[Congressional Record (Bound Edition), Volume 149 (2003), Part 21]
[House]
[Pages 29110-29113]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        PRESCRIPTION DRUG PRICES

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 2003, the gentleman from Texas (Mr. Neugebauer) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. NEUGEBAUER. Mr. Speaker, I yield to the gentleman from Minnesota 
(Mr. Gutknecht).
  Mr. GUTKNECHT. Mr. Speaker, I want to thank the gentleman from Texas 
(Mr. Neugebauer) for yielding to me, and I want to thank him for 
claiming the time.
  I rise tonight to talk about an issue where we have had a lot of 
discussion so far tonight. We have had a lot of discussion during this 
entire legislative session. In fact, we have had a lot of discussion 
for a number of years, and that is the issue of the price that 
Americans pay for prescription drugs relative to the rest of the 
industrialized world; and the gentleman from Texas (Mr. Neugebauer) was 
good enough to join us in what really is an overwhelming majority of 
Members of the House who voted on this issue earlier this year.
  It all started several years ago for me when I went to a town hall 
meeting in Faribault, Minnesota, and there were a lot of seniors there; 
and they were talking about their trips up to Canada to save some money 
on prescription drugs. It was a little like a Nolan Ryan fastball. It 
just blew right by me, and I guess I decided if they wanted to go to 
Canada to buy their drugs, that is fine by me; and I never thought much 
about the issue.
  They continued to pester me about this, saying things like, why is it 
we as seniors are treated like common criminal, just because we are 
trying to save a few bucks on prescription drugs; and still I did not 
pay much attention to the issue until something totally unrelated 
happened.
  The price of pigs collapsed. Live hogs dropped from about $37 per 
hundred weight down to about $7, and we produce a lot of hogs in my 
part of the world. My pork producers kept calling me saying, 
Congressman, can you not do something about this; and so I called the 
Secretary of Commerce, and I called the Secretary of Agriculture. I got 
essentially the same answer. I should finish the story. What they 
really complained about was all of these Canadian hogs coming across 
our borders making our supply-and-demand situation even worse, and they 
said can you not do something at least about all these Canadian hogs.
  I called the Secretary of Agriculture, called the Secretary of 
Commerce, got essentially the same answer. They said, well, that is 
NAFTA. That is free trade. We cannot stop the Canadian hogs from coming 
in, and all of a sudden a lightbulb went on over my head, and I said, 
wait a minute, you mean we have free markets and free trades when it 
comes to pork bellies, but not when it comes to Prilosec? I think the 
Secretary of Commerce sort of chuckled and said, well, I guess that is 
right.
  That is when I began this little crusade of mine, and I began to 
study this issue even more, and Mr. Speaker, the more I have learned, 
the more I realized we in Congress need to do something about this 
because we created this environment. Unlike some of my friends on the 
left, I usually do not spend a whole lot of time saying shame on the 
pharmaceutical companies. I say shame on us because essentially we have 
created an environment that they are taking advantage of. We protect 
them like no other product from foreign competition, but let me talk 
first about the differences between what we pay in the United States 
versus what they pay in the rest of the industrialized world.
  Let me give my colleagues some examples. We were in Munich, Germany,

[[Page 29111]]

