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   They are magnificently successful in that quest. And at least one of the reasons we are debating this issue today is that they are so successful that every year the share of our health care dollar that goes to prescription drugs increases because we now have conditions that can be treated by prescriptions that previously required hospitalization, if indeed they could be treated at all.

   The process of taking an idea through its basic and applied research , its testing and its development to licensing by the Food and Drug Administration is long and arduous and is aimed both at safety and effectiveness. During that period of time, these companies spend a great deal of money with no return. It is clear, both to the proponents and opponents of both the first- and second-degree amendments,

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   We are also dealing with a business, as any other in the United States, that spends a good deal of its time and effort in developing new products. Even at the early stage, there are some factors that favor the pharmaceutical industry because of its importance to the United States. It, as other companies, is entitled to a research and development tax credit , but it, unlike most other industries, also benefits hugely from research conducted by the National Institutes of Health, as the primary sponsor of this amendment well knows. So approximately half of all of these research and development costs are already

   underwritten by the taxpayers of the United States, either through tax credits or through our direct appropriations to the National Institutes of Health.

   It is at this point that the wonderful line from ``Alice in Wonderland'' comes to mind, and the situation becomes ``curiouser and curiouser.'' At the point at which these pharmaceutical products have been licensed, the actual manufacturing cost for that pill is, generally speaking, not very high. And so much of the price structure is to cover the research and development , the very large advertising costs to which the Senator from North Dakota referred, other marketing costs, the lobbying those companies do in the Congress, and a reasonable and, I may say, in most cases generous profit. But these U.S.-based, often U.S.-owned, pharmaceutical manufacturing companies consistently charge their American customers--not the individual patient in this case but the huge regional drugstore chains as well as individual pharmacies--far higher prices than they charge for the identical product overseas or across our northern and southern borders.

   One would think in a normal market that prices would be nondiscriminatory or, if anything, the manufacturers would be grateful enough for the tremendous aid and assistance they receive from the taxpayers of the United States perhaps to give at least a small price break to American purchasers. But, no, as has been pointed out, they charge Americans pretty close to twice as much as they charge anyone else. These wholesale prices, obviously, are reflected in retail prices for the drugs.

   My experience in the State of Washington is very much similar to that outlined both by the Senator from Vermont and the Senator from North Dakota. We ran a little test; we went up to Canada, priced identical drugs in the State of Washington and in British Columbia, and found a 62-percent difference. In other words, it was way less expensive to buy them in Canada. So busloads of Americans go from Seattle and other parts of the State of Washington across the border to buy drugs and bring them back.

   Why, one asks oneself, would American companies do this? Why would they discriminate against Americans?

   They say: There is a simple answer to that. The Canadian Government, the Mexican Government, the Government of the United Kingdom, fix the prices of drugs. They want their citizens to get these pharmaceutical products less expensively than Americans do. So they, by government fiat, set the prices. And so we sell them, the drugs, for a lower price for a simple reason: We have already manufactured and sold lots of them in the United States. And when you go from the ten-millionth pill to the twenty-millionth pill, it doesn't cost you very much to manufacture those new pills, so we can still make a profit, even though we are selling them at half price in other countries.

   Gee, isn't that unfair? Yes, I guess so, but that is the way the world is.

   Now, that particular argument that price-fixing countries do much better for their consumers than a free market does in the United States is really a two-edged sword. It is one heck of an argument for price fixing in the United States. The junior Senator from Minnesota, a couple weeks ago, put up a proposal that would do exactly that, fix the price of drugs in the United States. This is a point at which I agree with the drug companies. They say: You fix prices and you will dry up research and development . I am not sure how far down we look for the validity of that argument, given the great excess of

   advertising costs over research and development costs, but let us assume that it is totally and completely valid as an argument. Then under those circumstances, we shouldn't be fixing prices here in the United States. But that doesn't mean we should continue to allow Americans to suffer the immense discrimination that goes on consistently year after year, product after product in this country.

   When I discovered the extent of this problem, basically out of a cover story in Time magazine--I believe it was last November--it seemed to me, as a former State attorney general who for an extended period of time was in charge of consumer protection, fine, you just tell them by law to stop discriminating. Don't charge Americans any more than you are willing to charge Canadians or Italians or citizens of the United Kingdom.

   That is price fixing, the companies say. That is a terrible thing.

   Well, it is not price fixing to say you don't discriminate. If you can't make a profit at a given price, you don't have to sell the drug in Canada or in any other place.

