[Congressional Record (Bound Edition), Volume 149 (2003), Part 10]
[House]
[Pages 13352-13358]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    EXORBITANT PHARMACEUTICAL PRICES

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Indiana (Mr. Burton) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. BURTON of Indiana. Mr. Speaker, the gentleman from Minnesota (Mr. 
Gutknecht), the gentleman from Maine (Mr. Allen), the gentleman from 
Vermont (Mr. Sanders), and the gentlewoman from California (Ms. Watson) 
and myself are going to be talking this hour about the problems that we 
have in this country with exorbitant pharmaceutical prices.
  We all believe in the free enterprise system, and we believe that 
private industry ought to make a profit, but we also believe the 
American people ought to get the best bang for their buck. 
Unfortunately, the pharmaceutical industry has been taking advantage of 
Americans for a long, long time, and it is just now becoming evident.
  The gentleman from Minnesota (Mr. Gutknecht) made this chart up 
originally, and this chart, I know it is difficult for my colleagues to 
see, but it shows the disparity between pharmaceutical products 
purchased in the United States and those purchased in Canada. In some 
cases, products, pharmaceutical products manufactured here in the 
United States that are sold in other parts of the world, sell for one-
tenth the price that they sell for here in the United States; and yet 
the American people, when they try to buy those products abroad through 
the Internet, are being criticized for that, and the Food and Drug 
Administration, hiding behind the veil of protecting the public from 
products that might harm them, are saying that they are not going to 
allow these Internet sites to sell these products. The very same 
products sold here in the United States, they are not allowing them to 
be purchased from Canada or other countries so the American consumer 
can save as much as 50 percent of their pharmaceutical costs.
  I have a constituent who was paying $1,300 a month or $1,200 a month 
for pharmaceutical products, and he bought the very same products on 
the Internet from Canada for less than half that amount, so he was 
saving $7,000 a year by purchasing them from Canada. And now the FDA, 
along with the pharmaceutical companies, are trying to stop him from 
doing that.
  We have over a million people in this country, probably closer to 2 
million, who are buying their pharmaceutical products from Canada over 
the Internet. But the pharmaceutical companies and the FDA are trying 
to stop the American people from saving money and getting the products 
at a fair market price.
  Today, in the New York Times there is an article, and I do not quote 
from the New York Times very often, but there is an article talking 
about the exorbitant amount of money that the pharmaceutical industry 
is going to be spending over the next year to influence Congress, State 
legislators, government agencies and so forth to keep the prices of 
pharmaceutical products very high in the United States and prohibit the 
importation or reimportation of their products from other countries 
where they are selling them much cheaper.
  In 1990, PhRMA spent $2.3 million in that cycle here in Washington 
and around the country. In 1992, it more than doubled to $4.9 million. 
In 1994, it went to $5.2 million; and in 1996 it went to $9.2 million. 
In the year 2000, it jumped up to almost $20 million, and it was over 
$20 million in the year 2002.
  Let me read what was in the New York Times today. ``Lobbyists for the 
drug industry are stepping up spending to influence Congress, the 
States and even foreign governments as the debate intensifies over how 
to provide prescription drugs benefits to the elderly, industry 
executives say.''
  The article goes on to say, ``The documents show that the trade 
association, the Pharmaceutical Research and Manufacturers of America, 
known as PhRMA, will spend at least $150 million this year. That 
represents an increase of their total budget of 23 percent over last 
year which was $121.7 million. Directors of the trade association 
approved the new budget, together with an increase in membership dues, 
to pay for an expanded lobbying campaign at a meeting last week. They 
have over 600 lobbyists in Washington, D.C.''
  Here is what they say: ``Unless we achieve enactment this year of 
market-based Medicare drug coverage for seniors, the industry's 
vulnerability will increase in the remainder of 2003 and in the 2004 
election year,'' and it will demonize the industry if they do not get 
this done.
  Now, we are for market-based pricing. The gentleman from Minnesota 
(Mr. Gutknecht) has said that many, many times. But that should be 
across the spectrum, not just here in the United States of America. I 
mean, in Canada if you can buy a product for $70, why should it cost 
$122 here in the United States right across the border, just a mile 
apart? And the reason is they are charging an exorbitant amount of 
money to the Americans, and they are loading the research and 
development and everything else on the back of American consumers 
instead of spreading it across the world.
  If they are talking about market-based drug coverage for seniors, 
then the burden should be spread equally across the spectrum, not just 
here in the United States but across Canada and Europe. If we did that, 
the price for all Americans would go down dramatically.
  The drug trade group plans to spend $1 million for an intellectual 
echo chamber of economists, a standing network of economists and 
thought-leaders, to speak against Federal price control regulations 
through articles and testimony, and to serve as a rapid-response team. 
A rapid-response team, that sounds like a military action. Well, we 
want to make sure that we do not have to have price controls.

                              {time}  2030

  If we had fair pricing across the spectrum, around the world, then I 
think

[[Page 13353]]

