Senator Byron Dorgan's Senate speech on parallel importing legislation

[James Love <love@cptech.org>]

Here is Senator Byron Dorgan's Senate speech on his new
parallel importing legislation.  This is from the Congressional 
Record. 

 Jamie

[[Page S6793]]


      By Mr. DORGAN (for himself, Mr. Wellstone, Ms. Snowe, and Mr. 
        Johnson):
  S. 1191. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
provide for facilitating the importation into the United States of 
certain drugs that have been approved by the Food and Drug 
Administration, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.


               INTERNATIONAL PRESCRIPTION DRUG PARITY ACT

  Mr. DORGAN. Mr. President, I rise to introduce a piece of legislation 
on behalf of myself, Mr. Wellstone, Ms. Snowe, and Mr. Johnson. These 
three Senators, and I hope others as well, have joined me in 
introducing this bill, the International Prescription Drug Parity Act, 
today.
  This piece of legislation deals with the question of prescription 
drugs. By consent of the Chair, I would like to show on the floor of 
the Senate today examples of the issue that is addressed by this piece 
of legislation.
  With your consent, I will show two bottles of the drug Claritin, a 
medication most people are familiar with. Claritin is a popular anti-
allergy drug. These two bottles contain the same pills, produced by the 
same company, in the same strength, in the same quantity. One 
difference: a big difference in price. This bottle is purchased in the 
United States--in North Dakota, to be exact. This bottle of 10

[[Page S6794]]

milligram, 100 tablets cost North Dakotans $218, wholesale price. This 
bottle--same drug, same company, same strength, same quantity--was 
purchased in Canada. They didn't pay $218 in Canada; they paid $61. Why 
the difference for the same drug, same dosage, same quantity, same 
company? In Canada, it costs $61; U.S. consumers pay $218.
  Here is another example--and I have a lot of examples. But with the 
consent of the Chair, I will only use two today.
  This is Cipro, a prescription drug to treat infections. Both bottles 
are made by the same company. We have the same number of pills, 500 
milligram, 100 tablets--same drug, same company, same pill. In North 
Dakota, the wholesale price for this bottle is $399; in Canada, it is 
$171. The North Dakotan pays--or the U.S. consumer pays because this is 
true all over our country--$399, or 233 percent more than for the same 
drug in Canada. The question is, Why? The question is, With a global 
economy, why would a pharmacist simply not drive up to Canada and buy 
the same drugs and offer them for a lower price to their customers? The 
answer to that is, there is a law that restricts the importation of 
drugs into this country, except by the manufacturers of the drug 
themselves. That is kind of a sweetheart law, it seems to me. We want 
to change that.
  If the manufacturer that produces these pills has been inspected by 
the Food and Drug Administration and the same drugs are marketed 
everywhere, why on Earth, in a global economy, cannot our consumers 
access a lesser price? Incidentally, this pricing inequity does not 
just exist with Canada; it is the same with Mexico, Germany, France, 
Italy, England, Germany--you name it. It is true around the world. We 
pay a much higher price for most prescription drugs than consumers 
anywhere else in the world. The United States is the consumer that pays 
a much higher price for the same pill, in the same bottle, produced by 
the same manufacturer.
  With our bill we say, let's decide that what is good for the goose is 
good for the gander. If the pharmaceutical companies can access the raw 
materials which they use to produce their medicine from all around the 
world and produce a pill and put it in a bottle, it seems to me that 
the customer here in the United States ought to also benefit from free 
trade, as long as the drug is FDA approved and comes from a plant that 
is inspected by the FDA.
  The drug industry will say that safety is an issue. It is no issue 
with respect to my bill. Safety is not an issue here at all. I am 
saying--and my colleagues are as well--if medicine approved by the FDA 
and produced in a plant inspected by the FDA is to be marketed around 
the world, but the American is to pay the highest price--in some cases 
by multiples of four and five --let us use the global economy to let 
U.S. pharmacists and prescription drug distributors access that 
medicine wherever it exists at a lower price, and pass along those 
savings to American consumers.
  Back in 1991, the General Accounting Office studied 121 drugs and 
found that, on average, prescription drugs in the United States are 
priced 34 percent higher than the exact same products in Canada. I just 
did a comparison of the retail prices on both sides of the border of 12 
of the most prescribed drugs, and discovered that, on average, U.S. 
prices exceeded the Canadian prices by 205 percent.
  I mentioned before that Claritin costs the American consumer 358 
percent more. We American consumers pay 358 percent more than the 
consumer does north of the border. And incidentally, the Canadian 
prices have been adjusted to U.S. dollars. Does this make sense? Of 
course not. Studies show that the same drug that costs $1 in our 
country costs 71 cents in Germany, 65 cents in the United Kingdom, 57 
cents in France, and 51 cents in Italy. All we are saying is that if 
this global economy is good for companies that produce the drugs, it 
ought to be good for the consumer.
  In 1997, the top 10 pharmaceutical companies had an average profit 
margin of 28 percent. The Wall Street Journal reported that profit 
margins in the drug industry are the ``envy of the corporate world.'' 
The manufacturers produce wonderful medicines, and I am all for it. But 
I want them at an affordable price for the American consumer. I am flat 
sick and tired of the American consumer being the consumer of last 
resort who pays a much higher price than anybody else in the world for 
the same drug, in the same bottle, produced by the same company. It 
doesn't make sense.
  Mr. President, how much time have I consumed?
  The PRESIDING OFFICER. The Senator has consumed 7 minutes.
  Mr. DORGAN. Let me go for another minute, and then I will yield to my 
colleague from Minnesota, who will have 7 minutes remaining on the 15 
minutes.
  As I have indicated, Senator Johnson from South Dakota and Senator 
Snowe from Maine are also cosponsors. We expect other cosponsors to 
join us. Frankly, the reason we have introduced this legislation is 
that there is an unfair pricing practice that exists with respect to 
prescription drugs in this country. It is fundamentally unfair for a 
pharmaceutical manufacturer to say that we will produce a drug, and, by 
the way, when we decide to sell it we will sell it all around the 
world, but we will choose to sell it to the American consumer at a much 
higher price than any other customer in the world.