earlier this year; and we purchased 10 of the most commonly prescribed 
prescription drugs off the shelf at the Munich airport pharmacy, and 
here are some of the prices we paid.
  We bought 10 tablets of Cipro, 250 milligrams for $35.12 American. 
That same product here in Washington, D.C., is $55. We bought Coumadin. 
That is a drug my father takes. It is a blood thinner that was 
developed at the University of Wisconsin. The generic version is called 
Warfarin. It actually is a rat poison. We bought it in Germany, 100 
tablets, 5 milligrams for $21. That same package of drugs here in the 
United States, same product, made by the same company, under the same 
FDA approval, sells here in the United States not for $21 but for 
$89.95.
  Glucophage, a miracle drug for diabetes, a drug that we purchased in 
Germany, 30 tablets, 850 milligrams, $5 in Germany, $29.95.
  Pravachol, Prozac, Synthroid, all the same story. Come down here to 
this one, and this is the one that really gets to my gizzard, and that 
is the issue of the anticancer drugs, where we, American taxpayers, 
have paid so much to develop these drugs. Tamoxifen, we bought, in fact 
the actual number, we rounded it off here. It was $59.05 for 60 
tablets, 20 milligrams of Tamoxifen. An amazing drug, a miracle drug in 
terms of the treatment of breast cancer. That same drug we checked here 
in Washington, D.C., local pharmacy, $360, six times more in the United 
States. Here is what really chaps my hide.
  American taxpayers paid to develop that drug. As a matter of fact, 
through the NIH we paid to take that drug all the way through phrase 
two trials. The American taxpayer paid to take that drug through phase 
two trials, and then we licensed it to one of the pharmaceutical 
companies, and they sell it back to us.
  Clearly, we ought to pay our fair share of the cost of research. I 
think we ought to subsidize the people in sub-Saharan Africa, but I do 
not think the American taxpayers and the American consumers should have 
to subsidize the starving Swiss or the starving Germans. It really is 
time for them to pay their fair share.
  Mr. Speaker, we have to ask is it really fair to make American 
consumers pay six times more for a drug that they paid to develop and 
take through phase two trials? This story goes on.
  If we look down here at Zoloft, $82.52 in Germany, $132.95 for 
American consumers and the story goes on; and some people say, well, 
that is because in some countries they fix the prices. They have price 
controls. In some respects that is true, but it is not always true.
  For example, in Great Britain, the pharmaceutical companies can sell 
their drugs for whatever they want. There are no price controls in 
Great Britain. That is according to a report that was done and paid for 
by the Pharmaceutical Association in Europe, done, we have a copy of it 
in my office; and if any Member would like a copy, they can just call 
and we will send them a copy. Essentially what they do in Great Britain 
is they can charge whatever they want, but the British medical plan 
will only reimburse so much for these drugs, and they found that 
consumers in Great Britain have a tremendous amount of resistance to 
paying huge co-pays.
  I have a drug here, Cipro, a marvelous drug. We bought this in 
Germany, $35 in Germany, $55 here in the United States, and my 
colleagues do not have to take my word for it. They do not have to just 
take my word for it now. More and more of the media are actually doing 
their own research, and here is another copy and Members can get a copy 
of this by going to my office, calling my office. I think we may even 
have this on our Web site. There is one done by USA Today. This was 
done by the Associated Press; and I will not bore my colleagues with 
all the numbers, but they are exactly the same, and they compare the 
prices.
  For example, Lipitor in the United States, the best price they could 
find online in the U.S., 10 milligrams, 90 tablets each, Lipitor, 
$207.99. One can buy that drug in Canada, the online price, $132.07. 
Paxil, $80.99 in the United States, $40.80 in Canada; and those stories 
go on and on. Vioxx, an amazing drug. I guess it is an antirheumatoid-
type drug. Fortunately, I do not have to take it yet, but it is $85.99 
in the United States. It is only $36.17 in Canada.
  But the real issue is, why is it that the world's best customers pay 
the world's highest prices? That is a fair question. It seems to me we 
as policymakers for the United States of America ought to ask that 
question, and we ought to demand better answers.
  I want to come back to something I mentioned earlier; and I had the 
Congressional Research Service do a little research for me, and I asked 
is there any other product class that you can think of where we provide 
so much protection from competition from the same product from abroad? 
They went through and they did some research, and in fact, I will just 
read from what the CRS says, and they are our official researcher. I 
will quote. It said: ``We have been unable to locate any statutory 
provisions similar in language and structure to the one in the Food and 
Drug Cosmetic Act.'' In other words, nobody enjoys that kind of 
protection.
  Matter of fact, they went even further. They said: ``As indicated 
above, our research has uncovered no other statute that contains 
language similar to that in section 381(d),'' and this is the 
interesting thing. Even heavily regulated industries such as chemicals, 
pollutants and munitions are not apparently subject to the statutory 
provisions limiting reimportation of the product to its original 
manufacturer.