the Americans would get a fair price when they buy their products. But 
unfortunately, the products are a lot lower in other countries, in 
Europe, in Germany, in France, in Spain, in Canada, in Mexico; much, 
much less than they are here. Yet they want to keep those prices higher 
here in the United States so they can keep their profits high.
  The trade association and its tactics have become an issue. In debate 
on the floor of the Senate last summer, Senator Durbin, Democrat of 
Illinois, said PhRMA, this lobby has a death grip on Congress. After 
seeing what I have seen over the past month, month and a half, I am not 
so sure he is wrong. The influence that the pharmaceutical industry has 
in the halls of Congress and in the executive branch mystifies me. We 
are supposed to be sent here to represent the people of this country, 
to make sure they get a fair shake across the board. Yet the 
pharmaceutical industry has been loading huge, huge profits on the 
backs of the American people while making much smaller profits right 
across the border in Canada by selling their products at a more 
competitive rate.
  If Americans try to buy them up there now, now they are trying to 
stop them. The day after the pharmaceutical giant GlaxoSmithKline said 
they were going to pull out of Canadian pharmacies that were selling 
across the border through the Internet, the FDA I think the next day or 
the day after said there may be a concern about the safety of these 
pharmaceutical products. And so they were marching in lockstep with the 
pharmaceutical industry to stop Americans from getting these lower-
priced pharmaceutical products, the same products they can get here, 
from Canada.
  Dues from the pharmaceutical industry will go to $144 million, an 
increase of 24 percent or $28.3 million over this year's dues. In its 
budget for the fiscal year that begins July 1, the pharmaceutical lobby 
earmarks $72.7 million for advocacy at the Federal level directed 
mainly at, you guessed it, the Congress of the United States. $72.7 
million to lobby us; $4.9 million to lobby the Food and Drug 
Administration. I do not know if they have to spend that much because I 
think the FDA is pretty much in their pocket already. And $48.7 million 
for advocacy at the State level. In addition, the budget sets aside 
$17.5 million to fight price controls and protect patent rights in 
foreign countries and in trade negotiations. The PhRMA budget allocates 
$1 million to change the Canadian health care system and $450,000 to 
stem the flow of low-priced prescription drugs from online pharmacies 
in Canada to customers through the Internet here in the United States. 
I think it is kind of funny. They are going to spend $73 million to 
lobby Congress and only a million to do it in Canada. I think that is 
because they feel like it is a lost cause up there.
  In a memorandum for the PhRMA board, it says the industry is on the 
defensive, facing a perfect storm whipped up by several factors, 
expanding government price controls abroad, resulting in politically 
unstable crossborder pricing differences; increasing availability of 
medicines from abroad via Internet sales; State ballot initiatives to 
make drugs more affordable in the United States; increasing State 
demands for drug discounts in the Medicaid program; and false 
perceptions that drug prices are increasing by 20 percent a year. I do 
not know whether they are going up 20 percent a year, but they are a 
heck of a lot more here than they are in Mexico, in Canada, in Spain, 
in Germany, in France and elsewhere.
  Let me go into this breakdown a little bit further, and then I will 
yield to my colleagues. At least $2 million, and perhaps $2.5 million, 
in payments to research and policy organizations to build intellectual 
capital and generate a higher volume of messages from credible sources 
sympathetic to the industry. They are going to hire a bunch of people 
to be their mouthpieces that are supposedly credible to convince us 
that we ought to let the American people be saddled with these huge 
prices while these same products can be sold elsewhere for a lot less.
  $9.4 million for public relations, including $1 million for inside-
the-Beltway advertising. $555,000 for placement of op-eds. They are 
going to buy the op-ed pieces in the newspapers? $555,000 for placement 
of op-eds and articles by third parties. They are going to hire people 
to put these articles in and pay them $555,000. I suppose if I wanted 
to, I could write an op-ed on behalf of the pharmaceutical industry, 
and they would pay me to do it.
  $600,000 for polling; $1.3 million for local publicity in 15 States. 
I suppose that is congressional districts. For instance, in my district 
this last week, PhRMA went into Kokomo, Indiana, and talked to one of 
the writers; and they went to the Louisville Courier Journal, on both 
ends of my congressional district, to try to make the case that I did 
not know what I was talking about and that I was hurting the people of 
this country by trying to make sure they get a fair shake on these 
pharmaceutical prices, and they did that to try to discredit me and 
hurt me in my congressional district. I have to tell you something, 
PhRMA PR people, you are making a big mistake. A big mistake.
  The Federal affairs staff at PhRMA has quadrupled since 1999. The 
organization plans to spend $5 million for outside lobbyists at the 
Federal level. In their campaign contributions, drug companies have 
favored Republican candidates, but PhRMA has retained a diverse group 
of lobbyists to ensure access to Democrats as well. I am sure of that. 
I will not go into who some of their lobbyists are, but my colleagues 
in the House know that we have a lot of our former colleagues out there 
that are on the payroll of the pharmaceutical companies. Big, big 
bucks.
  The State government affairs division of PhRMA will spend $3.1 
million to retain more than 60 lobbyists in 50 States. The number of 
State legislative proposals dealing with prescription drugs has doubled 
since 1999. The drug industry says many of these bills are seriously 
negative, have a high probability of enactment, and require major 
attention on our part. They want to get it stopped.
  They hire 600 lobbyists here in Washington, D.C. That is more 
lobbyists than we have in Members of the House and the Senate. That is 
overkill. They only need one for each one of us. What are they going to 
do with the other 65? I guess they will all go to lunch, have a triple 
martini lunch. I hope PhRMA is watching this. I really do.
  PhRMA said it would spend $12.3 million to develop coalitions and 
strategic alliances with doctors, patients, universities, and 
influential members of minority groups. The organization has earmarked 
several million dollars to foster ties with groups like the National 
Black Caucus of State Legislators; the National Hispanic Caucus of 
State Legislators; and the National Medical Association, which 
represents the interests of African American doctors. The budget 
includes $500,000 for efforts to educate and activate Hispanic-Latino 
organizations at a State and Federal level.
  In other words, my colleagues, and I think my colleagues who are here 
on the floor tonight already know this, they are pulling out all the 
stops to keep their profits very high here in the United States, to 
saddle the American people with huge prices while they are selling 
these pharmaceutical products for a lot lower elsewhere, and they are 
going to lobby us to death to try to make sure those profits remain 
high.
  I am a free enterprise advocate. I believe in keeping our nose out of 
the private sector as much as possible; but when an industry starts 
beating American taxpayers to death and American consumers to death 
with exorbitantly high prices while at the same time they are selling 
these same products around the world for less and still making a profit 
and then they say, we cannot buy them abroad and they threaten the 
people who sell them to us from abroad with closing them down, then 
that is wrong. That is bullyism and that is something that cannot be 
tolerated.
  The free enterprise system, God bless it, should not tolerate that 
kind of activity from any industry. I will say to

