Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, let me first of all say that the gentleman from Ohio who just spoke, he and I strongly disagree. I happen to believe that it is time to modernize Medicare, it is time to give seniors more choices, and we will come to different conclusions on that particular issue. But there is an issue that we do agree on, and that is that Americans pay far too much for the same pharmaceuticals. Last week, on Thursday, I was privileged to welcome to the Capitol and to one of my news conferences a true American hero. Her name is Kate Stahl. Kate Stahl wears a little pin that says ``Kate Stahl: Old woman.'' She is 84 years old and she is proud of the fact; in fact, she describes herself as a drug runner. I would encourage Members to get a copy of the June 9 edition of the U.S. News and World Report, and they will see a picture of Kate Stahl in that edition. And in there it says, and she is quoted as saying, ``I hope they put me in jail.'' Because what she does every day, working with the senior Federation in the State of Minnesota, is she helps seniors get access to world-class drugs at world-market prices. As a result, our own Federal Government treats her as if she is a common criminal. But she is prepared to go to jail to make a point, and that is that Americans should not have to pay the world's highest prices for prescription drugs. We also welcomed to Washington last Thursday Dr. Wenner from Vermont. She is working with pharmacists in Canada so that her patients from her clinics can save, and these are her numbers, have been saving 62 percent on the same prescription drugs by working with pharmacies in Canada. Now, the FDA acknowledged at a hearing that we had last week that any of the evidence about safety is only anecdotal. As a matter of fact, by their own numbers, they cannot come up with a single case where an American patient has suffered serious injury as a result of taking a legal prescription drug from a pharmacy from a different country. We also know that more people have become seriously ill and some have actually died from eating imported fruits and vegetables. We know that, for example, in one year, just a few years ago, over 1,100 Americans became seriously ill by eating raspberries that had been imported from Guatemala. Now, when we talk about safety, I think the real question is, who are we protecting from whom? Who is really being protected by our FDA? More and more of us are coming to the conclusion that the only people really being protected are the big executives of the large pharmaceutical companies. We ask ourselves, why are Americans, the world's best customers, paying the world's highest prices? And the answer is, because we are a captive market and because our own FDA literally puts a border around our country and will not allow Americans to have access to those drugs. As I mentioned, we import thousands of tons of food every day from all over the world. Last year, for example, we imported 318,000 tons of plantains. People say, well, somebody might get into these Fed Ex packages and get inside the tamper proof packages and somehow substitute counterfeit drugs, but again, the evidence of that is anecdotal at best, and if we stop and think just for a moment that if terrorists really wanted to get at the broad base of the American consumers, would they really resort to trying to break into UPS offices, Fed Ex offices to get into those packages and somehow tamper with those pharmaceuticals? I think common sense tells us that that simply is not going to happen. We as Americans should be willing to pay our fair share for all of the costs of the research and development for the miracle drugs that are coming out of the pharmaceutical companies that help save lives. We ought to be willing to pay our fair share, but we have to be willing to say that it is time for us to say, yes, we will subsidize sub-Saharan Africa, but we are going to stop subsidizing the starving Swiss. I am a Republican. I believe that the word ``profit'' is actually a good word. There is nothing wrong with the word ``profit,'' but there is something wrong with the word ``profiteer,'' and I am delighted that we have people like Kate Stahl who will stand on the shoulders of the sons of liberty who threw tea in Boston Harbor because they saw something clearly was unfair, and they were not going to take it anymore. She represents literally millions of seniors and consumers here in the U.S. who are saying enough is enough, we are not going to take it anymore.