  That is unfair to the American consumer.
  What prevents the local corner pharmacist from going elsewhere to buy 
these prescription drugs in France or in Canada or elsewhere? A law 
that says you can't import a drug into this country unless it is 
imported by the manufacturer. What a ridiculous piece of legislation 
that was passed over a decade ago.
  If this global economy works, let's make it work for the consumers 
and not just for the big companies.
  Our legislation only pertains to this circumstance: If the drug has 
been approved by the FDA and the facility where that drug is bought are 
inspected by the FDA, then those drugs have a right to come into this 
country not just by the manufacturer but by local pharmacists and 
distributors who want to access that drug at a less expensive price in 
other parts of the world and pass along the savings to American 
consumers. That makes good sense to me.
  I have a lot more to say, but I will say it at a later time. I yield 
my remaining time to my colleague, Senator Wellstone from Minnesota, 
who is joined by Senator Johnson of South Dakota and Senator Snowe of 
Maine as cosponsors of this legislation.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, let me first of all say to my colleague 
from North Dakota that I am really pleased to join him in this effort, 
along with Senator Snowe and Senator Johnson.
  The International Prescription Drug Parity Act makes prescription 
drugs more affordable for millions of Americans by applying the 
principles of free trade and competition.
  I want to give special thanks to a wonderful grassroots citizen 
organization from Minnesota called the Minnesota Senior Federation. If 
we had organizations such as this all around the country, we would have 
such effective citizen politics, and I guarantee we would be passing 
legislation that would make an enormous positive difference in the 
lives of the people in our country.
  This legislation provides relief from price gouging of American 
consumers by our own pharmaceutical industry. Those who really pay the 
price are those who are chronically ill. Many of those who are 
clinically ill are the elderly. It is not uncommon anywhere in our 
country to run across an elderly couple or single individual who is 
paying up to 30, 40, or 50 percent of their monthly budget just for 
prescription drug costs.
  In my State of Minnesota, only 35 percent of senior citizens have any 
prescription drug cost coverage at all.
  This legislation is very simple. I say to Senator Dorgan that what I 
liked the best about this legislation, and the reason I think it will 
command widespread support, is its eloquent simplicity.
  We are just saying that if you have drugs which are FDA approved and 
manufactured in our country, and now they are in Canada, for example, 
and cost half of what they cost senior citizens to pay for that drug in 
our own country, it shouldn't just be the pharmaceutical companies that 
can bring