[[Page 13354]]

the pharmaceutical industry right now and I believe the pharmaceutical 
products have given us the highest quality of health care in the 
history of mankind, and God bless you for that; but you have gone too 
far when you start raping the American people; and that is what is 
going on with these prices right now and it ain't going to work.
  The Internet is here to stay. If you push in on one side of the 
balloon, it is going to pop out someplace else and you better get with 
the program. Make a profit, but make sure it is fair for everybody. 
Make sure it is fair for everybody. If you do that, I will be one of 
your biggest supporters as I have been in the past, and I am sure my 
colleagues will as well.
  We have the gentleman from Maine (Mr. Allen) here, the gentleman from 
Vermont (Mr. Sanders), the gentleman from Minnesota (Mr. Gutknecht), 
and the gentlewoman from California (Ms. Watson). Let me get this 
straight here. I want to make sure that everybody that is paying 
attention in their office understands this. Congressman Allen is a 
Democrat. I am a Republican. Congressman Sanders is an Independent. I 
am a Republican. Congressman Gutknecht, God bless him, is a Republican. 
I am a Republican. I like you a lot. And Congresswoman Watson is a 
Democrat from California. But we all see eye to eye on this. This is 
not a partisan issue. That is why I think the pharmaceutical industry 
spending hundreds of millions of dollars ain't going to win this battle 
because they cannot beat us when we are united.
  With that, let me yield to my colleague, the gentleman from Maine 
(Mr. Allen).
  Mr. ALLEN. I thank the gentleman for yielding, and I thank him for 
his enormous courage and directness and integrity in bringing this 
issue forward. This is an unusual event tonight, to have Democrats, 
Republicans, and our Independent from Vermont all on the floor during a 
Special Order talking about the same subject and agreeing with each 
other. I had the pleasure to serve with the gentleman from Indiana (Mr. 
Burton) for the last 6 years on the Committee on Government Reform of 
which he was chairman. I am very pleased to be here tonight.
  Over the last week, I rode part of the way on a bus trip, on a bus in 
Maine chartered by Maine seniors to go up to Canada, we are close as 
you know, to go up to Canada to buy their prescription drugs. They go 
to Calais in Maine and get a prescription and then go over the border 
and find enormous savings. The 18 or 20 people on that bus must have 
saved thousands of dollars as others have before. People in Maine 
generally now, many of them, are ordering prescription drugs over the 
Internet from Canada because that is the only way they can both eat and 
have their prescription medications. It is a scandal what is happening 
in this country right now. The richest, most powerful country in the 
world finds that those people who do not have prescription drug 
coverage in this country are paying the highest prices in the world.
  Several years ago we started a series of studies to find out just how 
great the difference is. Those studies showed basically that for drugs 
that on average cost, let us say $100 a month here in the United 
States, the cost in other industrialized countries is around $61 or 
$62. In other words, there is about a 40 percent difference on average 
for the drugs that are taken most frequently by people on Medicare, our 
seniors and the disabled.
  That is why I introduced a bill that basically would cap the price 
that the industry could charge in this country to what we call the 
average foreign price, that is, the average price at which the same 
drug is sold in Canada, in Japan, Britain, France, Germany and Italy, 
the other countries of the G-7.
  But however we go at this issue, and Mr. Gutknecht, of course, from 
Minnesota has been one of the leads with the gentleman from Vermont 
(Mr. Sanders) on the whole issue of reimportation, however we go at 
this issue, we have to recognize that the people without insurance and 
the people on Medicare pay the highest prices in the world. I happen to 
have a health insurance plan for Federal employees in the State of 
Maine through Anthem Blue Cross. I know that the premium that I pay is 
lower than it would otherwise be because Anthem Blue Cross negotiates 
with the pharmaceutical industry to reduce the price of the drugs that 
are purchased for beneficiaries. But if you are on Medicare in this 
country, if you are on the biggest health care plan in the entire 
country, you cannot get any discount like that.
  In Maine, we took steps to try to rectify that problem. We passed a 
program in the year 2000 called Maine Rx. Just a few days ago, on May 
19, the U.S. Supreme Court ruled against PhRMA. The Supreme Court ruled 
that you could not stop the Maine Rx program before it was even 
implemented. What it did was essentially to say that the State of Maine 
will enter into negotiations with the pharmaceutical industry to reduce 
prices on their drugs sold to anyone who does not have prescription 
drug insurance in Maine. That is certainly all those on Medicare who do 
not have prescription drug insurance and all of the uninsured who 
obviously do not have prescription drug insurance because they do not 
have health insurance; and the industry would have to reduce their 
prices to that group, or the State would eventually set up a commission 
and deal with it directly. But in doing that, the State of Maine is 
really not doing anything different than we do through the Federal 
Government for Medicaid, certainly not different than what we do for 
our veterans, not different than what Kaiser Permanente or Aetna or 
Cigna or United do for their beneficiaries, negotiate lower prices so 
their beneficiaries are not paying the highest prices in the world. 
That is really the scandal.
  The gentleman from Indiana mentioned the article in The New York 
Times the other day. It is an amazing article because the author, 
Robert Pear, had access to confidential budget documents from PhRMA. I 
will not go back to everything that the gentleman from Indiana 
mentioned, but I loved this entry. Here it is, the Canadian health care 
system where they have lower prices, and just to give you one example, 
Tamoxifen, a drug to deal with breast cancer, is one-tenth the cost in 
Canada as it is in the United States.

