Federal News Service
HEADLINE: PRESS CONFERENCE ON PRESCRIPTION DRUG REIMPORTATION
SPEAKERS: SENATOR BYRON L. DORGAN (D-ND); SENATOR EDWARD M. KENNEDY (D-MA); SENATOR JOHN MCCAIN (R-AZ); SENATOR OLYMPIA J. SNOWE (R-ME); SENATOR DEBBIE STABENOW (D-MI)
LOCATION: SENATE RADIO/TV GALLERY, THE CAPITOL WASHINGTON, D.C.
SEN. DORGAN: Ladies and gentlemen, we will begin.
Over recent weeks a number of us, a bipartisan group of senators, have worked to develop a new bill, a nucleus of legislation dealing with the reimportation of prescription drugs. And the reason this is important, we've obviously been dealing with this question of the price of drugs and the reimportation in order to put downward pressure on prices for some long while. And as you know, the Senate has passed a bill, the House has passed a bill, they have not been implemented by the HHS of the previous administration or this administration. And so, despite our best intentions, we really do not yet have a system in place for the reimportation of lower-priced prescription drugs.
The point of this effort is this. We pay here in the United States the highest prices in the world for prescription drugs, by far. We believe it's unfair. We believe there are price controls in the United States; those price controls are simply imposed by the pharmaceutical industry. We believe that allowing for the reimportation of safe drugs-that is, FDA-approved drugs produced in an FBA-approved plant-would put downward pressure on prescription drug prices.
This is an awfully good example. I've used it before. This is Lipitor. I believe it is the best-selling drug in the United States. As you can see, there are two bottles here. It's the same pill put in the same bottle, the same shape, even, made in the same plant, but sent to two different places.
SEN. SNOWE: (In progress) -- one's medical history, verifying the prescriptions, and also tracking the shipment requirements. For those who echo the concerns that, you know, somehow that we have to improve the regulation of wholesalers, you know, again, we agree that this legislation become a model for domestic safety reform where the preponderance of counterfeiting has occurred right within our borders.
And finally, we're saying that we have created a pedigree, a chain of custody, you know, for wholesalers who import drugs so that we would be able to have records, detailed records of shipping and labeling requirements, that the FDA will have to regularly inspect their facilities without notification at least once every three weeks. And this is a system that can also be used for domestic manufacturers as well.
So in the final analysis, I think we're exactly what the FDA would want. In fact, when I asked Dr. McClellan this question recently at a hearing, I gave him the outline of the initiative, and he indicated that that's a model we could work with. And so this legislation has become both safe and effective.
SEN. DORGAN: Senator Snowe, thank you very much.
SEN. KENNEDY: Thank you.
First of all, I want to congratulate Senator Dorgan, Senator Snowe, my colleague Debbie Stabenow, Senator McCain and Tom Daschle for-and our other co-sponsors for bringing us all together in a bipartisan way to deal with one of the issues of central concern to families all across this country.
This issue is about fairness for middle-class Americans who are struggling to afford costly prescription drugs. Americans understand fairness, and they know it's wrong that Americans pay far too much for prescription drugs-more than the Canadians, more than the British, more than any other country in the world-and that is wrong.
Prescription drugs mean the difference between sickness and health, even life and death, for millions of average Americans. And it's not fair that drug companies overcharge middle-class families and patients that-and deprive them-for the drugs that they need.
We're here to say that help is on the way. Our legislation will legalize safe imports of U.S.-approved drugs manufactured in U.S.- approved plants. It's a creative new approach to meeting the needs of our middle-class families.
We know it'll be opposed by the drug companies. It'll be opposed by the Bush administration. But it'll be welcomed by someone else: by every family in every community in America who needs to fill a prescription.
Every pharmaceutical company in the world wants its drugs approved for sale in the United States. We're the largest market on Earth. A decision by the Food and Drug Administration that a drug is safe and effective is the gold standard for the world.
But once that drug is approved for use in the United States, the drug manufacturer applies a greedy double standard. What's fair about a system that forces American patients to pay 60 percent more than the British pay or the Swiss pay for an FDA-approved drug manufactured to FDA standards? What's fair when, on average, Americans pay two-thirds more than the Canadians, as you see in this chart over here. What's fair when Americans pay 80 percent more than the Germans and twice as much more than the Italians?
This legislation will end that indefensible disparity by enabling U.S. consumers to buy FDA-approved drugs at the same fair prices as they are sold abroad.
