harm as we look at public health and safety.
  I look forward to the afternoon because the debate will continue. The 
debate ultimately will start with cost and buses running back and forth 
to Canada. Then Senators will say that this idea is appealing and 
critically important to pass so we can lower the cost of prescription 
drugs. We are all for lowering prescription drugs costs. Prescription 
drugs cost too much; they are out of reach today for too many people.
  The focus is on cost. It is motivating and a driving force because it 
is something on which we all agree. Prescription drugs costs too much 
today--the rate of increase is too much. But to focus on cost without 
focusing on public health and safety is wrong and irresponsible.
  If we look at the legislative history of the consideration of 
reimportation of drugs and pharmaceutical agents from other parts of 
the world outside of the borders of the United States to this country, 
we have a lot to learn. It is a rich history in terms of lessons 
learned.
  I will not focus on the cost issue, but let me just dismiss the cost 
issue in terms of my comments now by saying there is no evidence that 
this amendment will guarantee price savings. For seniors, individuals 
with disabilities, or the American people who are listening today, 
there is no evidence to indicate this. It is pretty dramatic, holding 
up two bottles and saying one comes from another country and one from 
the here. The assumption is that it will reduce the cost of 
prescription drugs in the United States, however, that evidence is not 
there.
  What I want to focus on--and I think it is even worse than not being 
able to make that assurance to the American people--is my concern with 
health.
  From July 1985 to June 1987, nine hearings were held and three 
investigative reports issued regarding the issue of reimportation of 
pharmaceuticals. These efforts, over that time, led to the enactment of 
the Prescription Drug Marketing Act of 1987. That law was specifically 
designed to protect America's health and safety against the risks of 
drugs that in some way may have been altered or counterfeit imported 
medicines.
  The act, a product of the debate at that time, found among other 
things, ``a significant volume of pharmaceuticals are being reimported. 
These goods present a health and safety risk to American consumers 
because they may become subpotent or adulterated during foreign 
handling and shipping.''
  The overall purpose of the Prescription Drug Marketing Act of 1987 
was to ``to decrease the risk of counterfeit, adulterated, misbranded, 
subpotent or expired prescription drugs reaching the American public.''
  In the Committee report which accompanied the Prescription Drug 
Marketing Act, the Commerce Committee concluded:

       Reimported pharmaceuticals threaten the American public 
     health in two ways. First, foreign counterfeits, falsely 
     described as reimported U.S.-produced drugs, have entered the 
     distribution system. Second, proper storage and handling of 
     legitimate pharmaceuticals cannot be guaranteed by U.S. law 
     once the drugs have left the boundaries of the United States.

  I mentioned the history because it is incumbent upon us--as we look 
at this legislation and change, modify, defeat, pass, improve, 
strengthen this legislation--that we have to address the issues that 
were so prominently raised at that time. That was from 1985 to 1987. At 
that time, we did not have nearly as many cost concerns as we do today.
  In 2000, as was mentioned on the floor, Congress revisited the issue 
and passed at that time the Medicine Equity and Drug Safety Act. This 
act allowed reimportation of prescription drugs if the Secretary of 
Health and Human Services could guarantee the safety and certify that 
cost savings would result. Safety and cost savings, again, are two 
issues that remain current today. We want to bring down the cost of 
prescription drugs, but we certainly do not want to do it if it is 
going to hurt the American people.
  Since that time, two Secretaries of Health and Human Services--of two 
administrations--have stated that the Food and Drug Administration 
cannot guarantee the safety of reimported prescription drugs.
  In fact, then-Secretary Shalala called it ``impossible . . . to 
demonstrate that [reimportation] is safe and cost effective.'' Let us 
jump to the next administration.
  Secretary Thompson also concluded that reimportation would ``pose a 
greater public health risk than we face today and a loss of confidence 
by Americans in the safety of our drug supply.''
  Those were Secretaries of Health and Human Services and their overall 
approach in reimportation.
  Let us now turn to the Commissioners of the FDA. When FDA Deputy 
Commissioner Lester Crawford was asked to comment on ``whether 
reimportation (from Canada) now raises greater challenges than it did 
previously''--meaning prior to September 11--and ``what is your view as 
it relates to safety as it relates to drugs for the consuming 
Americans,'' Deputy Commissioner Lester Crawford replied, ``The problem 
would be if it becomes apparent to the rest of the world, including the 
world of terrorists that we are not interdicting shipments of drugs 
that come from Canada. . . . I think this is a signal to a would-be 
terrorist that this might be a way to enter the United States. . . . It 
also would be a signal to a community that it is not as dangerous as 
terrorists obviously, but to the transshippers and these would-be 
people in various countries that may not have a regulatory system or 
may not have a regulatory system for exported drugs. . . .
  I think the important issue is that we are in a new world, compared 
even to 2 years ago, and that it is incumbent upon us to address this 
whole idea of having drugs produced or imported or reimported from 
outside our boundaries at the same time we are trying to strengthen our 
boundaries in terms of what comes into this country. How careful can we 
be, how assured can we be that a product is not counterfeit, has not 
been adulterated, or is not the product of somebody who has ill intent 
against America. At the same time, we are working to make the borders 
less porous and tightly overseen, we want to make our borders more 
porous when it comes to chemical and pharmaceutical agents.
  Former FDA Commissioner, Dr. Jane Henney, expressed severe 
reservations regarding the importation of drugs. This is from a 
different administration than the current one. Dr. Henney said:

       The trackability of a drug is more than in question. Where 
     did the bulk product come from? How is it manufactured? 
     You're just putting yourself at increased risk when you don't 
     know all of these things.