Mr. GUTKNECHT

Mr. GUTKNECHT. About one third. And I say shame on us because we have the power to do something about that. I spoke several weeks ago to the Community Pharmacists, and I just had received this report from the Kaiser Foundation. I asked them as I looked out over this audience of roughly 300 pharmacists from all over the United States, ``Has this ever happened to you, where seniors come into the pharmacy, they hand you a prescription and you tell them how much it is going to be, and they drop their head and they say, `well, I will be back tomorrow,' and they never come back?'' Shame on us. Shame on us. We need to do something about that. But as has been mentioned by several of my colleagues, if we go about this in the wrong way, we may not do enough to really help those seniors who really need the help. But, worse than that, we may bankrupt our children, and there is something wrong with that. Let me also mention that we are moving ahead with this, and we have heard some of the sponsors of the various bills say, oh, but we will have these groups, and get very significant discounts and really good deals on prescription drugs. Well, this is a study recently done by one of the cardinals of the Committee on Appropriations, and they literally went through and found out how much the Federal Employees Benefit Program is paying for some of these drugs. It is rather eye-opening. There are some areas where they are actually getting good discounts and are competitive with the prices they get in Europe. But let me give you some examples. The Blue Cross-Blue Shield plan, for example, on Coumadin mentioned earlier, even with their discount, the combination of what the Blue Cross-Blue Shield plan cost is, and you add in the beneficiary cost, the total cost for Coumadin under the Blue Cross Blue Shield plan for a Federal employee is $73.74. Now, Coumadin can be bought for $15.80 in Europe. So $73, that is the Federal plan. You read down the list of all kinds of other drugs. It is very similar. Zocor, the total cost for Zocor under the Federal plan, Zocor is one area where it actually is cheaper, but not much cheaper. With their deep discount, the total cost is $17.48. That same drug in Europe would be $28. But as you go through the list, what you find is in virtually every category, even with these ``deep discounts'' that the Federal employees' plan is able to get, it still is significantly more than the average consumer gets them for in Europe. One final point, if I could, the argument that many people make against reimportation is safety. But what about safety?

Mr. GUTKNECHT. Mr. Speaker, let me just talk about a couple of things, and I think as we talk about this new benefit, and I think we all recognize there are far too many seniors that are not getting the prescription drugs that they need, there was a study done several years ago by the Kaiser Foundation, and they found in their survey that 29 percent of seniors responded that they have had prescriptions which they did not have filled because they could not afford them, 29 percent.

Mr. GUTKNECHT. Unfortunately, on Taxol I do not have that comparison. I do not think it is on my list, but the comparison is essentially the same. It is about three times more, or at least it was when it came off patent in the United States; it was more than three times more in the United States than they paid in Europe, and the American taxpayers paid for most of the R&D costs. By the GAO's own estimate, the taxpayers spent at least $484 million developing the drug, and I yield to my friend.

Mr. GUTKNECHT. I think he used the word earlier and I think it is the critical word. He said that we are a captive market, and if we look around the world, whether it is beef and Japan or blue jeans in the former Soviet Union, anytime there is a captive market, what will happen is they will create an artificial price barrier which will guarantee that the consumers will pay outrageously higher prices, and that is what has happened here in the United States. The German pharmacist has the right to go anywhere within the European Union and buy this Tamoxifen where he can get it the cheapest for his consumers. That is part of the reason that Tamoxifen is $60 in Germany and $360 here in the United States. In fact, the companies are protected by our own FDA from any real competitive pressures which would help to keep prices down. And I do not say shame on the pharmaceutical industry; I say shame on us. They are only exploiting a market opportunity which our government has given them. Let me just share with the gentleman and other Members from a book called ``The Big Fix'' because I think it helps tell the whole story by Katharine Greider, and she quotes a study that was done in 1998 by the Boston Globe, and they looked at the 35 highest-selling prescription drugs in the United States; and they claim, the Boston Globe, and then is repeated in the book ``The Big Fix,'' that 32 of the 35 largest- selling drugs in the United States a few years ago were actually brought through the research and development chain by the taxpayers through the NIH, the NSF, the Defense Department, or other Federal agencies, principally the NIH. So it is not shame on them, but it is shame on us. We do not get a rate of return. We get nothing except for millions of our consumers the highest prices in the world, and it is time for us to change that.

Mr. GUTKNECHT. No. I have plenty of information, but the interesting thing about these charts and these comparisons, if people doubt what they paid for these drugs, we have the receipts. So we can literally go through and say, yes, this is what we paid for Tamoxifen, $59.05 in Germany, and we did not have a special discount card. We are not German citizens; so we were not going in for socialized medicine. These are drugs that we just bought off the shelf or from the pharmacist at the Munich airport. So it is not as if they are being subsidized by the German Government. The truth is they are being subsidized by us, and what I have always said is that Americans should be prepared and we are prepared and willing. I think most Americans are willing to subsidize the research for these miracle drugs. In fact, I think we are willing to subsidize people in developing countries like Sub-Saharan Africa, but we should not have to subsidize the starving Swiss. And finally, let me just make one last point, and I will yield back. I am with the gentleman. I happen to be a Republican. The gentleman is a Democrat, but we are both capitalists. We both understand that there is nothing wrong with the word ``profit,'' but there is something wrong with the word ``profiteer,'' and there is growing evidence now that the big pharmaceutical companies are actually spending more on marketing and advertising than they are on basic research.