The drug companies and the Bush administration claim that important drug-imported drugs threaten the health of American consumers because of the possibility of counterfeiting and adulteration. Under this bill, that argument cannot pass the laugh test.
One-quarter of the drugs that Americans use today are already legally imported into the United States. The American people have no idea how large a percentage of the pills they take are outsourced, produced for U.S. drug-makers in plants overseas where wages are cheaper.
The catch is that the law allows that. Drugs can be legally imported by the drug companies themselves, who then sell them at a high U.S. price. If drug companies can import drugs at high prices, why can't patients import them at fair prices?
Our legislation sets up an ironclad safety procedure to guarantee that every drug imported legally into the United States is the same FDA-approved drug that was originally manufactured in an FDA-approved plant, whether the drug is manufactured abroad or shipped to the United States, or whether it's manufactured in the United States and shipped abroad and then imported back into the United States.
No doubt, in the months ahead as the election approaches and the political pressure builds, drug companies and their allies in the administration and Congress will offer an alternative program. They'll call it a reimportation program. But consumers beware. Counterfeit drugs have no place in American medicine cabinets, and counterfeit proposals to reduce drug prices have no place in Congress.
Year in and year out, the drug company profits are the highest of any industry in the United States. Year in and year out, patients are denied the life-saving drugs they need because the astronomical profits are obtained by equally astronomical prices, prices that drug companies can't charge anywhere else in the world because no other country in the world will tolerate such high prices. It's time for basic fairness, and it's time to pass this bill.
SEN. DORGAN: Senator Kennedy, thank you very much.
SEN. MCCAIN: I'd like to thank all of my colleagues and the co- sponsors, including Senator Lott, who have joined together in behalf of this legislation.
There's over 43 million uninsured Americans, and millions more seniors without a substantial prescription drug benefit. One of the great hoaxes in American history was perpetrated on the seniors recently when we passed a prescription drug Medicare proposal that was supposed to be $400 billion, and we now know at least $534 billion, and it will be much higher than that because of the skyrocketing cost of prescription drugs.
There's two provisions in that bill I'd like to just mention very briefly which show the overwhelming power of the pharmaceutical companies. One, of course, was the ban on reimportation, and the other was the prohibition for Medicare negotiating lower drug prices with the pharmaceutical companies. Remarkable. The Veterans Administration negotiates all the time and brags about the hundreds of millions of dollars a year they save veterans on the cost of prescription drugs.
Last night, thousands of seniors in my state and millions of seniors all over America went to bed making a choice between eating or taking a prescription drug. They couldn't afford both. This morning in Arizona, seniors have gotten on buses to drive to Mexico-not to Canada, to Mexico-to buy prescription drugs which they otherwise could not afford. Obviously, that is not a safe practice and I don't recommend it. But, gosh, seniors in my state don't have a choice.
I believe that this legislation is must-pass, I believe that we need to force a vote on it as quickly as possible, and I believe that we can show once again that the pharmaceutical companies can't dictate the legislative agenda around here forever.
SEN. DORGAN: Senator McCain, thank you very much.
SEN. STABENOW: This is a very important day, and I congratulate all of my colleagues for their leadership. For those of us who have worked on this issue for years, this is a major breakthrough and a coming together in a bipartisan way with a piece of legislation that addresses every legitimate issue that has been raised regarding safety, and it's a legislative effort that will work.
I was very pleased a couple of months ago on the Budget Committee to author an amendment. It was the only Democratic amendment that passed. It was a strong bipartisan vote regarding reimportation, to authorize reimportation as part of the budget resolution that passed the Senate. That was a very important sign for us that we had the support to move ahead.
This legislation addresses not only the number one issue for our seniors, but it's the fastest-growing part of the health care increases that businesses are seeing and that every family is seeing. When we look at prescription drugs and you look at the health care dollar and the amount of increases in health care premiums, the majority of that is because of the pricing of prescription drugs. So this has broad implications.
I not only believe that this is one of the great moral issues of our time, but it is one of the most important ways that we tackle the cost of health care for everyone. I have had-because we are only five minutes across a bridge, from Detroit to Windsor, Canada. And I've had businesses; I've had, of course, seniors; I've had university presidents approach me that have medical schools and clinics, saying to me: Why can't we do business with our neighbors across the bridge?
And at a time when we are seeing skyrocketing prices and dwindling resources in the public sector, as well as the pressure on those in business, this is the time for us to be able to allow the one part of trade that is not allowed now under NAFTA, which is opening the borders to allow licensed pharmacists in America to do business with licensed pharmacists and wholesalers in Canada, and as well as in other countries that we trade and do business with every day.
