Mr. Speaker, the gentleman from Minnesota (Mr. Gutknecht), the gentleman from Maine (Mr. Allen), the gentleman from Vermont (Mr. Sanders), and the gentlewoman from California (Ms. Watson) and myself are going to be talking this hour about…
Mr. Speaker, the gentleman from Minnesota (Mr. Gutknecht), the gentleman from Maine (Mr. Allen), the gentleman from Vermont (Mr. Sanders), and the gentlewoman from California (Ms. Watson) and myself are going to be talking this hour about the problems that we have in this country with exorbitant pharmaceutical prices.
We all believe in the free enterprise system, and we believe that private industry ought to make a profit, but we also believe the American people ought to get the best bang for their buck. Unfortunately, the pharmaceutical industry has been taking advantage of Americans for a long, long time, and it is just now becoming evident.
The gentleman from Minnesota (Mr. Gutknecht) made this chart up originally, and this chart, I know it is difficult for my colleagues to see, but it shows the disparity between pharmaceutical products purchased in the United States and those purchased in Canada. In some cases, products, pharmaceutical products manufactured here in the United States that are sold in other parts of the world, sell for one- tenth the price that they sell for here in the United States; and yet the American people, when they try to buy those products abroad through the
Internet, are being criticized for that, and the Food and Drug Administration, hiding behind the veil of protecting the public from products that might harm them, are saying that they are not going to allow these Internet sites to sell these products. The very same products sold here in the United States, they are not allowing them to be purchased from Canada or other countries so the American consumer can save as much as 50 percent of their pharmaceutical costs.
I have a constituent who was paying $1,300 a month or $1,200 a month for pharmaceutical products, and he bought the very same products on the Internet from Canada for less than half that amount, so he was saving $7,000 a year by purchasing them from Canada. And now the FDA, along with the pharmaceutical companies, are trying to stop him from doing that.
We have over a million people in this country, probably closer to 2 million, who are buying their pharmaceutical products from Canada over the Internet. But the pharmaceutical companies and the FDA are trying to stop the American people from saving money and getting the products at a fair market price.
Today, in the New York Times there is an article, and I do not quote from the New York Times very often, but there is an article talking about the exorbitant amount of money that the pharmaceutical industry is going to be spending over the next year to influence Congress, State legislators, government agencies and so forth to keep the prices of pharmaceutical products very high in the United States and prohibit the importation or reimportation of their products from other countries where they are selling them much cheaper.
In 1990, PhRMA spent $2.3 million in that cycle here in Washington and around the country. In 1992, it more than doubled to $4.9 million. In 1994, it went to $5.2 million; and in 1996 it went to $9.2 million. In the year 2000, it jumped up to almost $20 million, and it was over $20 million in the year 2002.
Let me read what was in the New York Times today. ``Lobbyists for the drug industry are stepping up spending to influence Congress, the States and even foreign governments as the debate intensifies over how to provide prescription drugs benefits to the elderly, industry executives say.''
The article goes on to say, ``The documents show that the trade association, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, will spend at least $150 million this year. That represents an increase of their total budget of 23 percent over last year which was $121.7 million. Directors of the trade association approved the new budget, together with an increase in membership dues, to pay for an expanded lobbying campaign at a meeting last week. They have over 600 lobbyists in Washington, D.C.''
Here is what they say: ``Unless we achieve enactment this year of market-based Medicare drug coverage for seniors, the industry's vulnerability will increase in the remainder of 2003 and in the 2004 election year,'' and it will demonize the industry if they do not get this done.
Now, we are for market-based pricing. The gentleman from Minnesota (Mr. Gutknecht) has said that many, many times. But that should be across the spectrum, not just here in the United States of America. I mean, in Canada if you can buy a product for $70, why should it cost $122 here in the United States right across the border, just a mile apart? And the reason is they are charging an exorbitant amount of money to the Americans, and they are loading the research and development and everything else on the back of American consumers instead of spreading it across the world.
If they are talking about market-based drug coverage for seniors, then the burden should be spread equally across the spectrum, not just here in the United States but across Canada and Europe. If we did that, the price for all Americans would go down dramatically.
The drug trade group plans to spend $1 million for an intellectual echo chamber of economists, a standing network of economists and thought-leaders, to speak against Federal price control regulations through articles and testimony, and to serve as a rapid-response team. A rapid-response team, that sounds like a military action. Well, we want to make sure that we do not have to have price controls.