[[Page S6795]]

those drugs back in. You ought to enable pharmacists or distributors to 
go to Canada and purchase these drugs which have been FDA approved, and 
then bring them back to our country and sell these drugs at a discount 
rate for our citizens in our country.
  This is the best of competition. This is the best of what we mean by 
free trade.
  I want to be clear. This legislation will amend the Food, Drug and 
Cosmetic Act. The FDA Commissioner was in Minnesota 2 weeks ago and 
senior citizens were pressing her on this question. She was cautious. 
But what she was saying was that we would need some legislation; we 
would need some change to be able to do what Senator Dorgan is talking 
about. We would amend this piece of legislation to allow American 
pharmacists and distributors to import prescription drugs into the 
United States as long as these drugs meet strict FDA standards. That is 
it. The FDA isn't directly involved, but the FDA is critically involved 
in the sense that these drugs have to meet all the FDA standards.
  This piece of legislation is simple. It is straightforward. It is 
very proconsumer, very pro-senior citizen, very procompetition, very 
pro-free trade. As I think about the gatherings that I go to in my 
State--I bet this applies to New Jersey, I see Senator Torricelli here, 
and Senator Reed of Rhode Island--anywhere in the country. You can't go 
to a community meeting, and you can't go in into a cafe and meet with 
people without having people talk about the price of prescription 
drugs. It is just prohibitively expensive. This piece of legislation 
will make an enormous difference.
  It could be that there is some opposition to this piece of 
legislation. I can see some vested economic interests who may figure 
out reasons to be opposed to it, but I will say that this piece of 
legislation would go a long way in dealing with the problem of price 
gouging right now and making sure that these prescription drugs that 
can be so important to the health of senior citizens, the people in the 
disabilities community and other citizens as well that they will be 
able to purchase these drugs, and they will be able to afford these 
drugs, which can make an enormous difference in improving the quality 
of their health.
  I introduce this legislation, along with Senator Dorgan, and we are 
joined by Senator Johnson and Senator Snowe. I believe we will have 
strong bipartisan support for this bill.
  Mr. President, how much time do we have left?
  The PRESIDING OFFICER. The Senators have a total of 9 minutes 54 
seconds.
  Mr. DORGAN. Mr. President, if I might just make a comment to the 
Senator from Minnesota, all of us have the experience of going around 
our States and talking to especially senior citizens, who take a 
substantial amount of prescription drugs--many of them wonderful, 
lifesaving drugs but at a substantial cost. Many of them have no health 
insurance coverage for these costs.
  Let me say at the outset, lest anyone think I don't appreciate what 
goes on, that the research done at the Federal level and the research 
done by the pharmaceutical companies have produced lifesaving, 
remarkable medicines. I commend all of those folks for that, including 
these companies. I am only debating the price issue here.
  I ran into a woman one day. She was in her eighties. She had heart 
disease, diabetes, and was living on somewhere around $400 a month of 
total income. She said to me: Mr. Senator, I can't afford to take the 
drugs the doctor says I must take for my heart difficulties and for my 
diabetes. What I do is buy the drugs, and then I cut the pills in half 
and take half of the dose so it lasts twice as long. It is the only 
way. Even then I can hardly afford to pay for food.
  That is what the problem is here. The problem is that these 
pharmaceutical drugs are overpriced relative to what every other 
consumer in the rest of the world is paying for them. I am talking of 
other consumers in France, in Germany, Italy, England, Canada, and 
Mexico--you name it. That doesn't make any sense to me. Why should our 
senior citizens--all consumers for that matter--be paying 300-percent 
more for the same drug in virtually the same bottle produced by the 
same company inspected by the FDA than a consumer 20 miles north in 
Canada is paying?
  I just came from a meeting near the border of North Dakota and 
Canada. I was talking to people, again, about that disparity. The 
Senator from Minnesota has exactly the same situation.
  The pharmacists at the corner drugstore are saying: Why can't I go up 
there and buy some of these medications? I know that it is the same 
pill which comes from the same plant.
  The reason is the law prevents him from bringing it back, and we want 
to change that.
  Mr. WELLSTONE. Mr. President, I say to my colleagues, when we talk 
about citizens becoming frustrated and sometimes angry, either two 
things are going on.
  First of all, you can find people to talk to everywhere, especially 
senior citizens who are paying 30, 40, or 50 percent of their monthly 
budget just for these costs. They cut the pill in half and take only 
half of what they need, or they cut down on food. It is drugs versus 
food, or versus something else. They should not be faced with those 
choices.
  But what adds insult to injury is to then know that the same drug 
manufactured quite often in the same place with the same FDA approval 
purchased in Canada costs half the price.
  We are simply saying let our pharmacists and let our distributors in 
our country be able to purchase those prescription drugs in Canada and 
bring them back and sell them at a discount to our consumers. That is 
what this legislation says.
  If you want to talk about a piece of legislation that speaks to the 
interests and circumstances of people's lives, I think this legislation 
will make an enormous difference.
  I am prepared to fight very hard to make sure that we pass this 
legislation.
-- 
James Love, Director, Consumer Project on Technology
I can be reached at love@cptech.org, by telephone 202.387.8030,
by fax at 202.234.5176. CPT web page is http://www.cptech.org