                              {time}  2045

  Here is what PhRMA is planning to do. They have allocated $1 million, 
according to their documents, to ``change the Canadian health care 
system.'' Can you believe that? They would like the Canadian system to 
be like ours, where they can charge whatever they want to the Canadian 
public and where they wind up spending $150 million a year to lobby 
Canadian legislators. And they think that is what the American people 
want as well. It just takes your breath away.
  With that, Mr. Chairman, I yield back and thank you for including me 
in this special order tonight, and I thank you for your courage in 
standing up for your constituents.
  Mr. BURTON of Indiana. Before the gentleman departs, let me just say 
there are five of us here tonight, and I hope that we will all use our 
influence to educate the rest of our colleagues who are not as 
conversant with this problem as we might be. You, being one of the 
leaders on the Democrat side, I hope you will talk to your colleagues, 
along with the gentleman from Vermont (Mr. Sanders) and the gentlewoman 
from California (Ms. Watson.)
  I yield to the gentleman from Minnesota (Mr. Gutknecht).
  Mr. GUTKNECHT. Mr. Speaker, I want to thank the chairman for putting 
this special order together tonight, and I want to thank my colleagues 
on both sides of the aisle for joining us.
  As has been mentioned, this is not a matter of right versus left, 
this is right versus wrong, and it is wrong to force Americans to pay 
the highest prices in the world.
  The gentleman from Maine was talking about Tamoxifen. I am also now 
the chairman of the Congressional Study Group on Germany, so I was in 
Germany about a month ago. While we were there, we went to the pharmacy 
at the Munich Airport and we bought

[[Page 13355]]

some of the most commonly prescribed drugs. Now, most people know that 
if you want to get a bargain, you probably do not go to the airport to 
buy it, so this is probably not the cheapest place in Germany to buy 
drugs.
  Incidentally, compared to what you hear all the time, Germany really 
does not have price controls in the sense of setting the prices that 
the pharmacist in Germany can sell the drugs for. What they do allow is 
for German pharmacists to shop to get the best price. If they can buy 
their Tamoxifen cheaper in Sweden, they buy it in Sweden. If they can 
buy it cheaper in Spain, they buy it in Spain. They use market forces 
to help keep prices down in Germany.
  We bought this Tamoxifen. It is 100 tabs of 20 milligrams. I am going 
to tell the whole story about Tamoxifen. We bought it at the Munich 
Airport pharmacy for $59.05 American. This same box of drugs here in 
the United States sells for $360; $60 in Germany, $360 here.
  What makes the story even worse about this particular drug is, this 
was developed with taxpayers' dollars. This was developed essentially 
by the National Institutes of Health. Almost all of the research and 
development costs were paid for by the taxpayers.
  As the vice chairman of the Committee on Science, here is something 
we should all be proud of. We in the United States represent less than 
6 percent of the world's population, but we represent over 50 percent 
of the basic research done in the world. This year, this Congress will 
authorize and spend $29 billion taxpayer dollars on basic research.
  In fact, there was a study done, and I want to recommend a book, if 
you have not seen this book, I hope every one of my colleagues will 
pick up a copy of this book. The title is ``The Big Fix.'' The subtitle 
is ``How the Pharmaceutical Industry Rips Off American Consumers.'' It 
is written by Katharine Greider. What is in this book is compelling, 
and every American ought to read some of the things that are in here.
  You talk about the research. A study was done by the Boston Globe 
just a few years ago, and they found that of the 35 largest selling 
drugs in the United States, 33 of them had most of their research and 
development costs paid for by the taxpayers.
  Now, it is one thing to say we have all these research costs, and 
therefore American consumers have to pay all the freight. But the 
bottom line is, we subsidize the pharmaceutical industry in three 
separate ways.
  First of all, in that $29 billion we will spend this year in basic 
research through the NIH, the National Science Foundation and even DOD; 
we do an awful lot of basic research in the DOD that ultimately 
benefits the pharmaceutical industry. We do all of that on that side.
  Secondly, we subsidize them in the Tax Code. They get very generous 
write-offs for the amount of research and the other expenses that they 
have.
  Finally, we subsidize them in the prices we pay.
  Let me share with you some of the other prices that we got at the 
pharmacy at the Munich Airport in Munich, Germany.
  Glucophage, a miracle drug. I want to pay homage to the people who 
helped develop it. Millions and millions of Americans and people around 
the world are living better quality lives because of Glucophage. So I 
am not here to beat up on the pharmaceutical industry. They have done a 
lot of wonderful things.
  But how do you justify this difference? This package of Glucophage 
here in the United States, we checked the price, is $29.95. We bought 
this one month ago in Munich, Germany, for $5 American.
  Let us look at Cipro. We all know a little more about Cipro in the 
last couple of years because of what happened with the anthrax scare. 
We bought Cipro in Germany. This is actually made by a German company 
called Bayer. They also make aspirin. But Bayer makes this drug. We 
bought Cipro in Germany for $35.12. Here in the United States this same 
package sells for $55. $20 does not seem like much, but it adds up.
  We bought Coumadin. My 86-year-old father takes Coumadin. This 
package of Coumadin we bought in Germany, we paid about $14 for this 
drug. Here in the United States, it is about $64. Those numbers just go 
on and on.
  Zocor, very commonly prescribed, we bought it for $41.20. Here in the 
United States, $89.95.
  As Will Rogers said, all I know is what I read in the newspapers. 
Well, read the newspapers. Read today's Wall Street Journal, the front 
page, about what the drug companies and PhRMA are doing, not only to 
make certain that Americans keep paying the highest prices in the 
world, but they are literally now saying to sub-Saharan Africa, well, 
we will subsidize AIDS drugs for you, but we will not let you have 
access to many other drugs, including insulin.
  Right now, you cannot get insulin in Chad at any price. Read the 
article. In fact, if I have time, I will read one of the paragraphs 
here, just a few sentences.
  They talk about how all of the countries, 148 countries in the world, 
were ready to come up with a trade agreement, some language, to deal 
with some of these problems about drugs going across borders. But last 
December, when all of the other 148 countries in the World Trade 
Organization had lined up behind a new plan on the trade of medicines, 
the United States blocked the proposal. As you read, it gets worse, why 
they blocked it. It was all about the big pharmaceutical companies 
afraid that they might lose some profits.
  This is not a matter of right versus left; this is right versus 
wrong. The time has come for Congress to stand up and say we are not 
going to be played the fool any longer. It is time that Americans have 
access to world-class drugs at world-market prices. That is not too 
much to ask. That is not a Republican idea, that is not a Democrat 
idea; that is an American idea.
  We have what is called NAFTA. Many of us believe in free trade. But, 
it is interesting, we have free trade when it comes to plantains, have 
free trade when it comes to pork bellies, we have free trade with 
things called pears. In fact, we import hundreds of thousands of tons 
of fruits and vegetables every year, hundreds of thousands of tons; and 
that is regulated by a group called the FDA, the Food and Drug 
Administration.
  Do you know how much inspection they do of all of those fruits and 
vegetables crossing our borders every year? Almost none. Do you know 
how many people get sick every year from imported fruits and 
vegetables? Thousands. In fact, one estimate is, thousands die as a 
result of eating contaminated foods that have come from other 
countries, that have food-borne pathogens. The FDA's own study said 
that 2 percent of all fruits and vegetables that come into the United 
States are contaminated with food-borne pathogens, including things 
like salmonella. Salmonella will kill you.
  But we have to stop these prescription drugs because our own research 
says people could get sick and die. Do you know how many people have 
died? The FDA keeps records of all the people who have taken legal FDA-
approved drugs coming in from other countries. It is an easy number to 
remember. It is a nice round number. It is zero. Zero.
  More importantly, we are going to introduce a bill sometime by the 
end of the week that is going to require the FDA to begin to put 
counterfeit-proof blister packs in place, whether they come from the 
United States or wherever they come from.
  Once we begin to require this, this whole safety thing just goes out 
the window, and we begin to realize it is not about safety, it is about 
profits; it is about making American consumers pay the highest prices 
in the world.
  Let me just close with one other thing, because I say, shame on us. I 
do not say, shame on the pharmaceutical industry; shame on us. We let 
this thing happen. But the most shaming thing of all was a study done 
by the Kaiser Foundation a few years ago. What they found out was 29 
percent of seniors say that they have let prescriptions go unfilled 
because they could not afford them.