   But they have a lot of money to spend trying to sell that bill of goods to people. So we discovered--again, I think this was as a result of my history as a State attorney general--that we have a statute in the United States that prevents price discrimination. It is called the Robinson-Patman Act. It was passed in 1936. It was a sweeping antidiscrimination bill. It prevents price discrimination in the sale of any commodity in interstate commerce, with certain exceptions for actual cost savings from quantity sales and the like. So we said, fine, and the bill we introduced just said interstate and foreign commerce, with respect to prescription drugs.

   It is interesting; the drug companies paid no attention to that distinction at all, and they still use these millions of dollars to say it is price fixing. Well, if so, then we have fixed the price of every commodity in the United States for 64 years, which I think surprises most people who believe in and have benefited from the truly free economy in the United States.

   The argument that this is price fixing is fraudulent--purely and totally fraudulent. But I am not wedded or married to one solution to this problem of excessive prices imposed on American consumers for their prescription drugs because while we ban importation by law--by custom at least--we have permitted for an extended period of time American citizens to cross our borders--northern or southern or, for that matter, across the ocean to Europe--and to return to the United States with a 3-month supply of any prescription drug they are using, without being bothered by any of the governmental agencies of the United States. Both of my other Senate colleagues in this regard have pointed out that that happens in their State, and I have already pointed out that it happens in mine.

   So the Senator from Vermont and the Senator from North Dakota came up with the idea that if an individual can do it for himself or herself, why not let our pharmacists do it and bring these prescription drugs back to the United States, which are often manufactured in the United States and then shipped north

   or south of the border--bring them back and offer them for sale, presumably at a lower price.

   I am sure the Senator from Vermont doesn't mind my saying, in a sense, this solution is truly bizarre--that somehow or another it should be less expensive for a pharmacist to buy from a middleman than it should be from a manufacturer in the first place, and then have to ship the product across a national border twice in order to get the lower price. But the bizarre nature of the proposal is a simple and direct result of the outrageous discrimination that is practiced in the first place, and nothing else.

   So the Senator from Vermont has written a bill and proposed an amendment to allow the retail seller, or the wholesaler, to engage in this reimportation. But concerned as he and the FDA are about making sure you

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   OK, that is where we are at this point. And then, instead of simply opposing the proposal, my good friend from Mississippi puts up a second-degree amendment that says the Secretary has to certify to Congress that it would pose no risk to public health and safety and will result in a significant reduction in the cost. It is either absolutely unnecessary, because we are talking about something the Secretary has already done, and the price part of it is unnecessary because if there isn't a significant savings in the price, nobody is going to go up and buy them in the first place or it is an attempt--and I regret to say this--to kill the amendment of the Senator from Vermont in its entirety and see to it that it doesn't happen. The drug companies and their sponsors are not really wanting to justify the situation that exists in the United States today because it can't be justified, so they use an argument for safety that is already far more adequately covered by the amendment proposed by the Senator from Vermont in any event.

   Now we are able to deal with this issue as part of this appropriations bill, of course, because the House of Representatives did. So it is properly before us. But the other matter that I find extraordinarily odd with respect to the second-degree amendment is just this: The distinguished chairman of the subcommittee, the manager of the bill, knows perfectly well that individuals can go across our borders and come back with a 3-month supply of prescription drugs. If he and the Senator from Wisconsin are so concerned about safety that they have to pile on with a second-degree amendment, why aren't they banning totally and completely personal reimportation? The Senator from Vermont isn't even touching that subject in his amendment. I wish he did. The House of Representatives did. He is setting up a way for reimportation to take place at the wholesale level, where safety is far more protected than it is with respect to these individual purchases.

   But the individual purchases have not created a great problem. If they had, people would stop engaging in those policies. Whatever else we may say about Canadians, they are not in the business of poisoning their own citizens.

   This reimportation can take place with perfect safety under the amendment as proposed by the Senator from Vermont, and

   anything added to it is simply an attempt to kill it and to maintain the status quo.

   Let me go back to the stage I have set and simply say this: The status quo is American manufacturers using American taxpayers' money to produce products in the United States of America, which they then sell at prices that discriminate outrageously against American purchasers. That is really all there is on the stage today--discrimination by American companies against American purchasers, in spite of the support of American taxpayers.

   The first-degree amendment takes at least a modest step toward curing that situation. The second-degree amendment is designed to keep it in place forever.

   I have one final point, Mr. President. I agree with each of the Senators who have previously spoken on the desirability and the importance of a Medicare drug benefit. There is some debate over to whom it should apply, how much it should cost. But Medicare covers about 40 million Americans. We have 250 million Americans altogether. None of the rest of them will be helped at all by even the most generous Medicare drug benefit. All of them will be helped by this amendment, to the extent that it is actually effective, because it will in fact end up lowering the price of prescription drugs in the United States of America. That is why the first-degree amendment should be adopted and the second-degree amendment that attempts to gut it should be rejected.