  Let us go back to another FDA Commissioner. Remember, the FDA 
Commissioners are those people who we have, as a nation, given the 
responsibility of overseeing the public's health and safety of food and 
drugs. Dr. David Kessler, former head of FDA, stated:


[[Page 13208]]

       In my view, the dangers of allowing reimportation of 
     prescription drugs may be even greater today than they were 
     in 1986. For example, with the rise of Internet pharmacies, 
     the opportunities of illicit distribution of adulterated and 
     counterfeit products have grown well beyond those available 
     in prior years.

  That is David Kessler, former head of FDA. He continues:

       Repealing the prohibition on reimportation of drugs would 
     remove one of the principal statutory tools for dealing with 
     this growing issue.

  Let us look back to an FDA Commissioner from the Carter 
administration, Dr. Jere Goyan, who said it best. This is FDA 
Commissioner Goyan:

       I respect the motivation of the Members of Congress who 
     support this legislation. They are reading, as I am, stories 
     about the high prescription drug prices and people which are 
     unable to pay for the drugs they need. But the solution to 
     this problem lies in better insurance coverage for people who 
     need prescription drugs, not in threatening the quality of 
     medicines for us all.

  It is important because, again, in our urge to bring down the cost of 
prescription drugs and restrain that skyrocketing of costs, we do not 
want to put drugs out of the reach of the American people. We do not 
want to do that unintentionally.
  Given the statements of the FDA Commissioners and the Secretaries of 
Health and Human Services, we do not want to open the door and increase 
the risk to the public health.
  Last fall the FDA affirmed its concern about the safety of reimported 
drugs--even those from Canada, and I understand the underlying 
amendment is focusing on one country--stating they could not even 
provide safety assurances for those drugs entering the Nation over our 
northern border. The FDA further noted that reimported drugs ``pose 
considerable risks to consumers because they may be counterfeit, 
expired, superpotent, subpotent, simply tainted, or mislabeled.''
  I point this out early in the debate and want to turn to other people 
and to the other side, who say: Yes, our amendments are written with 
more safeguards in the pieces of legislation that come forward. I think 
that needs to be debated. Ultimately, the safety issue is the key issue 
in addressing this legislation as we shape it and vote for or against 
it.
  I fear that, in spite of the proponents' attempts in the underlying 
amendment to establish a mechanism to assure safety--and it is fairly 
elaborate--a lack of success, lack of assurance of having these safety 
mechanisms, at the end of the day, puts at risk the American people. 
This is all in the interest of bringing down the cost of prescription 
drugs, which is something that we agree with, but there are better and 
more direct mechanisms to deal with that issue of cost.
  We see an elaborate set of safety mechanisms that I think are 
impossible to implement, which wholesalers and pharmacists are not 
equipped to handle and, more importantly, mechanisms that only 
ultimately add--and nobody talks about it--to the cost of prescription 
drugs. Regardless of whether a pharmaceutical is originally 
manufactured here in the United States, once a drug leaves this country 
and crosses borders, I believe it is impossible to ensure that it is 
properly handled. It is out of our reach and our vision. We can sort of 
pass the laws and pass regulations, but in truth, we are not going to 
see it.
  It is impossible to guarantee how it is handled, stored, at what 
temperature it is stored, and whether it is safe for eventual use.
  Most people know--we have talked about this in the Chamber of this 
body--it is very important how drugs are stored, at what temperature, 
and their potency. In fact, certain drugs that are used in a routine 
way, if improperly handled, can become lethal if mishandled in being 
brought back into this country.