If we had fair pricing across the spectrum, around the world, then I think the Americans would get a fair price when they buy their products. But unfortunately, the products are a lot lower in other countries, in Europe, in Germany, in France, in Spain, in Canada, in Mexico; much, much less than they are here. Yet they want to keep those prices higher here in the United States so they can keep their profits high.
The trade association and its tactics have become an issue. In debate on the floor of the Senate last summer, Senator Durbin, Democrat of Illinois, said PhRMA, this lobby has a death grip on Congress. After seeing what I have seen over the past month, month and a half, I am not so sure he is wrong. The influence that the pharmaceutical industry has in the halls of Congress and in the executive branch mystifies me. We are supposed to be sent here to represent the people of this country, to make sure they get a fair shake across the board. Yet the pharmaceutical industry has been loading huge, huge profits on the backs of the American people while making much smaller profits right across the border in Canada by selling their products at a more competitive rate.
If Americans try to buy them up there now, now they are trying to stop them. The day after the pharmaceutical giant GlaxoSmithKline said they were going to pull out of Canadian pharmacies that were selling across the border through the Internet, the FDA I think the next day or the day after said there may be a concern about the safety of these pharmaceutical products. And so they were marching in lockstep with the pharmaceutical industry to stop Americans from getting these lower- priced pharmaceutical products, the same products they can get here, from Canada.
Dues from the pharmaceutical industry will go to $144 million, an increase of 24 percent or $28.3 million over this year's dues. In its budget for the fiscal year that begins July 1, the pharmaceutical lobby earmarks $72.7 million for advocacy at the Federal level directed mainly at, you guessed it, the Congress of the United States. $72.7 million to lobby us; $4.9 million to lobby the Food and Drug Administration. I do not know if they have to spend that much because I think the FDA is pretty much in their pocket already. And $48.7 million for advocacy at the State level. In addition, the budget sets aside $17.5 million to fight price controls and protect patent rights in foreign countries and in trade negotiations. The PhRMA budget allocates $1 million to change the Canadian health care system and $450,000 to stem the flow of low-priced prescription drugs from online pharmacies in Canada to customers through the Internet here in the United States. I think it is kind of funny. They are going to spend $73 million to lobby Congress and only a million to do it in Canada. I think that is because they feel like it is a lost cause up there.
In a memorandum for the PhRMA board, it says the industry is on the defensive, facing a perfect storm whipped up by several factors, expanding government price controls abroad, resulting in politically unstable crossborder pricing differences; increasing availability of medicines from abroad via Internet sales; State ballot initiatives to make drugs more affordable in the United States; increasing State demands for drug discounts in the Medicaid program; and false perceptions that drug prices are increasing by 20 percent a year. I do not know whether they are going up 20 percent a year, but they are a heck of a lot more here than they are in Mexico, in Canada, in Spain, in Germany, in France and elsewhere.
Let me go into this breakdown a little bit further, and then I will yield to my colleagues. At least $2 million, and perhaps $2.5 million, in payments to research and policy organizations to build intellectual capital and generate a higher volume of messages from credible sources sympathetic to the industry. They are going to hire a bunch of people to be their mouthpieces that are supposedly credible to convince us that we ought to let the American people be saddled with these huge prices while
these same products can be sold elsewhere for a lot less.
$9.4 million for public relations, including $1 million for inside- the-Beltway advertising. $555,000 for placement of op-eds. They are going to buy the op-ed pieces in the newspapers? $555,000 for placement of op-eds and articles by third parties. They are going to hire people to put these articles in and pay them $555,000. I suppose if I wanted to, I could write an op-ed on behalf of the pharmaceutical industry, and they would pay me to do it.
$600,000 for polling; $1.3 million for local publicity in 15 States. I suppose that is congressional districts. For instance, in my district this last week, PhRMA went into Kokomo, Indiana, and talked to one of the writers; and they went to the Louisville Courier Journal, on both ends of my congressional district, to try to make the case that I did not know what I was talking about and that I was hurting the people of this country by trying to make sure they get a fair shake on these pharmaceutical prices, and they did that to try to discredit me and hurt me in my congressional district. I have to tell you something, PhRMA PR people, you are making a big mistake. A big mistake.
