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SEC. 901. None of the amounts made available in this Act for the Food and Drug Administration may be expended to approve any application for a new drug submitted by an entity that does not, before completion of the approval process, provide to the Secretary of Health and Human Services a written statement specifying the total cost of research and development with respect to such
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The CHAIRMAN. Pursuant to the order of the House for Monday, July 10, 2000, the gentleman from Maine (Mr. ALLEN) will be recognized for 5 minutes, and the gentleman from New Mexico (Mr. SKEEN) will be recognized for 5 minutes.
Mr. SKEEN. Mr. Chairman, I reserve a point of order.
The CHAIRMAN. The gentleman from New Mexico reserves a point of order.
The Chair recognizes the gentleman from Maine (Mr. ALLEN) for 5 minutes.
Mr. ALLEN. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, during the debate on this legislation yesterday, there was a great deal of bipartisan concern about the high prices that our seniors pay for their prescription drugs.
In fact, we did pass the Crowley-Coburn amendment which would provide for those seniors who are healthy enough and able enough to go to another country to buy their prescription drugs relief for those few. But it is worth remembering that only 2 weeks ago the majority in this House passed by three votes a piece of legislation preferred by the pharmaceutical industry that would rely on private insurance companies for seniors to get prescription drug coverage.
At the same time, a Democratic alternative that would have provided a Medicare prescription drug benefit was not allowed even to have a vote in full debate. Today, I rise to offer an amendment that would give taxpayers full disclosure of their investment in the research and development of prescription drugs. In the debate over extending a prescription drug benefit to Medicare beneficiaries, the pharmaceutical industry has repeatedly raised concerns that efforts to make drugs affordable could impact their ability to conduct research and development of new drugs.
Mr. Chairman, we all support the industry's breakthroughs that have improved and extended the lives of people with serious illnesses and chronic disabilities, but the explosion in prescription drugs' prices, increased utilization, the widespread lack of prescription drug coverage has left millions of Americans unable to afford the drugs that their doctors tell them they have to take.
When Medicare was created 35 years ago, there was no provision for prescription drug insurance, because the pharmaceuticals played a smaller role in health care and that was not a significant cost. But today seniors, who represent 12 percent of the population, consume one-third of all prescription drugs.
The lack of adequate coverage, combined with a high price of prescription drugs means that seniors are left to make choices that no American should make. Do they pay the rent or take their high blood pressure medication? Do they buy groceries this week or fill their prescription for an osteoporosis drug?
Now, the pharmaceutical industry has been working to stop our efforts to provide a benefit under Medicare or a discount for seniors who need a discount, and it is also true they always make the point that they need these huge profits in order to conduct research and development, but after they spend in 1999, $24 billion in research and development, they still had $27.3 billion in profits. These dozen or more companies.
The April issue of Fortune magazine reports that once again, Fortune pharmaceuticals are the most profitable industry in the country by every measure; number one in return on revenues, number one in return on assets, number one in return on shareholder equity.
Now, the historical evidence suggests to us that continued R&D will increase despite what the industry says. In 1984, when the Waxman-Ha tch Ac t was passed, the industry predicted that it would lead to cutbacks in R&D; but, in fact, the pharmaceutical companies more than doubled their investment in research and development from $4.1 billion to $8.4 billion over the 5 years following the enactment of that legislation.
Finally, I would note that what is going on here is that the pharmaceutical industry is developing new drugs in partnership with the public. Though we do not have exact figures, an estimate by the National Institutes of Health is that taxpayer-funded research, combined with private foundation-funded research, accounts for almost 50 percent of all the medical research in this country related to pharmaceuticals.
It is time for the industry to disclose just how much is spent by private industry and just how much is spent by the taxpayers essentially in the development of new drugs. We need real figures from the industry.
Our amendment is simple. We are simply asking for disclosure. We should not expend any money for the FDA to approve a new drug application unless the total cost of research and development of the drug is revealed.
Mr. Chairman, we are particularly interested in knowing how much taxpayers have contributed to the development of these new drugs.
The CHAIRMAN. Does the gentleman from New Mexico continue to reserve a point of order?
Mr. SKEEN. Mr. Chairman, I continue to reserve a point of order.
Mr. Chairman, I claim the 5 minutes in opposition, and I yield such time as he may consume to the gentleman from New Jersey (Mr. FRELINGHUYSEN).
Mr. FRELINGHUYSEN. Mr. Chairman, I thank the gentleman from New Mexico (Mr. SKEEN), the chairman, for yielding me the time, and I rise in opposition to this amendment.
Mr. Chairman, all of us here are supportive of providing better access to prescription drugs to those that need them. Just 2 weeks ago, we fought all day to provide greater coverage for older Americans.
We all agree that no person, particularly the older people, the elderly, should ever have to choose between food and medicine. But as we work to provide greater coverage and access, we do not want to undermine today's private scientific research and medical innovation that will continue to find tomorrow's cures, which I believe this amendment does.