  Even more hazardous to the health of Americans is counterfeit 
medicines. I mentioned terrorism, and I do not want to overstate that, 
but again, we are currently working very hard to fight issues such as 
bioterrorism. We are working hard to make sure we are able to track and 
regulate contents of agents that can be used against us. I do not think 
we should be moving in the direction of opening those borders broadly 
when I contend it is impossible, or next to impossible, to guarantee 
their safety.
  There is one interesting example. Gentamicin sulfate is a 
prescription medicine to treat people with resistant infections, 
abdominal infections, and people who are very ill. Several years ago, 
FDA reported that this drug resulted in 17 deaths and 202 serious 
reactions. This drug is a very powerful drug, a very good drug, and one 
of the best antibiotics out there when used in a targeted, specific 
way.
  Ultimately, it was no surprise to later find that the medicines 
causing these 17 deaths were being imported from another country. It 
was not Canada. It happened to be China. Both the current and former 
leaders of the FDA have made it ultimately clear, really crystal clear, 
that they will have a tough time establishing mechanisms that are 
sufficiently elaborate, complex, and detailed enough to ensure 
pharmaceuticals coming into this country from foreign manufacturers are 
safe to use.
  The underlying amendment purports to address drug safety by only 
allowing U.S.-approved drugs to be reimported and incorporating a drug 
testing requirement. Again, it sounds very good, but let me state up-
front--and we can debate it as the day goes on--end product testing, 
after a drug has traveled and handled in certain ways, simply is not 
adequate. End product testing is not adequate to demonstrate that a 
drug was manufactured in accordance with U.S.-approved standard and 
quality requirements.
  Also, testing at the moment of import, at the time it actually comes 
into the country, does not ensure the integrity of the drug throughout 
its shelf life once it arrives here. Drugs are fluid agents. They are 
agents that can be adulterated. They can be changed, and, as I 
mentioned, their storage is critically important.
  I will close mentioning this whole danger of counterfeiting drugs 
because, again, in this environment post-September 11, it is one we 
need to look at. We need to address this issue up-front. It is the new 
environment in which we are working. In that regard, I am hopeful we 
can address this amendment to make absolutely sure we have safe drugs 
for the American people. We need to make sure that we have not opened 
the door at the same time we are putting interest in lowering costs and 
reducing costs over time, opened the door, opened our borders, or made 
them more porous in a way that ultimately will hurt the American 
people.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. How much time remains on each side?
  The PRESIDING OFFICER. The Senator from North Dakota controls 21 
minutes; and the Senator from Mississippi controls 25 minutes.
  Mr. DORGAN. Madam President, I yield 8 minutes to the Senator from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Madam President, I thank the Senator from North Dakota 
for bringing this matter to the attention of the Senate. I am very 
hopeful it will be accepted in the Senate in a short time. There are 
some interesting underlying facts. What we are finding now has been 
referenced during the course of this debate. The United States and its 
taxpayers are subsidizing the world in terms of prescription drugs. 
That happens to be a fact.
  The research for brand and generic drugs is basically now conducted 
in the United States. They have moved dramatically from Europe over the 
recent years. With the doubling of the NIH budget, much of that is 
funding basic research which is essential for the development of drugs. 
So the taxpayer is paying for the funding of the NIH and then paying 
the additional costs at home. Furthermore, these drugs are a good deal 
cheaper outside the United States.
  We are doing for the rest of the world in the area of prescription 
drugs what we are doing for our national security. We keep the Straits 
of Malacca open,