[[Page 13356]]

  Two weeks ago, I spoke to the Community Pharmacists, and I asked 
them, we had hundreds of pharmacists from around the country here in 
Washington, and I asked them, has this ever happened to you, where a 
little old lady comes up, hands you a prescription, and you tell her 
how much it is going to be, and she drops her head and she says, well, 
maybe I will be back tomorrow, and she never comes back. And every head 
in that place shook like this.
  It has happened. It happens every day. And I do not say, shame on the 
pharmaceutical industry as much as I say, shame on us, because we have 
the power to do something about that.
  Twenty-nine percent of prescriptions go unfilled. That is an outrage, 
and we can do something about it. And the reason is they cannot afford 
it. They can afford $14 for Coumadin; they cannot afford $64.
  Mr. BURTON of Indiana. Mr. Speaker, let me say to my colleague, who 
has been the leader on this issue for a long time, we all appreciate 
your hard work. And I understand your saying, shame on us. But the Food 
and Drug Administration, which we pay for with taxpayers' dollars, 
should not be protecting the pharmaceutical industry and making sure 
that these exorbitant profits are made year in and year out, and then 
coming to the rescue of the pharmaceutical industry when they are 
trying to stop the reimportation of pharmaceutical products from Canada 
by saying that there is a safety issue.
  It is unconscionable what they are doing over there, and we need to 
keep the heat on them. So maybe not, shame on the pharmaceutical 
industry by itself, but shame on them and the FDA and us for not being 
more responsive.
  Mr. GUTKNECHT. If I could have one additional minute, I do want to 
mention to all my colleagues, we have been working for a year trying to 
come up with a bill that would make sense. We think we have it. It is 
called the Pharmaceutical Affordability Act of 2003. Now, some may not 
like the acronym; it works out to PHARMAA. But the bottom line is, we 
think we have come up with language which really deals with the issues 
that people have raised, ultimately safety. I hope that Members will 
join me in cosponsoring that bill. Hopefully, if we put enough pressure 
on all of the people here in this body, we will get a vote on it this 
year. If we do, it will pass.
  Mr. BURTON of Indiana. I think that needs to be dealt with along with 
the prescription drugs benefits we are going to talk about. I do not 
want to pass a prescription drug benefit that is going to guarantee the 
taxpayer paying for these huge profits being realized by the 
pharmaceutical industry.
  Let me go to my colleague, the gentleman from Vermont, Mr. Sanders, 
and then go to the gentlewoman from California (Ms. Watson). The 
gentleman from Vermont (Mr. Sanders) has been working on this for a 
long time as well.
  Mr. SANDERS. Mr. Chairman, I am at a disadvantage. After hearing you 
and the gentleman from Maine (Mr. Allen) and the gentleman from 
Minnesota (Mr. Gutknecht) and I am sure the gentlewoman from California 
(Ms. Watson) soon after, there is not much that I can add to what you 
have said.
  Let me reiterate a point that you made. I hope the viewers appreciate 
this.
  You are a Republican, the gentleman from Maine (Mr. Allen) is a 
Democrat, the gentleman from Minnesota (Mr. Gutknecht) is a Republican, 
I am independent, and the gentlewoman from California (Ms. Watson) is a 
Democrat. Two Democrats, two Republicans and an Independent. And there 
are a lot more of us who are not here tonight.
  What that should tell the American people is that there is widespread 
anger, frustration and disgust with what the pharmaceutical industry is 
doing to the people of this country.
  Three years ago, I became the first Member of Congress to take a 
group of American citizens over the Canadian border in order to buy 
medicine. We went to Montreal. The reason that we did that is, I wanted 
not only to help hard-pressed Vermonters, mostly women, who are having 
a very difficult time paying for their prescription drugs, but I wanted 
to help show the country the absurdity of the situation, where the same 
exact medicine manufactured by the same exact company is sold in Canada 
for a fraction of the price that it is sold in the United States.