                              {time}  2115

  In other words, there is no other product class.
  Now, some people say, well, safety. It is all about safety. We want 
to protect the consumers. Members, understand this, we keep incredibly 
good records in terms of how many people have become seriously ill or 
died from taking drugs from other countries. The FDA keeps those 
records and the CDC keeps those records. As far as we can determine, 
and this is under testimony that was given in front of a subcommittee 
of the Committee on Government Reform, and it is an easy number to 
remember, it is zero. It is a nice round number.
  Now, you contrast that to how many people get very ill and die every 
year from food-borne pathogens. Now, it is the Food and Drug 
Administration, and yet for some unknown reason, some reason unknown to 
me, we have set, for things like Cipro, we have set the bar impossibly 
high. We have an absolutist standard. But when it comes to fruits and 
vegetables, we barely even look at them when they come into the 
country.
  The bottom line is you can get just as sick, as a matter of fact you 
can die, from food-borne pathogens. By their own studies, the FDA 
acknowledges that 2 percent of the fruits and vegetables that come into 
the United States every day, 2 percent of them, are contaminated with 
food-borne pathogens, including things like salmonella. My colleagues, 
if you get salmonella, and particularly if you have any other kind of 
medical problem going on in your system at that time, you can die.
  We know, for example, in the last 2 years, that 2,264 Americans have 
become seriously ill from eating raspberries from Guatemala. Do we stop 
raspberries from Guatemala from coming in today? I do not think so. 
Forty percent of the orange juice that Americans consume comes from 
other countries, and yet it comes right in. They say, well, gee whiz, 
somebody might get in there and contaminate the drug supply. What about 
contaminating the orange juice supply? It seems to me we have this 
ridiculous measure when it comes to safety for prescription drugs and 
virtually no measure when it comes to our food supply.
  Now, I am not saying we need to have a much stronger implementation 
of a security system for fruits and vegetables, but it seems to me if 
you are going to have one standard for fruits and vegetables and 
another standard for prescription drugs, at least we, as public 
policymakers, ought to demand some kind of a rationale from the Food 
and Drug Administration.

[[Page 29112]]