   Mr. COCHRAN. Mr. President, I am pleased to announce to the Senate that we have been able to secure an agreement on a unanimous consent request to limit debate on the pending Cochran amendment and the underlying Jeffords amendment. I understand it has been cleared.

   I ask unanimous consent that the Senate proceed to vote in relation to the pending Cochran amendment, No. 3927, at 5 o'clock p.m., and the time between now and then be equally divided in the usual form. I further ask unanimous consent that following that vote, the Senate proceed to vote immediately in relation to amendment No. 3925, as amended, if amended, the Jeffords amendment.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   Mr. COCHRAN. I thank the Chair. I remind Senators that this doesn't mean we have to use all the time between now and 5. I encourage Members to make brief statements. We can vote before 5 and then move on to another subject.

   The PRESIDING OFFICER. The Senator from Vermont.

   Mr. JEFFORDS. Mr. President, I ask unanimous consent that Senator GREGG be added as cosponsor to amendment No. 3925.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   Who yields time?

   Mr. KENNEDY. Mr. President, will the Senator from Vermont be good enough to yield 12 minutes?

   Mr. JEFFORDS. Mr. President, I yield 12 minutes to the Senator from Massachusetts.

   The PRESIDING OFFICER. The Senator from Massachusetts is recognized for 12 minutes.

   Mr. KENNEDY. Mr. President, I support this amendment and I commend the sponsors for their efforts to address the high cost of prescription drugs.

   I support this amendment, and I commend its sponsors for their efforts to address the high cost of prescription drugs. The American public wants affordable medicines, and I believe we should do all we can to reduce the financial burden imposed on our citizens by high drug costs.

   It is worth emphasizing that imports of prescription drugs from other countries must be accompanied by strict precautions to protect the public. Federal standards require that all prescriptions sold in the United States must be safe and effective. The public health protections guaranteed by the Food, Drug, and Cosmetic Act do not end at the gates of the manufacturer's plant but extend all the way to the doorstep of the consumer. Congress has promised the American people that the medications they use will be effective and be free of contaminants.

   In 1988, President Reagan signed into law the Prescription Drug Marketing Act to protect Americans from counterfeit, contaminated, and other unsafe medications. Today counterfeit drugs continue to plague the citizens of many countries, including our own. In 2000, at least 30 people in Cambodia died from fake malaria medications. 60,000 people in Niger were vaccinated against a deadly epidemic of meningitis with counterfeit vaccines, and received water injections instead of real medicines. This past year the United Kingdom broke up a smuggling ring to import counterfeit drugs into the U.K. from India. According to a DEA official, 25% of the prescription drugs brought by consumers into the U.S. from Mexico are fake. From 1989 to 1994 a counterfeit antibiotic from China was sold in the U.S. through legal distribution channels resulting in almost 2,000 adverse events, including 49 deaths. In spite of an Import Alert issued by the FDA in September 1999, the fake medication may still be entering the U.S.

   I raise these problems to emphasize that without adequate protections, legalizing importation by pharmacists and wholesalers will increase the risks already posed by fake and contaminated drugs. This amendment deals with these safety concerns primarily by placing the responsibility for assuring the quality of imported products on the importer, subject to FDA oversight--and it gives FDA broad authority to impose additional requirements necessary to protect public health.

   The FDA needs adequate tools to combat counterfeit or adulterated drugs. Adequate funding for the FDA is essential to ensure the safety of imported prescription drugs. FDA currently inspects less than 1% of all drug shipments from other countries. Clearly, additional resources will be necessary to implement this amendment.

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   As we all know, the real issue is providing an effective and affordable prescription drug benefit to senior citizens and the disabled under Medicare.

   That is the basic and fundamental issue. We wouldn't be having this debate if we were providing an effective prescription drug program to the seniors under the Medicare program. It wouldn't be necessary. We wouldn't have to be taking these additional risks. This is not a substitute for the Senate taking action on that important measure.

   The President has reiterated the fact that he would be glad in working with our Republican friends to sign their marriage penalty legislation if it included a prescription drug program. It is absolutely essential. This legislation is no substitute for it.

   The cost of the drugs these patients needed far exceeded their ability to pay, even if the cost was deeply discounted. A patient with high blood pressure, irregular heartbeat, and an enlarged prostate would pay $3,100 annually for drugs.

   This particular chart indicates the general patient profile for some of the most common kinds of concerns, particularly for the elderly. They are the ones who have the highest utilization of the prescription drugs. They are the ones who need the protections under Medicare. They are the ones who, hopefully, we are going to take action on in this Congress to protect.

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