At the end of the day and at the end of the session, I believe this will be one of the most important things that we do to improve the quality of life of every American and to allow us to reduce costs and the pressures on health care in this country.
SEN. DORGAN: Thank you very much.
Let me again emphasize that Senator Lott and Senator Daschle are original co-sponsors. While they weren't able to be with us at this press conference, their assistance is very much appreciated, and it describes, I think, the broad support in the United States Senate for this approach.
And we'd be happy to answer any of your questions.
Q Senator Stabenow, Pfizer is located in your state. And part of this plan seems a little convoluted to me. Why not-many of these drugs are developed by-with government money that's gone into this. Why not say to the drug companies, as one of the senators said a minute ago, we're not going to have the drug companies push us around anymore. Why not say-why force us to go and reimport the drugs, why not just bring down the cost on the drugs that are here and manufactured here in the United States? Isn't this just going around the block --
SEN. STABENOW: Well, that's an important question to ask the industry. And we're very proud of the research that they do. I'm very proud of the research that they do in Michigan. You're right, we do in fact provide government funding for basic research that is given to the companies free of charge to then develop drugs. We give tax credits and deductions. So we as taxpayers help subsidize. We have patents so that they can recover their costs before they have to go and compete on the open market. And all we ask for is that folks can afford the medicine at the end of the line.
But for us, we are in this legislation using the market forces of competition to do that, rather than what you're talking about in terms of regulating directly the price. This is a free market, open competition approach that relies on trade, that relies on market competition to bring the price down, and we believe it will work.
SEN. DORGAN: Our goal is to put downward pressure on prices. And the Lipitor bottle that I held up isn't a U.S. drug, it was produced in Ireland, sent to two places, just charged a much higher price to the American consumer than to the Canadian consumer. And that's what we believe is unfair.
Q Senator, what-is there any cost associated with your plan? And furthermore, is there anything in the legislation that prevents the drug companies that they choose to charge Canada more, thereby making up the loss that they would make --
SEN. DORGAN: One of the unique pieces in this legislation is something that would get the Federal Trade Commission involved, and be able to charge restraint of trade against companies who would try to manipulate supply or price to the Canadians in a way to prevent reimportation into the United States. So those actions would be considered restraint of trade if they tried to manipulate supply or price. But-what was the second part?
Q Is there a cost in that?
SEN. DORGAN: This piece of legislation authorizes up to a 1 percent fee triggered by the Health and Human Services and FDA to recover the costs that they will exhibit in order to be engaged in inspecting and licensing these transactions. So-and that would be the only fee or the only cost.
Q Fee on who?
SEN. DORGAN: On the-on those who would import into this country. There would be a fee of up to-no greater than 1 percent with respect to the value of the import. And the reason for that is, that would accumulate the resources necessary for the FDA to hire the inspectors, because there will be necessary increased inspections of the sources of those drugs from Canada.
Q So from the wholesalers-the wholesalers and pharmacies who want to participate --
SEN. DORGAN: Yes.
Q-would pay for these charges? And 1 percent, you're thinking that would offset the cost to the government?
SEN. DORGAN: They would pay a 1 percent fee --
SEN. SNOWE: Of the total value.
SEN. DORGAN: -- of the total value, yes.
Q Senator Dorgan, how does this bill different from the bill that was introduced just recently by Senator Grassley, and why wasn't he-if this is a bipartisan effort, why wasn't he brought into play here?
SEN. DORGAN: We invited Senator Grassley to be a part of this effort. I might perhaps call on Senator Kennedy. I think they had some earlier discussions. But we did invite Senator Grassley to be a part of this effort.
SEN. KENNEDY: I think there's a-we'd certainly welcome Senator Grassley. There appeared to be in the wake of the bill that passed last year a number of members, Republicans and Democrats alike, a number of them that are here now that we're going to try and find-we're moving on this issue. And we had decided under the leadership of Senator Dorgan and Snowe to bring all of this together, all of these efforts together. And that's what we have tried to do. And we certainly would welcome the efforts of Senator Grassley.
There are two very important differences with the Grassley provision.
One is the provisions which have been carefully drafted in here to prevent the cirucmvision of the legislation by the drug companies to be able to send effectively the same bill-drug overseas and circumvent this legislation to the nations around the world, that's very, very important. Senator Dorgan addressed how we're going to avoid circumventing this legislation. The provisions that we have included in that were included in the bill and are very important because otherwise I think the bill can be undermined.