  Now, the bill we are going to probably consider here at the end of 
the week does nothing about allowing Americans to have access to world-
class drugs at world-market prices, and I think that is a terrible 
mistake. Because I think, here in Washington, we have spent so much 
time talking about coverage, we have to find ways to get people 
coverage for prescription drug benefits, that we have missed the big 
picture. The issue is not so much about coverage. Every senior in 
America qualifies to buy prescription drug coverage. They can buy it 
through the AARP. Prescription drug coverage is available in lots of 
ways from lots of sources. The issue is not coverage, the issue is 
affordability. And that is the tragic problem with the bill that we 
will consider later this week, and that is that it does precious little 
to deal with affordability.
  Now, the sponsors are going to say, well, wait a second, Congressman 
Gutknecht, we are going to create these systems, sort of like the 
Federal Employees Health Benefit Plan, and that is going to bring down 
and hold down the price of prescription drugs. Well, we have some 
evidence of just how well the Federal Employees Health Benefit Plan 
does in terms of lowering the cost of prescription drugs. Let me give 
some examples.
  For example, the Blue Cross/Blue Shield plan that services Federal 
employees, they do get a discount on Coumadin. I mentioned here that 
Coumadin, at the retail price in the United States, can be $90, or 
$89.95. Well, the Blue Cross/Blue Shield plan does not pay $89.95. They 
get a discount. They buy it for $55.31. The Mail Handlers Plan, 
however, does not get their drugs for $55, they pay $72.24. My 
colleagues, you can buy that same drug off the shelf in Munich, 
Germany, at the Munich Airport pharmacy, for $21. In other words, the 
Blue Cross/Blue Shield plan pays more than double what the Blue Cross/
Blue Shield Federal Employees Benefit Plan does.
  And it goes on. Take Glucophage. We talked about Glucophage. Well, 
this is in a different quantity. We are talking about a larger 
prescription. But the Glucophage they are buying using the Federal 
Employees Benefit Plan, they buy it for $90 for the Blue Cross/Blue 
Shield plan. The Mail Handlers pay $118. The HMO plan, they get a heck 
of a deal, they buy it for $18.30. But you can buy it right off the 
shelf in Germany for $22 for that exact same drug.
  And the story goes on with all of the plans. And Members, do not take 
my word for it. This is information that was done by the gentleman from 
Oklahoma (Mr. Istook) and his subcommittee staff, where they did some 
comparisons about what we pay even through the Federal Employees 
Benefit Plan versus prices off the shelf in Canada, in Europe, and 
other industrialized countries. And the answer is that in every 
category we pay a lot more, even with the discounts that we get for the 
Federal employees.
  As I say, I think we ought to pay our fair share, and I believe 
research is important. I am vice president of the Committee on Science, 
and I am proud of the fact we Americans represent 6 percent of the 
world's population, but we represent over half of the basic research 
done in the world. That is important. And I think it is important that 
the pharmaceutical companies continue to do that kind of research. But 
I think Members have to understand that we subsidize that research here 
in the United States in three separate ways.
  First of all, we subsidize it through the Tax Code. Now, when these 
pharmaceutical companies say, well, we spend so much on research, well, 
you might just ask them how much are you able to write-off on your 
Federal tax forms? And if you do business in Puerto Rico, how much 
Federal income tax do you pay? And in addition to that, is it not true 
over the last 10 years you have taken over $28 billion in investment 
tax credits for the research that you do; for research and development 
tax credits? So you add it up, and the net real cost to the 
pharmaceutical industry is much less than they sometimes say.
  And, incidentally, more and more independent groups, bipartisan 
groups, nonpartisan groups are coming to the same conclusion, and that 
is that the pharmaceutical industry is now spending more money on 
marketing and advertising, in fact, in some cases some companies 
dramatically more on marketing and advertising than they are for 
research. So research is important, but we pay for it through the Tax 
Code. We subsidize it through the Tax Code.
  We subsidize it also in the amount that we spend on research. I 
mentioned that I am proud of the fact that we finance an awful lot of 
research with taxpayers' dollars here in Washington. This year we will 
spend upwards of $27 billion through the NIH, the CDC, even the 
Department of Defense on research projects which will directly or 
indirectly benefit the pharmaceutical industry.
  And then, finally, of course, the way we subsidize them is in the 
prices we pay. I think once is enough. I think once we help to develop 
Taxoxiphen, we ought to at least be able to buy it at world market 
prices for American consumers.
  This is a huge issue, my colleagues. And it is one that more and more 
seniors, and not only seniors but American consumers in general 
understand this issue. And I think there is a feeling here that if we 
just pass this prescription drug benefit plan that somehow this will go 
away. Well, Members, you need to understand a few things about, 
ultimately, the facts about this prescription drug benefit. And I am 
not here to criticize the Medicare reforms, I think most of the 
Medicare reforms we are talking about in this bill are very good, very 
necessary, and perhaps even overdue. But when you start talking about 
the prescription drug benefit, I hope you will understand, at least 
from my perspective, the facts:
  First of all, this bill, they purport, is going to cost $400 billion. 
I think it is going to be a lot more than $400 billion, because we do 
not have effective ways of dealing with the cost, we are going to pay 
in the affordability of these drugs. But let us say it is $400 billion. 
Well, the CBO tells us virtually every dollar of that is going to have 
to be borrowed. To pay for this new entitlement, we are literally going 
to have to borrow the money from our kids and grandkids. In some 
respects, I think that is a terrible tragedy.
  But as we look at the overall issue, what is going to happen is next 
year, by the time people begin to understand this, they are going to 
say, now, wait a second, and whether it is going to be 16 percent or 36 
percent, no one really knows, but we do know this, there will be people 
who have prescription drug coverage today, through their former 
employers, who are going to be pushed off of the system and all of a 
sudden they are going to be thrown into this new government plan, and 
what they are going to find out is it is not as generous as the plan 
that they had through their former employer, for the most part. And 
they are not going to be happy.
  I think a lot of conservatives and taxpayers are not going to be 
happy when they see the cost of this. And I think as they look at the 
final issue, if next year they look at the system and say, wait a 
second, you mean even after this, we are still going to be spending 
$360, or some number, let us say we get a 15 percent discount or a 20 
percent discount off $360, that is roughly a $72 discount, that gets 
the prices down to about $290. That still is a lot more than they are 
paying in Europe for the same drugs.
  No, I think Americans should pay their fair share. I think we are 
paying our fair share. But I think if we pass this bill later this week 
without dealing with the fundamental cause, or one of the fundamental 
drivers of this whole debate in affordability, it seems to me we are 
making a huge mistake. And it is one I think the voters will not be 
appreciative of once they begin to realize.
  Yes, we need to reform Medicare. We have 50 million baby boomers 
moving on their way towards retirement. And it is inevitable that as we 
go forward, we have to do something about reforming the Medicare 
system. We have to make it fairer. We have to give consumers and 
seniors more choices. But if