Mr. GUTKNECHT. We import every day thousands of tons of food. It surprises me how many tons. In fact, the number I remember is we import roughly 318,000 tons of plantains every year, and every time we eat a plantain that comes in from a foreign country, we take a certain amount of risk, because that could contain some food-borne pathogen. We keep very good records on how many people get ill from eating imported foods. Let me give a couple of examples. In 1996, 1,466 Americans became seriously ill eating raspberries from Guatemala, 1,466. The next year they did a little better. Only 1,012 Americans became seriously ill from eating raspberries from Guatemala. The point I am really trying to make here is we take a certain amount of risk. I believe that the risk, particularly with the new technologies, and I am holding in my hand a tamper-proof, counterfeit- proof package for pharmaceuticals. Here is one that is currently in use by the company Astrozenica. This is the first version of the tamper-proof, counterfeit-proof packaging. So this whole issue of safety relatively speaking, even today, it is very, very safe. But with the new technology that is going to be coming on line, I am holding in my hands, and you cannot see this, but a little vial, and inside this vial there are 150 microcomputer chips. They are so small you can barely see them with the naked eye. But this literally is the next version of the UPC code. Within 2 years they will be embedding these chips into packaging, so that we absolutely can know that this package of drugs was produced at the Bayer plant in Munich, Germany, on September 8 of this year, and was shipped to so and so. So the whole idea that we cannot do this safely, it seems to me, is a specious and almost goofy argument. So I do not think we should even engage in it. It can be done, it is being done. It is far more safe to import drugs than it is raspberries from Guatemala.

Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield.

Mr. GUTKNECHT

Mr. GUTKNECHT. You can use whichever. I would say Americans are willing to pay their fair share. We understand there is a cost for research. We understand we have to pay that $3.9 billion that one of the big pharmaceutical companies will spend this year on advertising and marketing. We understand that has to be paid. We are willing to pay our fair share. We are willing to subsidize the people in Sub-Saharan Africa. But we should not be willing to subsidize the starving Swiss.

Mr. GUTKNECHT. Absolutely. Let me just talk about this Glucophage. This package of Glucophage in the United States sells for over $100. We bought it in Munich, Germany for $5. $5.

Mr. GUTKNECHT. Wrong again. They treat Kate Stahl and literally almost a million, or more than a million, Americans just like her, they treat her like a common criminal. This is an 84-year-old grandmother who is only doing this to try and save her friends and neighbors some dollars on the cost of prescription drugs. If one of them is suffering from breast cancer, $360 is a lot of money. They can afford $60, but $360 is a lot of money. And it repeats itself, with all the drugs. Zoloft, Zocor, we have got all the drugs. Glucophage. This is outrageous what they charge for Glucophage here in the United States. This drug has been around a long time. It is a miracle, marvelous drug. It really helps people with diabetes. But the bottom line is Americans are required to pay way too much because they are a captive market.

Mr. GUTKNECHT. That is the point. If we are going to have a prescription drug benefit for seniors, which I think virtually everyone agrees we should, we ought to first of all deal with the issue of affordability. Because just shifting the responsibility of buying $100 Glucophage onto the shoulders of the taxpayers really makes no sense, because ultimately we are going to bankrupt our children if we make a stupid mistake and do not deal with this issue of affordability in price. Listen, we are Republicans. I am a Republican. I do not think the word ``profit'' is a dirty word, but I do think the word ``profiteer'' is. I think it is time if we are going to get in this business, we ought to demand some accountability from the pharmaceutical industry.

Mr. GUTKNECHT. Longer than I want to remember. Actually I got started with this about 5 years ago. I always tell people that I have moved from fan to fanatic. Winston Churchill said a fanatic is one that cannot change his mind and will not change the subject.

Mr. GUTKNECHT. I must admit I am using it as an example because it is probably the most egregious example, with the possible exception of Tamoxifen, which the taxpayers paid for.

Mr. GUTKNECHT. Warfarin, Coumadin, developed at the University of Wisconsin. The price here in the United States, about $84 for this package. The price in Canada, only $25. But here is the real kicker. Over in Europe they buy this same drug, as a matter of fact we bought this drug in Munich, Germany, for about $16. About $85 in the United States; $16 in Germany. Here is the other interesting thing. People say, well, they have price controls in Canada. To a certain degree that is true. I am not one that supports price controls and neither, I think, do you.