Mr. Chairman, in our collective excitement to do more here, some today appear to be determined to do just that with a number of seemingly attractive amendments to this agricultural appropriations bill. They seek to do so by promoting poorly disguised price controls, by throwing out Food and Drug Administration protections for consumers, by suggesting that all imported drugs are safe, reliable and fresh, and we know they are not; by holding up Canada as a model of health care delivery and inexpensive medicines, which it is not; by requiring price disclosures that no other American industry has to comply with; and by demanding research and development information and denying their product approvals if not forthcoming and by ignoring the fact that about 25 cents on the R&D dollar actually results in an approved FDA product or new medicine.
And they seek to do so, Mr. Chairman, by suggesting that it is only the National Institutes of Health that does basic research and that the taxpayers are being ripped off by the pharmaceutical companies. While the rhetoric fits the times, the facts deserve some weight.
With specific regard to the Allen amendment, I believe we are better served by promoting research partnerships between government and the private sector that yield new medicines and cures, not by discouraging them. This amendment deserves to be soundly defeated.
The CHAIRMAN. The gentleman from Maine (Mr. ALLEN) has 15 seconds remaining and the gentleman from New Mexico (Mr. SKEEN) has 2 3/4 minutes remaining.
Mr. ALLEN. Mr. Chairman, I yield the balance of our time to the gentleman from Ohio (Mr. BROWN).
Mr. BROWN of Ohio. Mr. Chairman, I thank the gentleman from Maine (Mr. ALLEN) for his good work on this. We need to know what is behind the $500 million claim from the drug industry. We need to know if marketing costs are factored in, if executive salaries are factored in, if administrative costs are factored in. If the drug company wants American consumers to buy into the premise that outrageous prices are essential for research and development, they need to show us the numbers.
[Time: 13:30]
The CHAIRMAN. The gentleman from New Mexico has 2 3/4 minutes remaining.
Mr. SKEEN. Mr. Chairman, I continue to reserve the point of order.
The CHAIRMAN. Does the gentleman from New Mexico insist on his point of order?
Mr. SKEEN. Mr. Chairman, does the gentleman from Maine (Mr. ALLEN) withdraw his amendment?
Mr. ALLEN. Mr. Chairman, I understand the point of the point made by the gentleman from New Mexico (Mr. SKEEN), chairman of the committee, and consequently I ask unanimous consent to withdraw my amendment.
The CHAIRMAN. Is there objection to the request of the gentleman from Maine?
There was no objection.
The CHAIRMAN. The amendment is withdrawn.
AMENDMENT NO. 37 OFFERED BY MR. BROWN OF OHIO
Mr. BROWN of Ohio. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 37 offered by Mr. BROWN of Ohio:
Insert before the short title the following title:
SEC. 901. None of the amounts made available in this Act for the Food and Drug Administration may be expended to approve any application for a new drug submitted by an entity that does not agree to publicly disclose, on a quarterly basis during the patent life of the drug, the average price charged by the manufacturer for the most common dosage of the drug (expressed as total revenues divided by total units sold) in each country that is a member of the Organisation for Economic Co-operation and Development.
Mr. SKEEN. Mr. Chairman, I reserve a point of order on the amendment.
The CHAIRMAN. The gentleman from New Mexico reserves a point of order.
Pursuant to the order of the House of Monday, July 10, 2000, the gentleman from Ohio (Mr. BROWN) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Ohio (Mr. BROWN).
Mr. BROWN of Ohio. Mr. Chairman, I yield myself 3 minutes.
Mr. Chairman, I am pleased to offer this amendment with the
gentleman from Maine (Mr. ALLEN) and the gentleman from Vermont (Mr.
SANDERS) and the gentleman from Arkansas (Mr. BERRY) and the
gentleman from Illinois (Mr. JACKSON) and the gentleman from California
(Mr. WAXMAN >).
This amendment fulfills a simple objective. It helps
consumers decide for themselves whether prescription drug prices are fair. As it
stands now, consumers know what they pay to a pharmacy for a drug, but they do
not know what the manufacturer charges for that drug, what the manufacturer
charges other consumers for it, what the manufacturer charges other countries
for it, what similar drugs cost. My colleagues get the idea.
This amendment would require manufacturers to disclose to
American consumers the prices they charge here versus what they charge in other
industrialized nations.
The pharmaceutical industries question the accuracy of
studies comparing prescription drug prices in the U.S. to those in other
industrialized countries. They have questioned the accuracy of studies comparing
the price seniors pay to those paid by HMOs. Drug makers could put these
disputes to rest simply by disclosing their prices.
Two weeks ago, I took a dozen seniors from Ohio to a
Canadian pharmacy where they paid one-half, one-third, one-sixth of what it
would have cost to purchase those same drugs in northeast Ohio.
When confronted about price differentials like this, the
industry typically tried to deflect the blame by talking about Canada's
universal health care system. They imply that the only way to achieve lower
prices in this country is to adopt the Canadian health care system. They imply
that Canada pays less for prescription drugs because Canadians have a
government-run health care program, not because of lower prices.