[[Page 29113]]

we are going to add a prescription drug benefit to the package, this 
new $400 billion entitlement, and going up in my opinion, then it seems 
to me we have an obligation to make sure American consumers, American 
taxpayers are getting their monies worth.
  So I would hope that Members would at least pause and ask the 
question what are we going to do about opening up markets? What are we 
going to do to control the cost of these prescription drugs? What are 
we going to do to make them more affordable for American consumers? I 
think the answer ultimately to me is quite simple, and that is give the 
market access. Do what we do with those pig producers, require some 
competition across the border. Allow prescription drugs to work as 
virtually every other market does.
  When markets work, when competition works, prices will level. And the 
net result is that we will pay considerably less in the United States. 
And some of the people in other industrialized countries are going to 
probably have to pay a little more. But that is the way markets work. 
They tend to level.
  Mr. Speaker, again I want to thank the gentleman from Texas (Mr. 
Neugebauer) for giving me the chance to present some of these things 
tonight. I know that not everyone agrees with me. I try to be 
respectful when I debate and discuss these, but it is such an important 
issue. And if I could just close with one other point, because some 
people say this cannot be done safely.
  Members, I would encourage you to take a look at the newest 
technology that exists today. This is not pie in the sky. I have the 
technology right here in this little vial literally about 100 computer 
clips. And within 2 years, most of the products being sold at Wal-Mart 
stores will have these on them. This is the new UPC codes. And these 
little computer chips in this vial, there are about 100 of them, they 
are so small you cannot see them, but they will be able to track that 
product literally so that you will know when it runs through the 
scanner that this Cipro was produced at the Munich, Germany, plant on 
September 3, 2001 at 1 p.m. in the afternoon and it is in fact Cipro.
  So the idea that we do not have the technology to do this today is 
really laughable. It exists. It is being used on other products. It 
will expand and be used even more. But, Mr. Speaker, and particularly 
the gentleman from Texas (Mr. Neugebauer), I appreciate having the 
opportunity to present some of these things. If Members would like more 
information from my office or want to go to my Web site, simply go to 
gil.house.gov. We have some great charts which explain this.
  As John Adams said, ``Facts are stubborn things.'' This is a stubborn 
thing. This chart is not going to go away. And under the bill we are 
considering this week, it will not change much. Ultimately, we have the 
power to change it. The FDA works for us, not the other way around. It 
is not shame on the pharmaceutical industry, it is shame on us.

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