And secondly, there are additional kinds of protections in here in terms of safety. He has good safety, we have protections. But we have both, with regards to the Internet and also the importation protections, which I think are more extensive.
I don't question that Senator Grassley may support both of those provisions, but those are distinguishable from what Senator Grassley had advanced. But I think his bill is certainly on the right path, and we'll reach out to him and certainly welcome his involvement. It will be very important to have his help.
SEN. DORGAN: Let me just say --
SEN. STABENOW: I wanted --
SEN. DORGAN: Go ahead, yeah.
SEN. STABENOW: -- to mention one thing, and that is Senator Grassley did vote for my amendment in the Budget Committee and did speak to that, and so he certainly has been supportive of bipartisan efforts.
SEN. DORGAN: You know, frankly I'm very encouraged by Senator Grassley's interest in this issue, as I am about all senators who are interested. But it's just impossible to have 39 different bills out there, and so a group of us, Republicans and Democrats, decided to see could we put together a core bill that represents the philosophy and the practical approaches that will actually allow this to happen. And we will certainly-we already have invited Senator Grassley to work with us and be a part of this, and we will certainly reach out to other senators as well.
SEN. SNOWE: And I think Senator Lott's support of this, like I said, is an indication of the types of issues that we have addressed in this legislation concerning safety. And I think-again, I think it underscores the ability to begin to bring people together.
Q Senator Frist said he hoped to work this legislation through the health committee. Will you tell us about your discussions with Senator Gregg?
SEN. DORGAN: Perhaps, Senator Snowe, would you-or Senator Kennedy, either one.
SEN. KENNEDY: I have not talked with Senator Gregg about it. I suspect there would be strong bipartisan support for the legislation. We'd certainly hope to work out with the-our committee to do that. We have in our committee had similar provisions, for example on the PDUFA, which was the tax provisions for the FDA for fast-tracking prescription drugs, and we did it with the medical device legislation. And we've-that is the similar way that we have done the enforcement on this particular provision.
So the concept about getting the funds and getting it to the FDA, which is used to this kind of regime, is well tried, well tested, and been very successful.
So I think we-which has been the principal issue in terms of the safety issue-have been the principal issues, and how to deal both with the Internet and the general importation. And we've had similar kinds of issues on the other issues as well. So I would hope we have, but I have not spoken to Senator Gregg, intend to do so.
SEN. SNOWE: Yeah. And also, during the course of all these negotiations and discussions of the last four months, our staff had been meeting with Senator Gregg's staff as well, to talk through a number of issues that it had been working on. Hopefully we can continue to work through those issues, in the final analysis, in terms of when we could-able to consider this legislation before the Health Committee as well. So those have been ongoing discussions.
SEN. DORGAN: Can I-you mentioned Senator Frist. Let me just say that, you know, we had a hold on Dr. McClennan's (sic) nomination, and as that hold was lifted, Senator Frist, in discussions on the floor of the Senate that lasted some long while, indicated that he believes that the ground has shifted, he believes that the Senate will pass legislation on reimportation. It will not be legislation that just says "reimportation" but that actually accomplishes it. And he indicated that he would be working with us to find the time and a way to do that.
And we will reach out to Senator Gregg. As we've indicated, the staffs have been talking as well with Senator Gregg and Senator Grassley and others.
Q Senators --
SEN. KENNEDY: Could I add just one other point to this? We have also been in touch with the House, with Congressman Gutknecht and Rahm Emanuel, who had introduced the House legislation. We're very hopeful that we'll have their support and that there will be similar legislation introduced in the House as well, and it'll have the kind of broad support that we have here.
So this-we've been-many of us have been involved in a lot of initiatives around this place for a long period of time. But this one has a lot of horsepower and a lot of firepower behind it, in terms of the membership that are support of it, and most importantly, it has the support from our senior citizens, who are desperately in need of it. And it's one that is not going to go away. We don't intend to let it go away, and we are committed to getting action on it in this Congress.
Q Senators, as you know, the American population is almost 10 times larger than that of Canada, and Canadian officials are already expressing some concern about shortages if reimportations suddenly go up. How do you ensure that you're not exporting your problems as much as you're importing Canada's solution?
SEN. DORGAN: Our goal is not necessarily to require in the long term that medicine be purchased from Canada. Our goal is that if you open up the market, the market system will actually lower prices in the United States. That's our goal. But we also have a provision in here that will deal with the restraint of trade if companies engage in that.
Thank you very much.
SEN. SNOWE: Thank you.
SEN. KENNEDY: Thanks.