                              {time}  2100

  As we have discussed, it is not just Canada. It is Europe; it is 
Mexico. The American people pay, by far, the highest prices in the 
world for prescription drugs. In that trip to Canada, one of the 
moments that I will not forget is that we had women with us who were 
struggling with breast cancer, something I know the gentleman from 
Indiana (Chairman Burton) has a personal interest in. Women fighting 
for their lives were able to pick up Tamoxifen, a widely prescribed 
breast cancer drug, for one-tenth of the price that is being charged in 
the United States of America. Of course, it is not just Tamoxifen; it 
is drug after drug after drug sold for a fraction of the price.
  I think the gentleman said it well, the gentleman from Indiana (Mr. 
Burton), and the gentleman from Minnesota (Mr. Gutknecht) made the 
point, too, and the gentleman from Maine (Mr. Allen), it seems to me we 
are looking at two separate things.
  On the one hand, we are seeing researchers who are making enormous 
breakthroughs; and the result of that is that we are saving lives, we 
are easing pain, we are prolonging life. That is the good news. All of 
us here have a great deal of respect for those researchers in the drug 
companies and in the United States Government, in universities, 
foundations who are doing that work. I thank them so much for what they 
are doing.
  But then there is another side of the pharmaceutical industry. Those 
are the people who sit at the heads of these corporations who are 
concerned about one thing alone, that is, making as much money as they 
possibly can. They do not lose a night's sleep if elderly people die 
because they cannot afford the medicine they need or if their health 
deteriorates.
  Of the many outrages that we have talked about here, the huge amount, 
hundreds of millions of dollars, that floods Washington or State 
capitals in order to maintain high prices, there is another outrage 
that I do not think has been mentioned tonight. While elderly people 
cannot afford the high price of medicine, the CEOs and the top dogs of 
these companies receive huge compensation packages.
  In 2001, C.A. Heimbold, Jr., former chairman and CEO of Bristol-
Meyers-Squibb, ended up his compensation with $74,890,000. Not bad; but 
that is not all. Mr. Heimbold also received stock options that same 
year amounting to over $76 million. One year, one man, $150 million. 
Then they tell us they just cannot lower the cost of medicine so that 
seniors in Vermont or Indiana can ease their pain or protect their 
lives.
  Year after year while we continue to pay the highest prices in the 
world for prescription drugs, year after year the pharmaceutical 
industry is the most profitable industry in the country. More 
profitable than media, more profitable than banks. The pharmaceutical 
industry leads the list.
  The issue here, and the gentleman has touched on this, I say to the 
chairman, the issue really here is will the United States Congress have 
the guts, and it is going to take some guts, to stand up to what I 
believe is the most powerful force in the United States of America.
  I was interested, Mr. Speaker, to hear the gentleman from Indiana 
(Mr. Burton) say they have already gone down to Indiana and tried to 
work against him because of his willingness to stand up on this issue. 
If I am not mistaken, the gentleman from Minnesota (Mr. Gutknecht) told 
the same story, that they had gone to Minnesota, as well.
  The gentleman and I know that when Members of Congress fight hard for 
consumers, lots of money comes into a campaign, mostly against 
Democrats; but I am sure they will go after Republicans, as well.

[[Page 13357]]