[[Page 13209]]

the Suez Canal open, and the Panama Canal open. The great choke points 
of the world are free because of the U.S. Navy and that is the way it 
is. We wish that it could be better. There are things that could be 
done and should be done in this area. Nonetheless, that is the case. 
That is one issue, if we are able to have prices that are reasonable 
for the American consumer, but we do not have that. One of the 
principal efforts of what we are discussing in the Senate is taking 
steps to assure those families who are in need of prescription drugs 
that they are going to have access to them.
  We have an underlying bill that will make a very important 
difference. The Dorgan amendment, cosponsored by our Democrat and 
Republican colleagues, can make an important contribution to that as 
well, and we will have follow-on amendments.
  Rightfully, it has been identified that safety is a key issue. 
However, we are talking about drugs that are FDA approved and produced 
in plants that have FDA inspections. Many of the safety issues raised 
in Secretary Shalala's letter some years ago in criticism of a much 
broader amendment by the Senator from North Dakota have been addressed 
in this legislation. The safety issues that have been addressed 
included the counterfeiting, the proliferation of handling, and a wide 
range of other issues. They have been addressed in a very serious and 
responsible way.
  We are doing this against a background where we are free, thank 
goodness, of examples or incidents where there has been contamination 
of drugs imported from Canada. That has not been true in terms of 
Mexico and other countries, but it certainly has been true with Canada.
  This is a very modest program, but it is an important one. It is a 
vital program certainly for millions of our citizens who live in or 
around the northern tier States. It has caught on because of the 
frustration of our fellow citizens. And it is a legitimate frustration 
because of the fact that we in the Congress have not taken steps to 
assure that the generic drugs or that brand-name drugs are going to be 
sold at a more reasonable cost. It is out of frustration for that.
  I do not hear those supporting this proposal saying they are in 
strong support of the underlying proposal that will make the 
availability of drugs less expensive for the consumer, or other means 
as well. It is a question of the cumulative effect. This is targeted to 
Canada, where we have high regard and respect for their system of 
handling these ingredients.
  I think the issues which have been outlined and detailed expressing 
reservations about this proposal, certainly with regard to Secretary 
Shalala, and to a significant extent Secretary Thompson, have been 
addressed by the Dorgan amendment. This will be a measured but very 
constructive and important step in assuring that some of our citizens 
get vitally needed drugs.
  As the Senator from North Dakota has pointed out, the fact is that if 
people are not able to get drugs at all because they cannot afford 
them, they are willing to take some risks to be able to get them. That 
is what this is about. We cannot make the excellent the enemy of the 
good.
  The opportunity for getting good quality drugs at reasonable prices 
will make a difference, as the Senator has pointed out with his 
examples of individuals with cancer who otherwise would not be able to 
afford any of the higher-priced drugs. So with all the inevitable 
health hazards that they are facing, it is either these drugs or no 
drugs.
  This is a measured step. It is one that is eminently worthwhile. I 
commend my colleague for offering it, and hopefully it will be 
accepted.
  The PRESIDING OFFICER. Who yields time?
  Mr. DORGAN. Madam President, how much time remains?
  The PRESIDING OFFICER. The Senator from North Dakota has 14\1/2\ 
minutes.
  Mr. DORGAN. Do we know with respect to those who are yielding time to 
the opponents of this legislation, or at least yielding time on behalf 
of Senator Gregg, whether they will be using their time at this point?
  The PRESIDING OFFICER. The Senator from Mississippi has 25 minutes.
  Mr. COCHRAN. Madam President, we are happy to abide by the unanimous 
consent agreement which calls for a vote at 2:30. We have an indication 
that there are Senators who want to talk. I will speak on the subject. 
We already have had remarks by Senator Frist on this subject.
  Mr. DORGAN. Madam President, as the Senator who offered the 
amendment, I reserve some time to close debate.
  I yield 5 minutes to the Senator from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Madam President, I thank my colleague from North 
Dakota, who has worked so hard on this legislation and has done such a 
wonderful job of crafting what is a very reasonable and modest 
approach.
  I did want to respond to comments that had been made a little while 
ago to emphasize again that this is a different proposal than was 
brought before the Congress before it was passed. It is limited to 
Canada where we know there is a very similar safety regulatory 
structure. We are trading back and forth. Our manufacturers of 
prescription drugs go back and forth across the border all the time. 
The only difference is they control the prices, as opposed to giving 
consumers the ability to have lower prices. So this is a different 
system. This is a system that sets up a number of protections, in fact 
more protections than we have in current law.
  So this is actually strengthening, and given the current times that 
we are in, that makes sense. It makes sense to limit this to Canada as 
a way to begin this process and see how it works, and it makes sense to 
add all the safety provisions that are put in. It also makes sense to 
allow the Secretary of Health and Human Services to have the power to 
immediately stop reimportation if, in fact, there is a problem. If 
there is a safety problem, if there is a health problem, if there is a 
concern at all about counterfeit drugs, then the Secretary has the 
ability, based on the evidence, to be able to stop this process.
  So I believe we have built in a number of provisions that are very 
important, that are very responsible, and I believe this plan should go 
forward.
  My colleague from Tennessee also said that there is no evidence we 
will see prices lowered or that we will see the lower prices passed on. 
First, I would absolutely say what we do know. There is great evidence 
that in fact our seniors--in fact everyone--are going to be paying 
higher prescription drug prices every year. We do know that. We do know 
in the last year, the brand name companies raised the prices over three 
times the rate of inflation. We do know that. We do know there is an 
explosion in advertising, two and a half times more in advertising, 
than research. We know there is in fact an explosion in prices going on 
in this country. We do know that our families are desperate, that our 
seniors are desperate, and many have drug bills that are higher than 
their incomes; families struggling to help mom and dad, grandma and 
grandpa.
  We do know our small businesses are struggling to provide health care 
for themselves and their employees. We do know too many workers find 
themselves in a situation where their employer says: We have to have a 
pay freeze in order to be able to afford your health care benefits.
  We know that is predominately because of the rising prices of 
prescription drugs.
  So even if one thinks this is not the best proposal in the world, it 
is better than what is occurring today for American consumers, for 
American families, American seniors. I am very confident, in talking to 
pharmacists, community pharmacists, those who are on the front lines 
around this country, that they would welcome the ability to have a 
lower cost product brought into their pharmacies so they can offer it 
to American citizens.