The Federal affairs staff at PhRMA has quadrupled since 1999. The organization plans to spend $5 million for outside lobbyists at the Federal level. In their campaign contributions, drug companies have favored Republican candidates, but PhRMA has retained a diverse group of lobbyists to ensure access to Democrats as well. I am sure of that. I will not go into who some of their lobbyists are, but my colleagues in the House know that we have a lot of our former colleagues out there that are on the payroll of the pharmaceutical companies. Big, big bucks.
The State government affairs division of PhRMA will spend $3.1 million to retain more than 60 lobbyists in 50 States. The number of State legislative proposals dealing with prescription drugs has doubled since 1999. The drug industry says many of these bills are seriously negative, have a high probability of enactment, and require major attention on our part. They want to get it stopped.
They hire 600 lobbyists here in Washington, D.C. That is more lobbyists than we have in Members of the House and the Senate. That is overkill. They only need one for each one of us. What are they going to do with the other 65? I guess they will all go to lunch, have a triple martini lunch. I hope PhRMA is watching this. I really do.
PhRMA said it would spend $12.3 million to develop coalitions and strategic alliances with doctors, patients, universities, and influential members of minority groups. The organization has earmarked several million dollars to foster ties with groups like the National Black Caucus of State Legislators; the National Hispanic Caucus of State Legislators; and the National Medical Association, which represents the interests of African American doctors. The budget includes $500,000 for efforts to educate and activate Hispanic-Latino organizations at a State and Federal level.
In other words, my colleagues, and I think my colleagues who are here on the floor tonight already know this, they are pulling out all the stops to keep their profits very high here in the United States, to saddle the American people with huge prices while they are selling these pharmaceutical products for a lot lower elsewhere, and they are going to lobby us to death to try to make sure those profits remain high.
I am a free enterprise advocate. I believe in keeping our nose out of the private sector as much as possible; but when an industry starts beating American taxpayers to death and American consumers to death with exorbitantly high prices while at the same time they are selling these same products around the world for less and still making a profit and then they say, we cannot buy them abroad and they threaten the people who sell them to us from abroad with closing them down, then that is wrong. That is bullyism and that is something that cannot be tolerated.
The free enterprise system, God bless it, should not tolerate that kind of activity from any industry. I will say to the pharmaceutical industry right now and I believe the pharmaceutical products have given us the highest quality of health care in the history of mankind, and God bless you for that; but you have gone too far when you start raping the American people; and that is what is going on with these prices right now and it ain't going to work.
The Internet is here to stay. If you push in on one side of the balloon, it is going to pop out someplace else and you better get with the program. Make a profit, but make sure it is fair for everybody. Make sure it is fair for everybody. If you do that, I will be one of your biggest supporters as I have been in the past, and I am sure my colleagues will as well.
We have the gentleman from Maine (Mr. Allen) here, the gentleman from Vermont (Mr. Sanders), the gentleman from Minnesota (Mr. Gutknecht), and the gentlewoman from California (Ms. Watson). Let me get this straight here. I want to make sure that everybody that is paying attention in their office understands this. Congressman Allen is a Democrat. I am a Republican. Congressman Sanders is an Independent. I am a Republican. Congressman Gutknecht, God bless him, is a Republican. I am a Republican. I like you a lot. And Congresswoman Watson is a Democrat from California. But we all see eye to eye on this. This is not a partisan issue. That is why I think the pharmaceutical industry spending hundreds of millions of dollars ain't going to win this battle because they cannot beat us when we are united.
With that, let me yield to my colleague, the gentleman from Maine (Mr. Allen).
Before the gentleman departs, let me just say there are five of us here tonight, and I hope that we will all use our influence to educate the rest of our colleagues who are not as conversant with this problem as we might be. You, being one of the leaders on the Democrat side, I hope you will talk to your colleagues, along with the gentleman from Vermont (Mr. Sanders) and the gentlewoman from California (Ms. Watson.)
I yield to the gentleman from Minnesota (Mr. Gutknecht).
Mr. Speaker, let me say to my colleague, who has been the leader on this issue for a long time, we all appreciate your hard work. And I understand your saying, shame on us. But the Food and Drug Administration, which we pay for with taxpayers' dollars, should not be protecting the pharmaceutical industry and making sure that these exorbitant profits are made year in and year out, and then coming to the rescue of the pharmaceutical industry when they are trying to stop the reimportation of pharmaceutical products from Canada by saying that there is a safety issue.