  What we have to deal with now is to ask our colleagues in the 
Congress to have the guts to stand up to the campaign contributions, 
the advertising, the visiting of the editorial boards, the TV ads, all 
that we will see, the unlimited sums of money, hundreds of millions of 
dollars. Do we have the courage to say no to those people and protect 
the American consumer?
  I believe that if tonight is an example of the potential of what we 
can do, standing together, regardless of philosophy or party, we can 
protect the American people and take on this industry. I thank the 
gentleman very much for calling this Special Order.
  Mr. BURTON of Indiana. Mr. Speaker, I thank the gentleman from 
Vermont (Mr. Sanders), and I would like to say to my colleagues that 
not this Thursday but next Thursday we are going to have a hearing in 
the Subcommittee on Wellness and Human Rights of the Committee on 
Government Reform.
  I anticipate and hope we will all be there, because we are going to 
have some witnesses come in from the pharmaceutical industry, and more 
witnesses come in from areas that can show that these products will be 
safe coming into the United States. We are going to have people from 
HHS and FDA there. I think it will be a very illuminating meeting; 
plus, we have some surprise information that will be coming out of that 
meeting, as well.
  The gentlewoman from California (Ms. Watson) has been very patient. I 
thank her very much for being with us. She has been a leader in 
California on a number of issues involving health. I am happy to say 
she is my ranking member on our committee, and she does a great job. I 
yield to the gentlewoman from California (Ms. Watson).
  Ms. WATSON. I am very proud of that, Mr. Speaker. I thank the 
chairman, the gentleman from Indiana (Mr. Burton), for his courage.
  I will just restate the problem that we see in the pricing of U.S. 
pharmaceuticals, which has such an enormous consequence to millions of 
Americans who need affordable access to prescription drugs. Americans 
pay substantially more for prescription drugs than purchasers in other 
countries, and it has been demonstrated to us this evening.
  We have failed in Congress to establish a Medicare prescription drug 
benefit, so seniors who do not have private prescription drug coverage 
must pay for prescription drugs out of their pockets. Research by the 
staff of the Committee on Government Reform has shown that seniors in 
congressional districts across the country pay twice as much for 
prescription drugs as their counterparts in other countries. For some 
drugs, they pay as much as 10 times as their foreign counterparts.
  Lower drug prices abroad have led millions of Americans to purchase 
drugs from foreign sources. Internet pharmacies facilitate these 
transactions, and their recent proliferation has raised serious 
concerns about whether American consumers are receiving appropriate 
medical supervision.
  In October of 2000, Congress attempted to address international 
prescription drug pricing disparities by signing into law the Medicine 
Equity and Drug Safety Act. The MEDS Act sought to permit U.S. 
consumers, pharmacists, and wholesalers to purchase FDA-approved 
prescription drugs on the international market.
  Opponents of the legislation, including President Clinton, noted that 
the MEDS Act was doomed to fail from the outset. The act stipulates 
that the Secretary of Health and Human Services must verify that 
implementation would pose no additional risk to public health and 
safety and would lead to a significant reduction in the cost of drugs 
to the United States consumer.
  To the surprise of no one, the HHS Secretary, under both the Clinton 
and Bush administrations, has been unable to fulfill this stipulation. 
As a result, the MEDS Act has had zero effect on the pricing practices 
of drug manufacturers. In fact, U.S. prices for the five most popular 
drugs used by seniors increased by an average 16 percent in the 20 
months following enactment.
  The MEDS Act has, however, had other effects. In response to the 
bill's enactment, drug makers began requiring Canadian wholesalers and 
pharmacies to accept contract provisions prohibiting them from selling 
their products on the U.S. market or to Canadian pharmacies that sell 
to U.S. customers.
  GlaxoSmithKline's unilateral efforts to enforce its policies earned 
it well-publicized condemnation from U.S. consumer and Canadian 
pharmaceutical groups. The failure of the MEDS Act prompted the 
introduction of similar, but narrower, proposals in the 107th Congress.
  In the 108th Congress, the gentleman from Indiana (Chairman Burton) 
and our colleague on the Subcommittee on Wellness and Human Rights, the 
gentleman from Vermont (Mr. Sanders), have introduced Preserving Access 
to Safe, Affordable Canadian Medicines Act, or H.R. 847, which would 
prohibit drug manufacturers from using contract provisions, limitations 
on supply, or any other measure to limit the access to American 
consumers to safe, affordable prescription drugs from the Canadian 
market.
  Mr. Speaker, despite incessant pharmaceutical industry complaints to 
the contrary, research by the committee's staff demonstrates that 
international pricing disparities are not explained either by the 
duration and the cost of the FDA approval process or by 
disproportionate U.S. research and development cost. It is within our 
power to correct this problem if we have the will.
  Mr. Speaker, I know with the leadership of the gentleman from Indiana 
(Mr. Burton) and the other Members who have testified in front of me, 
we will be heeding the call of the American people and delivering a 
prescription drug benefit for Medicare. Congress must look at a blanket 
solution for fixing our broken health care delivery system, and 
Congress must act now.
  Mr. BURTON of Indiana. Mr. Speaker, while the gentlewoman was 
talking, I talked to the gentleman from Minnesota (Mr. Gutknecht), and 
one of the things in the law that the gentlewoman cited was that the 
FDA had to show that the products coming in were safe.
  Why do we not turn that around by amendment and say that the FDA has 
the burden of proof placed upon it to prove that pharmaceutical 
products coming into the country are not safe? And if we did that, that 
would open up the borders so people could buy these pharmaceutical 
products, and the FDA would have the burden of proof on its shoulders 
to prove they are not safe in order to stop them from coming in.
  Ms. WATSON. I think that is a great idea, Mr. Speaker. Maybe there 
are some amendments.
  Mr. BURTON of Indiana. I will have a bill drafted; and if Members 
would be willing, I would like them to cosponsor this change.
  Mr. SANDERS. If the gentleman will yield further, Mr. Speaker, I 
think the point the gentleman from Minnesota (Mr. Gutknecht) made and 
we all made is that over 1 million Americans now purchase their meds in 
Canada, and the number is growing every day.
  The chairman and I and the gentleman from Minnesota (Mr. Gutknecht) 
and the gentlewoman from California (Ms. Watson), we said to the 
gentleman from the FDA who was before the subcommittee, okay, you tell 
us you are very concerned about the safety aspect. We have a million 
Americans. Tell us how many of them have been made sick by receiving 
adulterated or counterfeit medicine. Out of 1 million people, the 
answer is zero.
  Now, we are all going to sign or we are on a request to the GAO to do 
something a little different. I think that if the FDA is concerned 
about health and safety, they should do a study telling us how many 
Americans are dying or seeing a deterioration of their health because 
they cannot afford the prices that the industry is charging them today. 
I have the feeling we are going to see a number a heck of a lot larger 
than zero. So maybe the FDA should worry about health and safety in 
terms of prices, rather than hounding people who are buying affordable 
and safe medicines in Canada.
  Mr. BURTON of Indiana. I think maybe that would be a good idea. Mr.

[[Page 13358]]

Speaker, I think that it is a great idea to make the FDA respond by 
having a GAO study that does exactly what the gentleman is saying, to 
show how many people have suffered or died or worse because they could 
not get the prescription drug benefits. So that should be in our 
request to GAO.
  Mr. Speaker, I yield again to the gentlewoman from California.
  Ms. WATSON. Amazingly, the USDA has sided with Glaxo and seems to 
think the crossborder sales should be stopped. They also cite safety 
concerns.
  I want Members to know, they can only point to a single case, Mr. 
Speaker, in Oregon where there may have been a problem, only one case.
  Mr. William Hubbard, senior associate commissioner of the FDA, has 
threatened both civil and criminal penalties to anyone who facilitates 
Americans' efforts to import prescription drugs from Canadian 
pharmacies, health plans, or insurance companies.
  Even senior citizens who fill their own prescriptions in Canada 
because they cannot afford American prices are breaking the law, 
according to Mr. Hubbard. His contribution to the debate is to scare 
senior citizens, disabled people, and low-income people, and to cut 
them off from a supply of affordable prescription drugs.