[[Page 13210]]

  They are on the front lines. They see the senior that walks up, gives 
the prescription for a 30-day supply of a drug, and then looks at the 
bill and comes back and says: Can I get one week's supply or I cannot 
get this at all. Or they take it home and they cut the pills in half. I 
have known couples who both needed the same heart medicine. They buy 
one and share it. We all know the stories.
  I know that pharmacists in our neighborhood pharmacies are very much 
in support of efforts to bring in lower priced prescription drugs. One 
way to do that is by opening the border to Canada.
  So I would simply rise to, again, voice strong support and my 
pleasure at being a cosponsor of this amendment, having worked on this 
issue for a number of years. I urge my colleagues to get beyond the 
scare tactics and to support us in this reasonable, moderate effort to 
add competition and lower prices for our citizens.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. COCHRAN. Madam President, as the designee of Senator Gregg, I 
yield myself such time as I may consume.
  To refresh the memory of Senators on this subject and the fact that 
we have had this issue before the Senate on an earlier occasion, 2 
years ago during the consideration of the annual appropriations bill 
for the Department of Agriculture and the Food and Drug Administration 
and related agencies, the Senator from Vermont, Mr. Jeffords, offered a 
similar amendment to allow drug reimportation. These were prescription 
drug reimportation rights.
  Senator Kohl, who was the ranking Democrat at the time on the 
appropriations subcommittee, and I, serving as chairman, offered an 
amendment to that amendment which required a finding by the Secretary 
of Health and Human Services that the implementation of that amendment 
would not increase risk to public health and safety and that it would 
result in a reduction in the cost of products to consumers.
  This language was modified slightly in conference with the House. The 
word ``demonstrate'' was substituted for the word ``certified,'' but in 
all other respects the amendment survived conference and was a part of 
the law.
  Subsequent to that, Secretary Shalala, who was serving as the 
Secretary of Health and Human Services in the Clinton administration, 
wrote a letter to President Clinton describing her views about whether 
the Department could demonstrate, as required by the law, that the 
reimportation rights would not cause any failure of safety standards 
and that it would reduce the costs of prescription drugs to those who 
reimported them.
  Her letter suggested that she could not make such a demonstration; 
she could not meet the requirements of the law and certify that.
  Then at some point Senator Kohl became chairman of the subcommittee, 
and we thought we would be confronted in the next Congress with the 
same amendment. So we had a meeting in his office with FDA officials, 
Department of HHS officials, and others, to discuss the views of the 
administration on this subject. We had a new administration come to 
town. Secretary Thompson was in the meeting.
  I was impressed and surprised at how much counterfeiting of drugs 
goes on; that countries manufacture and label and package drugs all 
over the world to look exactly like the drugs, some of which are off-
the-shelf medications in our drugstores throughout our country; others 
are prescription drugs you can buy only if you have a prescription from 
a physician. They showed us parcel after parcel, illustration after 
illustration, of how much of this is going on around the world. They 
cautioned we should be very careful about accepting any language that 
would make it easier for the counterfeiters and for those who would 
want to do harm and bring such drugs into the country because there is 
no guarantee of their safety or efficacy, or that the strength stated 
on the package is really what is on the inside.
  By looking at the drugs or the medical devices, one could not tell 
the difference. I could not tell the difference. No one could tell the 
difference to decide whether this was safe or without a chemical 
analysis.
  The point of the story was, we were prepared to insist upon the same 
language in the appropriations bill that we had gotten the Senate to 
approve unanimously the year before, 96 to 0. They voted on the 
language that would make sure we would not be doing anything that would 
affect safety and that we really would be doing something to help 
reduce the cost of prescription drugs to America. But no amendment was 
offered.
  I say that now by way of background and also to suggest to the 
Senate, after we vote on the Dorgan amendment, which says if you are 
going to permit reimportation and you find there is counterfeiting 
going on, you can suspend it. That is what this amendment says. OK, 
that is harmless enough. Let's approve that when we vote at 2:30 on a 
regular vote. We agreed to accept this amendment by voice vote, but 
there will be a recorded vote. I will vote for it. Sure, they ought to 
be able to suspend reimportation if they find it to be counterfeit. But 
guess what. There is counterfeiting and they will find it. It is no big 
secret.
  This amendment is meaningless. What we will need to do after we adopt 
the Dorgan amendment at 2:30, under the agreement I will offer the same 
amendment. We will say that the Secretary of Health and Human Services 
must be able to certify that this will not adversely affect safety or 
be a threat to U.S. consumers, and it will result in cost savings. I 
want the Senator to know we will have an opportunity at that time to 
consider another amendment to this proposal which I hope the Senate 
will also adopt, as it has in the past, by unanimous vote.
  I yield to the distinguished Senator from Utah.
  Mr. HATCH. I thank my colleague.
  Almost 2 years ago today, we visited the issue of whether to allow 
importation of prescription drugs from other countries. The Senate has 
before it today The Prescription Drug Price Parity for Americans Act, 
designed to permit the commercial importation of prescription drugs 
from Canada and to permit personal importation of prescription drugs 
from any country.
  S. 2244 is intended to modify the Medicine Equity and Drug Safety Act 
of 2000, MEDSA, attempts both to address the safety concerns voiced by 
FDA, DEA, U.S. Customs, Secretary of HHS, and others and also expand 
the personal importation exemption contained in current law.
   As I will explain, reimportation was not a good idea then, and it is 
an absolutely terrible idea today, especially after 9/11.
  The high cost of pharmaceuticals is indeed one of the most difficult 
matters facing our society today. We face a harsh reality: At a time 
when scientists are able to offer an unbelievable new array of 
medication, diagnostics, and vaccines, many Americans are encountering 
difficulties in affording these state-of-the-art and often costly 
therapeutics.
  We have all heard stories of Americans going across the borders to 
Mexico and Canada to purchase cheaper drugs. This type of activity is 
also increasing over the Internet.
  It may appear that the solution is simply to allow the importation of 
prescription drugs into our country. While I do not question the good 
intentions of those who believe this is the correct solution, we all 
must be aware of the disturbing, lasting, unintended and negative 
consequences this proposal would have.
  It was not possible to assure safety of reimported pharmaceuticals 2 
years ago. Sadly, it is even more difficult to do so today.
  We are facing an unprecedented time in history. I need not point out 
to my colleagues the challenges this country is already facing in our 
war on terrorism. Allowing drug reimportation is only going to further 
threaten our safety and inundate our law enforcement and regulatory 
agencies.
  As always, there are many issues at play in this debate. But, the 
number one fundamental issue at stake here is the safety of the 
American people.

[[Page 13211]]