Mr. GUTKNECHT. We just have a few more minutes, and I will close by saying this. The gentleman is exactly right. We import in the United States thousands and thousands of tons of fruits and vegetables and meats. As a matter of fact, this year we will import 318,000 tons of plantains. If we can safely import 318,000 tons of plantains, we can surely figure out a way to import Prilosec and Glucophage. There is no way people will argue we cannot do this safely. We have the technology today. The time has come to open up markets, let our people go and stop this captive market. We will see prices drop in the United States by at least 30 percent.

Mr. GUTKNECHT. Well, the real bottom line is virtually every other company has to compete in a world marketplace. What we are saying is let markets work. Open up the markets. Finally, we are all concerned about safety. But this is a counterfeit-proof package. It is a blister pack, one of the first versions. It is getting better. There is a great little company out in California that is helping to develop the technology for the new $20 bills to make them counterfeit- proof. It is good enough for the U.S. Treasury, but, so far, not good enough for the FDA. We are going to demonstrate in the coming weeks how we can have safety-sealed counterfeit-proof packaging which will guarantee the safety of drugs wherever they happen to come from. If the drug companies have to compete in a world marketplace, the way General Motors does, the way Eastman Kodak does, the way IBM does, the way Microsoft does, or the way every other company in America has to compete, you will see prices in the United States drop dramatically; and that amounts to billions and billions of dollars of savings, not just for retirees, but for all Americans.

Mr. GUTKNECHT. Here is the interesting thing. They do not have price controls in Germany. What they do in Germany is what we ought to do here, and that is they allow the pharmacists to shop for the best price.

Mr. GUTKNECHT. It was paid for by the taxpayers. Originally, as it was developed, the drug was called Warfarin. They are basically identical drugs, but Warfarin is used as a rat poison. It is a blood thinner. What they do is they give it to rats, rats will eat it, they go back to their little dens, they bleed to death internally, no mess, no fuss. It kills rats. They found that this made a great blood thinner for human beings as well. Let me give you the differences in what Americans pay. The average price for this package of Coumadin in the United States is about $84.

Mr. GUTKNECHT. Absolutely. The time is now. You mentioned in coming from Michigan, General Motors has been a fabulous employer. Not only in the State of Michigan but for suppliers all over the world. The interesting thing is General Motors, I met with a General Motors lobbyist last week. Do you know how much they are going to spend this year on prescription drugs, the company? This is just for their employees and their retirees. $1.3 billion. GM will spend $1.3 billion. What is worse, that number is going up 16, 17, 18 percent per year. That is a cost before they sell the first automobile, before they sell any cars. Those are costs they have to pay for.

Mr. GUTKNECHT. Mr. Speaker, as they used to say on The Tonight Show, you would be wrong, oh, great one. That is the irony. We are the world's best customers by any measure, and some people have challenged some of the sources, but nobody challenges the numbers. The numbers speak for themselves. Even now the pharmaceutical industry acknowledges that the world's best customers, the Americans, pay the world's highest prices for their drugs. We are not just talking about a little bit more.

Mr. GUTKNECHT. The gentleman is correct. It is one of the mysteries that we as public policymakers have been wrestling with for several years trying to figure out why is it the world's best customers pay the world's highest prices. It seems to me that we have an obligation as policymakers not only to try and get answers to those questions but, more importantly, to try and do something about it. I think the reason is, if I can just say this, if you go to Tokyo, Japan, and this is starting to change in Japan because Japan is starting to open up its markets, but for many years, if you went to Tokyo and you wanted to have a good steak----

Mr. GUTKNECHT. Right. We are absorbing that cost, and I think when we talked about this at a conference today, what somebody said is we are subsidizing the rest of the world in health care and prescription drugs, and we are subsidizing, I think your term is, the ``starving French,'' or the ``starving Swedes,'' or the ``starving Swiss.''

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman, and it is not just Minnesotans and Michiganers who are smart. One of our favorite Presidents, Ronald Reagan, said it best: Markets are more powerful than armies. Starting several years ago, consumers figured out that they could buy their prescription drugs cheaper in Canada and Mexico, and now they know in Europe and almost every other industrialized country in the world they can buy the same drugs for dramatically less.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I ask unanimous consent to claim the time of the gentleman from Indiana (Mr. Burton).