                              {time}  2115

  So we definitely need to look at that amendment, and I think my 
colleague is going to see the unity that he described in the beginning 
coming together to get a good bill. I thank him so much for his 
concern.
  Mr. BURTON of Indiana. We are just about out of time, but the 
gentleman from Ohio (Mr. Brown) came down to the floor and requested a 
few minutes.
  Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman from Indiana 
(Mr. Burton) and the gentleman from Minnesota (Mr. Gutknecht) for their 
work and the gentlewoman from California (Ms. Watson), the gentleman 
from Maine (Mr. Allen) and the gentleman from Vermont (Mr. Sanders) 
their tripartisan effort tonight to point out some of the things that 
PhRMA is doing and so many of the problems in providing a prescription 
drug benefit, but more importantly, what exactly the drug companies are 
doing to win over people in the body, to win over people in State 
legislatures.
  I would point out, earlier in the evening the gentleman from Indiana 
(Mr. Burton) and several others were talking about the drug companies 
stepping up their efforts to lobby Congress, to lobby State 
legislatures, even to lobby foreign countries. I know that the 
gentleman from Maine (Mr. Allen), the gentleman from Vermont (Mr. 
Sanders) and the gentleman from Minnesota (Mr. Gutknecht), as I have, 
have taken bus loads of seniors to Canada to buy prescriptions, same 
drug, same dosage, same manufacturer, all that, but for one-half, one-
third, sometimes one-fourth the price.
  The drug companies, as they kick their budgets up, the PhRMA effort 
to try to get their way all over the world, they plan to spend $72 
million for advocacy at the Federal level, mostly in Congress; $4.9 
million in lobbying the Food and Drug Administration; $48 million for 
advocacy at the State level; $17 million in foreign countries and much 
of that directed to the Canadians because the Canadians stand up to the 
drug companies and actually sell drugs at decent, affordable prices.
  Something jumped out in my State. There is an effort in my State 
among consumer groups and groups advocating for the elderly and labor 
organizations to pass a drug benefit not too different from the 
gentleman from Maine's (Mr. Allen) legislation in the State of Maine.
  The drug companies have in their budget, the PhRMA budget, according 
to the New York Times of Sunday, $15.8 million to fight ``a union-
driven, get-out-the-vote ballot initiative in Ohio,'' which would lower 
drug prices for people who do not have drug insurance. They are 
spending that money, one, to keep the issue off the ballot in Ohio. 
They are going to board of elections after board of elections after 
board of elections to try to kill the signatures, to try to disqualify 
and invalidate signatures so they do not get on the ballot; but then, 
if it does get on the ballot, because hundreds of thousands of Ohioans 
have already signed the petition, people in both parties in all 88 
counties, if it does get on the ballot, the drug companies are going to 
spend that kind of money to defeat it, even though it is clearly in the 
best interests of the overwhelming majority of the public.
  I wanted to bring that to people's attention, that $15 million is 
more than both candidates spent running for governor in 2002, $15 
million in a State of fewer than 11 million people. It is outrageous to 
do this. That is why I applaud the efforts of the gentleman from 
Indiana (Mr. Burton) and the gentleman from Minnesota (Mr. Gutknecht), 
the gentleman from Maine (Mr. Allen) and the gentleman from Vermont 
(Mr. Sanders) and the gentlewoman from California (Ms. Watson).
  Mr. BURTON of Indiana. Mr. Speaker, I thank the gentleman for coming 
down and joining us. We hope that he, along with a lot of our 
colleagues on both sides, will join with us in this fight to get this 
job done.
  We are just about out of time. If the gentleman from Minnesota (Mr. 
Gutknecht) needs time, I will yield to him.
  Let me just say one more time to the PhRMA people, if they happen to 
be following this discussion tonight, the people in the pharmaceutical 
industry, we all agree that they have done a great deal for mankind and 
they have given us the highest quality of health in the history of man; 
but at the same time, there is a limit to how much they can expect out 
of our veins as far as the price of pharmaceutical products, especially 
when we know those products are being sold for a lot less elsewhere. 
This fight is not going to end until we obtain victory.
  I want to tell them there are a lot of people here, besides those 
tonight, who are committed to making sure that we get these prices of 
pharmaceutical products down to a level that is acceptable for the 
American people, as they are in other parts of the world. No matter how 
much money the pharmaceutical companies spend or PhRMA spends, they 
ain't going to win this battle.
  So I think they need to get with the program instead of trying to 
stop Niagara Falls with a sieve. It is not going to work. I think 
Lincoln said it the best. He said, ``You can fool all of the people 
some of the time and some of the people all of the time, but you cannot 
fool all the people all the time,'' and this is so transparent the 
American people are going to get it and they are going to get it very 
quickly.
  I now yield to the gentleman from Minnesota (Mr. Gutknecht).
  Mr. GUTKNECHT. Mr. Speaker, the gentleman quoted one of my favorite 
Presidents. Let me quote another one. Ronald Reagan said, ``Markets are 
more powerful than armies.'' This idea that American consumers should 
be charged $360 for these pills when we can buy them in Munich, 
Germany, at the airport pharmacy for $59.05.
  Mr. BURTON of Indiana. One-sixth.
  Mr. GUTKNECHT. One-sixth. That will not stand. That is defending the 
indefensible, and sooner or later, it may not happen this year, may not 
happen next year, but sooner or later this wall will collapse just like 
the walls of Jericho.
  I want to thank the gentleman for his leadership, and I want to thank 
my colleagues on both sides of the aisle. As I said at the beginning, 
this is not a matter of right versus left. This is right versus wrong. 
This is wrong, and we should do something to stop it.
  Mr. BURTON of Indiana. I thank my colleagues, and we will be taking 
special orders in the future. I hope they will join with me when we do 
that, and I look forward to even the gentleman from Ohio (Mr. Brown), 
if he has the time, to come to our hearing, which is a week from 
Thursday, because it is going to be a very important hearing on this 
entire subject.

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