  Assuring the American public that these imported drugs are safe and 
effective and unadulterated is next to impossible, especially now, in 
the midst of a war on terror. I worry that a day will come when either 
an under-potent or over-potent or adulterated, either intentionally or 
unintentionally, batch of imported drugs will cause injury and even 
death.
  Yes, we can have certifications and regulations and foreign 
inspections and every other policing mechanism you can think of, but 
the fact remains we cannot police everyone around the world.
  With this bill, we are opening a door that Congress prudently closed 
in 1988 when it enacted the Prescription Drug Marketing Act.
  Let me give you a little background regarding the history of drug 
importation law.
  During the 1980s, the House Energy and Commerce Committee conducted a 
lengthy investigation into the foreign drug market that ultimately led 
to enactment of the Prescription Drug Marketing Act legislation--PDMA.
  This bill was enacted after our nation experienced a series of 
serious adverse events due to improperly stored, handled, and 
transported imported drugs. There were serious threats to public health 
and safety. That investigation discovered, among other things, that 
permitting reimportation of American drugs ``prevents effective control 
or even routine knowledge of the true sources of merchandise in a 
significant number of cases.'' As a result, the House Committee found 
that ``pharmaceuticals whic have been mislabeled, misbranded, 
improperly stored or shipped, have exceeded their expiration dates, or 
are bald counterfeits, are injected into the national distribution 
system for ultimate sale to consumers''. It was determined that we 
could not prevent the introduction of substandard, ineffective, or even 
counterfeit pharmaceuticals.
  The PDMA was necessary to eliminate health and safety problems before 
serious injury to consumers could occur. the Committee report was clear 
on why the PDMA was needed:
  ``[R]eimported pharmaceuticals threaten the public health in two 
ways. First, foreign counterfeits, falsely described as reimported U.S. 
produced drugs, have entered the distribution system. Second, proper 
storage and handling of legitimate pharmaceuticals cannot be guaranteed 
by U.S. law once the drugs have left the boundaries of the United 
States.''
  Now we place a high premium on our citizens receiving safe and 
effective products, free from adulteration and misbranding. The Dorgan 
bill, could unravel the protection that the PDMA provides us.
  Dating from the 1906 Pure Food and Drugs Act, through the 1938 
Federal Food, Drug and Cosmetic Act, the 1962 efficacy amendments 
written by the Senate Judiciary Committee, and the 1988 Prescription 
Drug Marketing Act, our Nation has devised a regulatory system that 
painstakingly ensures drug products will be carefully controlled and 
monitored all the way from the manufacturer to the patient's bedside.
  Under the current Federal Food, Drug, and Cosmetic Act, FDCA, it is 
unlawful for anyone to introduce into interstate commerce a new drug 
that is not covered by an approved New Drug Application, NDA, or 
Abbreviated New Drug Application, ANDA. When a product is introduced 
into interstate commerce that does not comply with an approved 
application, it is considered an unapproved new drug in violation of 
section 505 of the FDCA. It is also misbranded under section 502. These 
basic rules cover importations, since importing is a form of 
introducing a drug into interstate commerce. Under FDCA, a drug that is 
manufactured in the US pursuant to an approved NDA and shipped to 
another country may not be reimported into the US by anyone other than 
the original manufacturer.
  The provision restricting the right to reimport US drugs to the 
original manufacturer was designed to ensure that only the party that 
can truly vouch for the purity of the drug is allowed to bring that 
medicine back into the country. The prohibition on reimportation of 
products previously manufactured in the US and exported abroad was 
added to the law in 1988 to guard against the entry of counterfeit and 
adulterated products into this country.
  On the issue of importing drugs for personal use, FDA has had a 
``personal importation'' policy since the mid 1980s, which permits the 
importation of an unapproved new drug for personal use, meaning the 
individual may import no more than a 90-day supply, in certain 
situations.
  It was intended solely to allow unapproved medications into the US 
for compassionate use. But over the years, there has been a tremendous 
increase in volume and FDA has recently taken the position that the 
personal importation policy has outgrown its usefulness and now 
presents a threat to public health.
  In a letter to Congress, FDA reported that the personal importation 
policy ``is difficult to implement . . . due in part to the enormous 
volume of drugs being imported for personal use and the difficulty 
faced by FDA inspectors, or even health practitioners, in identifying a 
medicine by its appearance''. FDA lacks the ability to adequately 
monitor the enormous volume of mail-order pharmaceuticals.
  The FDA has therefore proposed to the Department of Health and Human 
Services that it eliminate its personal use policy for mail imports. 
The Dorgan bill proposes to expand personal importation at a time when 
the FDA is telling us that it can't handle this and wants us to stop 
this policy.
  In 2002, the Medicine Equity and Drug Safety Act--MEDSA--included a 
provision that allowed an importer or wholesaler--in addition to the 
original manufacturer--to reimport US-manufactured drugs into the 
United States. But this provision would become effective only if the 
Secretary of HHS demonstrated to Congress that its implementation would 
impose no additional risk to the public's health and safety and that it 
would result in a significant reduction to the cost of covered products 
to the American consumer.
  In December 2000, HHS Secretary Donna Shalala said she could not make 
this determination, citing flaws in the legislation that could 
``undermine the potential for cost savings associated with'' 
prescription drug reimportation and that prescription drug 
reimportation ``could pose unnecessary public health risks''.
  In July 2001, HHS Secretary Tommy Thompson also declined to make this 
determination on the premise that the safety of prescription drugs 
could not be adequately guaranteed if reimportation were permitted 
under its provisions.
  So we have certifications by the top health officials of both the 
Clinton and Bush administrations that reimportation is inherently 
unsafe. Are we willing to say, that it is safer today to import drugs 
by mail and other avenues and that we can do a better job ensuring the 
safety of these imported drugs? Especially after the tragic events we 
have been through?
  The Dorgan bill, S. 2244, is a modified version of MEDSA. A review of 
S. 2244 will show that the new language is not significantly different 
from the MEDSA provisions that Secretary Shalala and Secretary Thompson 
rejected. Senator Dorgan, the sponsor of the bill, has stated that it 
is very similar to MEDSA.
  Although the modifications in S. 2244 are intended to address 
original concerns inherent in MEDSA, they fall short of providing these 
safeguards--safeguards which are nearly impossible to implement. The 
new bill suffers from the same flaws as did MEDSA.
  For example, S. 2244 is limited ostensibly to drugs imported from 
Canada. In fact, however, a drug could be imported from anywhere in the 
world under this bill, as long as it entered the U.S. through Canada.
  There is no effective way under this bill to prevent the 
transshipment of drugs--legitimate or not--from other countries into 
Canada and then into the U.S. This would permit the entry of drugs that 
have been manufactured, stored, shipped, and handled anywhere in the 
world--in unsanitary conditions, unregulated conditions--and drugs that