The drug industry conveniently confuses two different
issues. Seniors in my district bought prescription drugs in Canada and paid
lower prices. They did not step into Canada and suddenly become eligible under
that nation's universal health care system.
Canada negotiates reasonable drug prices. Its 13 provinces
also provide universal health care coverage. That means Canadians receive
assistance towards the purchase of prescription drugs.
American consumers, in spite of what people here say, in
spite of the drug industry, American consumers are smart enough to know the
difference.
Although the drug industry tends to focus on Canada based
on what we can glean from retail pricing studies, Canada is not the only nation
that pays lower prices for drugs. The United States pays the highest prices in
the world for prescription drugs.
This amendment says to the drug industry, if those studies
are wrong or misleading, just show us your prices. Prescription drug companies
may argue that this is proprietary information or raise the issue of price
collusion. Of course, they do provide this information to a private organization
called IMS, and this company makes the information available to other companies
for a price. So drug companies already know each other's prices, so price
information is no secret unless one is a consumer.
Americans cannot afford to purchase prescription drugs, and
they cannot afford not to.
Under our amendment, consumers would have the power to
compare prices and quality and value to make smart purchases.
Mr. SKEEN. Mr. Chairman, I continue my reservation, and I
rise to claim the time in opposition to the amendment.
The CHAIRMAN. The gentleman from New Mexico (Mr.
SKEEN) is recognized for 5 minutes in opposition to the amendment.
Mr. SKEEN. Mr. Chairman, I yield 3 minutes to the gentleman
from New Jersey (Mr. FRELINGHUYSEN).
Mr. FRELINGHUYSEN. Mr. Chairman, I thank the gentleman from
New Mexico for yielding me this time.
Mr. Chairman, I rise in opposition to this amendment as
well. First, I think Members need to think long and hard about whether or not we
want the Federal Government in the business of keeping the books on private
industry, any private industry. I believe that it is entirely inappropriate for
the Federal Government to have such a role.
Second, looking at the specific language of this amendment,
it would require every company seeking approval for every new medicine to, and I
quote, ``agree to a quarterly disclosure during the patent life of the drug of
the average price charged by the manufacturer in each company that is a member
of the OECD, which is the Organization for Economic Cooperation Development.''
What does this exactly mean? Many of these OECD countries
have price controls, and just about all of them do. Are we asking the sponsors,
asking the companies to provide us with a list of other countries' price
controls?
As we know, even in these countries, largely Europe and in
the United States and Canada, and specifically in countries with price controls
which we do not have, there is no single price for medicines. Whether here at
home or abroad, prices vary everywhere. That happens to be the marketplace at
work.
All of us here, as I said a few minutes ago, are supportive
of providing better access to prescription drugs to those who need them. Price
controls are not the answer. Canada certainly does not have all the answers. But
as we work to provide greater coverage and access, we do not want to undermine
today's American private scientific research and medical innovation that will
continue to find tomorrow's cures for the ills of the world and within our own
country.
This type of amendment will do just that. Like its
predecessor, it needs to be soundly defeated.
Mr. BROWN of Ohio. Mr. Chairman, I yield 30 seconds to the
gentleman from Maine (Mr. ALLEN).
Mr. ALLEN. Mr. Chairman, I thank the gentleman from Ohio
for yielding me this time.
Mr. Chairman, this is a simple amendment, and it would
require prescription drug companies to disclose the prices they charge here in
the United States and in other countries.
We know from studies in my district and elsewhere that
Mainers, for example, pay 72 percent more than Canadians and 102 percent more
than Mexicans for the same drugs and the same quantities from the same
manufacturers.
We have the most profitable industry in the country
charging the highest prices in the world to people who can least afford it. In a
free enterprise system, we ought to get some more information about what those
prices are.
Mr. BROWN of Ohio. Mr. Chairman, I yield 1 1/2 minutes to
the gentleman from Vermont (Mr. SANDERS).
Mr. SANDERS. Mr. Chairman, I thank the gentleman from Ohio
for yielding me this time.
Mr. Chairman, what we are talking about is one of the great
health care crises facing this country, and that is that millions of Americans
cannot afford the outrageously high cost of prescription drugs in this country.
They know that an absurd situation exists by which, when an
American spends $1 for a prescription drug manufactured in the United States, a
German spends 71 cents, somebody in Sweden spends 68 cents, the United Kingdom
spends 65 cents, and in Italy 51 cents for the same exact drug.
So what this amendment says very simply is we want to know
the price that the pharmaceutical industry is selling that product abroad for.
We want to know, in fact, how come a Canadian pharmacist can buy Tamoxifen, a
widely prescribed breast cancer drug, for one-tenth the price that an American
pharmacist can buy that same product. Meanwhile we know that the pharmaceutical
industry makes a profit in Canada, selling the product at one-tenth the price
that our people have to pay for it.
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