Washington, DC -- U.S. Congressman Sherrod Brown (D-OH) today joined a press briefing on the need to lower prescription drug costs to provide a successful Medicare drug benefit.  Brown, the top Democrat on the Health and Environment Subcommittee, joined Public Citizen in a discussion of the effects of drug manufacturers' monopolistic pricing on patients and the health care industry.

     "More than 75 percent of the elderly in Medicare have no coverage or inadequate Medigap coverage for prescription drugs.  More than 11 percent of all Medicare beneficiaries spent more than $100 a month of their own money on prescription drugs.   A Medicare drug benefit makes sense.  If we don't do something about the runaway cost of prescription drugs, we will end up subsidizing an industry whose overpriced products are fueling health care
inflation.  Congress must act now to bring down prices and provide seniors with adequate prescription drug coverage," Brown said.

     "The drug industry claims it spends about $500 million per approved drug on research and development (R&D).  No one knows where that number comes from.  We do know that more than one third of the research and development that takes place in the United States is actually funded by the government.  Of the 77 drugs approved for the treatment of cancer in the US by the FDA, 52 were developed by with federal funding.  Yet the drug industry prices prescription drugs like they footed the bill," Brown said.

     "We know drug companies overprice their products.  Drug company profits last year were $26.2 billion, outpacing every other industry by at least 5 percent.  Meanwhile, the CEO of Bristol-Myers Squibb was paid a $146 million in salary and benefits in 1998," he added.

     Brown said prescription drug prices can be reduced and not affect drug firms' ability to support the R&D costs necessary to bring a life-saving drug to market.  He cited the 1983 Hatch-Waxman Act, which paved the way for a robust generic drug industry.  At the time, brand-name drug manufacturers claimed generic competition would have a significant dampening effect on R&D.  Seven years later, the generic industry manufacturers nearly 50 percent of all drugs dispensed in the U.S., and PhRMA estimates brand-name drug companies annual R&D outlays have increased 600%, from $3 billion in 1983 to $21 billion in 1998.  Increased competition bolstered innovation as drug companies doubled their efforts to bring new medicines to bring to market.

     "Drug companies can voluntarily price their products to promote access, which they're not doing.  Or they can disclose their costs and try to justify their windfall prices, which they're not doing.  Or they can continue to exploit their monopoly advantage, which they are doing, until rampant health care inflation  forces us to regulate them like a utility.  If the drug industry continues to price irresponsibly, the third option may be the only one left," he added.

     Brown is a national leader in the effort to make prescription drugs affordable through better coverage and lower prices. He has joined Congressman Tom Allen (D-ME) and 138 other members as cosponsors of the Prescription Drug Fairness for Seniors Act, which enjoys more support than any other Medicare prescription drug measure in Congress.

     Brown introduced the  Affordable Prescription Drugs Act to allow customers to obtain lower prices through competitive, rather than monopolistic, pricing.  Under certain conditions -- if a prescription drug provides a substantial public health benefit -- the federal government could require drug manufacturers to license their patent to generic drug companies. The legislation also would require drug manufacturers to publicly disclose audited financial information relevant to the pricing of their drugs.