[[Page 13212]]

have become adulterated and even toxic.
  At a September 2001 hearing before the Senate Consumer Affairs, 
Foreign Commerce, and Tourism Subcommittee, FDA's Senior Associate 
Commissioner for Policy, Planning, and Legislation, Bill Hubbard, 
warned of this very risk. Mr. Hubbard stated, ``Even if the Canadian 
system is every bit as good as ours, and I don't know whether it is or 
not . . . the Canadian system is open to vulnerabilities by people who 
will try to enter the U.S. market again because that's where the money 
is.''
  To give another example, S. 2244 differs from MEDSA insofar as it 
would require manufacturers to allow importers to use their FDA-
approved U.S. labeling free of charge. This could lead to an influx of 
misbranded products into the U.S., as importers paste FDA-approved 
labeling onto products from other parts of the world.
  These drugs would be seen as an FDA-approved product manufactured and 
sold by a U.S. manufacturer--but could easily be a different product--a 
drug that could have deteriorated, or been contaminated, subpotent, or 
toxic. The products would be indistinguishable to a consumer in a local 
pharmacy, to a health professional, and even to the FDA. Consumers 
would be deceived by this practice, thinking the U.S. manufacturer had 
vouched for the purity, safety, and effectiveness of the product when 
in fact the manufacturer could not and had not.
  Our top health care financing official has concerns as well. In March 
2002, the Administrator of the Centers for Medicare and Medicaid 
Services--CMS--told the Senate Finance Committee that CMS opposes the 
reimportation of prescription drugs into the U.S. ``We have opposed 
it,'' he stated. ``There is no way for FDA to monitor and regulate 
drugs coming in from Canada, Mexico, or other countries.''
  The Dorgan bill also permits a significantly lower standard for 
personally imported drugs than applies to domestic drugs. The Dorgan 
bill could also open up a loophole in the FDCA for unscrupulous 
commercial importers. It permits FDA to issue regulations permitting 
individuals to reimport prescriptions not only in their personal 
luggage but also through the mail or other delivery services.
  We all know there is no way for FDA to limit mail order shipments to 
personal use. A commercial importer could simply divide its shipments 
into 90-day quantities and mail them separately, taking advantage of 
the personal use policy to introduce counterfeit products into the 
stream of U.S. commerce. This would overwhelm the ability of FDA and 
Customs to process the millions of incoming packages. Many of the 
criticisms of MEDSA--voiced by FDA, DEA, and others--apply equally to 
the new Dorgan bill.
  Many senior officials in various agencies, including FDA, U.S. 
Customs Service, the DEA, the Secretary of HHS warned of the difficulty 
in ensuring the purity and safety of reimported drugs.
  Let's hear again what the experts have to say about reimportation.
  William Hubbard, FDA Senior Associate Commissioner for Policy, 
Planning and Legislation, June 7, 2001:

       We are very concerned that a system, if designed to be a 
     different system than the current system, poses risks and we 
     cannot be assured that we could successfully implement such a 
     system and bring in safe drugs because we do not have the 
     same level of confidence about where it was manufactured, and 
     how it was manufactured, and by whom it was manufactured, 
     that we have under the current system.

  Elizabeth Durant, Executive Director, Trade Programs, U.S. Customs 
Service, June 7, 2001:

       You can see the kinds of drugs that come through the mail. 
     They are not even in bottles many times, just loose in paper. 
     We have counterfeit drugs. We have gray-market drugs. We have 
     prohibited drugs and we have unapproved drugs. And this is a 
     situation that is pretty much replicated around the country.

  We live in a very different world now after 9/11--a more dangerous, 
less certain world. We must question the safety of reimportation of 
prescription drugs even more than ever.
  As Secretary Thompson cautioned on June 9, 2002:

       Opening our borders to reimported drugs potentially could 
     increase the flow of counterfeit drugs, cheap foreign copies 
     of FDA-approved drugs, expired and contaminated drugs, and 
     drugs stored under inappropriate and unsafe conditions. In 
     light of the anthrax attacks of last fall, that's a risk we 
     simply cannot take.

  That's the Secretary of Health and Human Services warning us.
  Here's another quote from William Hubbard, FDA Senior Associate 
Commissioner for Policy, Planning and Legislation, July 9, 2002:

       The cheaper drugs are there. We just have no way to say to 
     a given consumer, ``You have gotten a product that will 
     help--will save your life,'' and we fear that many people 
     will get a bad product that will hurt them.