It is unconscionable what they are doing over there, and we need to keep the heat on them. So maybe not, shame on the pharmaceutical industry by itself, but shame on them and the FDA and us for not being more responsive.
I think that needs to be dealt with along with the prescription drugs benefits we are going to talk about. I do not want to pass a prescription drug benefit that is going to guarantee the taxpayer paying for these huge profits being realized by the pharmaceutical industry.
Let me go to my colleague, the gentleman from Vermont, Mr. Sanders, and then go to the gentlewoman from California (Ms. Watson). The gentleman from Vermont (Mr. Sanders) has been working on this for a long time as well.
Mr. Speaker, I thank the gentleman from Vermont (Mr. Sanders), and I would like to say to my colleagues that not this Thursday but next Thursday we are going to have a hearing in the Subcommittee on Wellness and Human Rights of the Committee on Government Reform.
I anticipate and hope we will all be there, because we are going to have some witnesses come in from the pharmaceutical industry, and more witnesses come in from areas that can show that these products will be safe coming into the United States. We are going to have people from HHS and FDA there. I think it will be a very illuminating meeting; plus, we have some surprise information that will be coming out of that meeting, as well.
The gentlewoman from California (Ms. Watson) has been very patient. I thank her very much for being with us. She has been a leader in California on a number of issues involving health. I am happy to say she is my ranking member on our committee, and she does a great job. I yield to the gentlewoman from California (Ms. Watson).
Mr. Speaker, while the gentlewoman was talking, I talked to the gentleman from Minnesota (Mr. Gutknecht), and one of the things in the law that the gentlewoman cited was that the FDA had to show that the products coming in were safe.
Why do we not turn that around by amendment and say that the FDA has the burden of proof placed upon it to prove that pharmaceutical products coming into the country are not safe? And if we did that, that would open up the borders so people could buy these pharmaceutical products, and the FDA would have the burden of proof on its shoulders to prove they are not safe in order to stop them from coming in.
I will have a bill drafted; and if Members would be willing, I would like them to cosponsor this change.
I think maybe that would be a good idea. Mr. Speaker, I think that it is a great idea to make the FDA respond by having a GAO study that does exactly what the gentleman is saying, to show how many people have suffered or died or worse because they could not get the prescription drug benefits. So that should be in our request to GAO.
Mr. Speaker, I yield again to the gentlewoman from California.
We are just about out of time, but the gentleman from Ohio (Mr. Brown) came down to the floor and requested a few minutes.
Mr. Speaker, I thank the gentleman for coming down and joining us. We hope that he, along with a lot of our colleagues on both sides, will join with us in this fight to get this job done.
We are just about out of time. If the gentleman from Minnesota (Mr. Gutknecht) needs time, I will yield to him.
Let me just say one more time to the PhRMA people, if they happen to be following this discussion tonight, the people in the pharmaceutical industry, we all agree that they have done a great deal for mankind and they have
given us the highest quality of health in the history of man; but at the same time, there is a limit to how much they can expect out of our veins as far as the price of pharmaceutical products, especially when we know those products are being sold for a lot less elsewhere. This fight is not going to end until we obtain victory.
I want to tell them there are a lot of people here, besides those tonight, who are committed to making sure that we get these prices of pharmaceutical products down to a level that is acceptable for the American people, as they are in other parts of the world. No matter how much money the pharmaceutical companies spend or PhRMA spends, they ain't going to win this battle.
So I think they need to get with the program instead of trying to stop Niagara Falls with a sieve. It is not going to work. I think Lincoln said it the best. He said, ``You can fool all of the people some of the time and some of the people all of the time, but you cannot fool all the people all the time,'' and this is so transparent the American people are going to get it and they are going to get it very quickly.
I now yield to the gentleman from Minnesota (Mr. Gutknecht).
One-sixth.
I thank my colleagues, and we will be taking special orders in the future. I hope they will join with me when we do that, and I look forward to even the gentleman from Ohio (Mr. Brown), if he has the time, to come to our hearing, which is a week from Thursday, because it is going to be a very important hearing on this entire subject.