  We invest lots of money and resources in the United States to ensure 
that medications and other therapeutics are made and distributed at the 
highest quality and standards. Our agencies, while not perfect, have a 
remarkable record of protecting the public from contaminated, 
ineffective, and unsafe drugs.
  We cannot guarantee an acceptable level of quality and safety with 
re-imported drugs. We can't sacrifice quality and safety in the hopes 
of getting cheaper medications. What's the use of cheap drugs if they 
can potentially do a great deal of harm and threaten the public's 
safety?
  Reestablishing a system where wholesalers and pharmacists may import 
prescription pharmaceuticals through Canada to the U.S. would recreate 
the public health risk of counterfeit, unsafe, and adulterated drugs 
that Congress sought to eliminate in the late 1980s with the 
Prescription Drug Marketing Act.
  Even if we put aside these very real safety concerns, the idea that 
the Dorgan bill can achieve the goal of bringing cheaper drug products 
to US consumers is unlikely.
  This bill requires drug manufacturers to disseminate their drug 
formulations to potentially thousands of pharmacies and wholesalers. 
This information, currently protected under patent laws, could be worth 
millions of dollars per drug, on the black market. Unscrupulous 
individuals could obtain drug formulations and learn how to make their 
fake drugs look real and survive chemical analysis.
  Allowing individuals to pirate the hard work and innovation of 
American drug companies to produce so called ``gray market'' products, 
counterfeit products, is no way to ensure that Americans have access to 
the latest pharmaceuticals in the long-run because they simply will not 
exist if we do not protect the work of our private sector companies.
  While there is a clear and obvious health danger in a contaminated, 
pirated product, there is also great detriment to the American public 
if the unscrupulous are allowed to reimport America's inventions back 
into America without compensating the inventor. Few will be willing to 
invest the upfront capital--hundreds of millions of dollars--to develop 
a drug if another party can make and sell the drug while it is under 
patent protection.
  It takes an average of 15 years and a half a billion dollars to 
create one of the blockbuster drugs. So we have to be careful. We must 
be able to continue to attract the private sector investment into 
committing to the research and development that has made the American 
drug development pipeline so successful. We jeopardize this with 
reimportation of drugs.
  We can't just do what appears on the surface to be good but, in 
essence, could kill people and undermine our fundamental system of 
encouraging innovation and rewarding hard work.
  How successful is pharmaceutical innovation in Canada? They have 
price controls, and nobody is going to invest the money into developing 
these lifesaving and cost-saving drugs over the long run in those 
countries with price controls.
  This is another step toward price controls that will weaken one of 
the most important industries in America at a time when we just mapped 
the human genome, and we are at the point where we can actually create 
more lifesaving medicines.

[[Page 13213]]

  When the value of American inventions is stolen, it is American 
inventors and American consumers who suffer. The United States cannot 
and should not allow free riders around the world essentially to force 
the American public to underwrite a disproportionate amount of the 
research and development that results in the next breakthrough product. 
On the surface it seems there's no harm if drugs obtained from outside 
the United States at prices lower than U.S. prices can be resold in the 
U.S.; presumably this could lower prevailing U.S. prices. But great 
harm can come from this. I can say that where nations impose price 
controls, the research and development we count on to bring us miracle 
cures is jeopardized.
  How can we guarantee that foreign government price controllers will 
not set an artificially low price on some new badly-needed Alzheimer's 
or Parkinson's or Lupus drug? We can be sure that this will have the 
unintended, but real, effect of convincing company officials to forgo 
research on this new class of drugs for fear that, in conjunction with 
the new liberal re-import policy, they will not be able to recoup their 
investment?
  Let's stop the free riders and cheap riders overseas while American 
citizens are paying the full freight of R&D. Look, I understand the 
appeal of bringing goods sold cheaper abroad back to the United States 
at presumable savings to U.S. citizens. Yet, the amendment provides no 
guarantee that those wholesalers and pharmacists importing the products 
would pass their savings on to the consumer. And so, at best, with this 
bill we could be trading public safety for middleman profits.
  We would also incur far more costs policing this endeavor. The cost 
of implementing the Dorgan bill would require very substantial 
resources at a time when we are stretching our funding to HHS and other 
federal departments to prevent future terrorist incidents.
  We have to find a way around this drug access problem in this country 
without creating a public health hazard and ``gray market''.
  We will be importing not just drugs but some other government's 
questionable safety standards and price controls into U.S. market 
dynamics.
  In our valid and justified quest to help make drugs more affordable 
to the American public, we would be mindful not to unwittingly impede 
innovation.
  Even the Dean of the House, Representative John Dingell of Michigan 
did not support similar legislation in the past when the House Energy 
and Commerce Committee issued a report that concluded that ``the very 
existence of a market for reimported goods provides the perfect cover 
for foreign counterfeits.''
  The concerns are relevant to the Dorgan bill that we are considering 
today.
  In our haste to bring cheaper drugs to seniors and other needy 
Americans--an important and laudable goal--we risk making changes to 
key health and safety laws and changes in our innovative pharmaceutical 
industry that no one can afford. We must bring safe, effective drugs to 
Americans, and particularly seniors, through avenues such as the 
Tripartisan Medicare Bill.
  We need to focus our efforts on passing a Medicare prescription drug 
benefit bill. We should not pass another feel-good drug reimportation 
bill before the election that we already know today will not and cannot 
be implemented after the election.

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