Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I think that is a fair question and I am not sure I can completely answer the question. That has happened with the taxpayers have underwritten most of the cost of developing at least the basic formula for a new drug, and then the company has gone out and patented that, and they have reaped all of the benefits. In fairness, they probably pay over the life of that drug, they pay an awful lot of taxes and so we recoup some of that through taxes. But the question is a fair one. If a drug is developed mostly with taxpayer-funded research money through the NIH or other Federal grants, the taxpayers should get some kind of royalty and that is a question that we have not resolved. Frankly, we may need some help from the Secretary of Health and Human Services, the people at NIH, the National Science Foundation, as well as some of the folks at the Patent Office. I am delighted to hear that we may have a hearing on this whole issue in the Committee on Energy and Commerce, and I hope we can bring some of those people in to explain to us as policymakers and to the people of the United States how it is that we can get shorted on both ends. In other words, we pay for the research and we pay exorbitantly high prices for the drugs relative to the rest of the world.

Mr. GUTKNECHT. Mr. Speaker, I think the whole issue of reimportation will begin to force that issue. The question we are really asking today is how safe is safe. What is the FDA protecting us from? In their effort to make us absolutely safe from any imported drug that is clearly legal in the United States, and to keep us safe from drugs that have already been approved in other parts of the world, they are putting roadblocks in the way, and in many cases are costing American lives and not improving their health. I think the question we have to ask as policymakers is how safe is safe enough. As I mentioned earlier, we import 500,000 tons of pork every year. You can get sick and die from bad pork, and yet 500,000 tons is imported every year with very little inspection by the Food and Drug Administration. I think we have to be honest with ourselves. Even with all of the time and research that goes on, some people are going to have an adverse reaction to some drugs. That is just absolutely going to happen. Some people are going to take a drug, and they are going to get well. Some other people may get sick, and some might die from taking that drug. There were some studies that came out on Premarin and Prempro. They are female hormone drugs. They come from horses. We have known about them for literally years and years. What we did not know, that by taking these two drugs, either of these drugs, you may begin to develop and have a significantly higher rate of breast cancer, heart disease and other diseases. I do not know what the future is going to be, but the point is we studied these hormone replacement therapies for years, and yet we did not know what we now know today about those drugs. I think we have to ask ourselves how safe is safe. Is the FDA really protecting us from serious injury, and we want them to do that, or are they being so careful, both on the reimportation side and on the approval side, that they are endangering American lives? We are asking them for a serious analysis, and compare what we do in the United States with what they do in Europe. Ultimately I think we will get drugs on the market faster, we will get generic drugs on the market faster, and if we have reimportation, we will get much cheaper drugs.

Mr. GUTKNECHT. Thirty-three miles?

Mr. GUTKNECHT. We do have to ask, Who are they protecting us from?

Mr. GUTKNECHT. I think it was Glucophage that originally you had to take twice a day. There is a legitimate question whether or not they should have gotten an extra 17 years simply because they went from a two-a-day capsule to a once-a-day capsule.

Mr. GUTKNECHT. I believe that is correct. That was a study that was done at the University of Minnesota, and I believe the gentleman's numbers are correct; that literally tens of thousands of Americans become seriously ill or die every year from not taking their medications correctly. And we do not know at this point, based on that study, how many of them were cutting their pills in half or were mixing medications that they should not have mixed. Which brings me back to the point I did make before the gentleman came over, and that is our vision is to keep the pharmacists involved. We believe that the pharmacist is a very important component in the health care delivery system. They are the ones who know how drugs interact and how these drugs should be taken; whether they should be taken at mealtime or before bed, whether they should take a whole glass of water or drink with milk. There are a number of different things that are important; and we know an awful lot of people do become ill, thousands, tens of thousands, because they take the drugs incorrectly or they mix and match drugs they should not.

Mr. GUTKNECHT. Let me share with my colleagues and those who may be watching, because this is something I did not know until a few years ago. Before somebody can begin to make a generic drug, the patented drug, the name-brand drug, that patent will have had to expire. Or sometimes they will turn them back. Occasionally, they will turn them into an over-the- counter drug before the patent expires. But the point is, they have to go to the FDA and ask for approval just as if it were a new drug they were making, a brand-new drug. What they are doing is they are copying the recipe for that drug, and they have to prove to the FDA beyond a shadow of a doubt that the difference between their drug, the generic drug, and the name-brand drug will be no more than the difference between one batch of the name- brand drug and the next batch. Sometimes there is an impression left with people that, oh, if you take the generic drug, that is inferior to the name-brand drug. It simply is not true. The active components are identical in every way to the name-brand drug. And the savings can be 60, 70, 80, or 200 percent.

Mr. GUTKNECHT. If the gentleman would yield, we know of at least one example that was well publicized of a pharmacist in the Kansas City area who was adulterating drugs. He was a licensed pharmacist, and he was ultimately caught. We do not know how many Americans ultimately died or lives were shortened or lost their health as a result of what he was doing. But that did not happen because of drugs that were being imported from a pharmaceutical supply house in Geneva, Switzerland. That happened right here in the United States of America, in Kansas City, Missouri.

Mr. GUTKNECHT. Mr. Speaker, let me say first before I begin on the issue that I really want to talk about tonight, I listened to much of my colleagues' Special Order for the last hour. And I have to say on behalf of most Republicans, and I think most Americans, we agree with what they have said. The truth of the matter is when there have been frauds, and we have seen fraud committed against shareholders and against corporations, those people need to go to jail. And I think we are all in agreement on that. Frankly, I think just for the theater of it I would like to see some of these corporate executives that have been charged with crimes and will be charged with crimes, I would like to see them arrested and taken away in chains. I would like to see handcuffs on them. I think I speak for the overwhelming majority of people in this Congress. I will say this: the one thing we have to be careful of is that we do not try to turn this into a partisan thing. I do not think this is a partisan issue. I think all of us can stand and talk about our moral outrage for some of the things that have gone on in corporate America, and the time has clearly come to clean them up. I rise, though, tonight to talk about another crisis that all of us know about; and, frankly, we in Congress have done too little to really resolve, and that is the whole issue of about how much Americans pay for prescription drugs. It is a crisis particularly for those seniors, but not just seniors but for all Americans who do not currently have some kind of drug coverage in terms of insurance. And as we speak tonight, there are literally hundreds, if not thousands, perhaps even millions, of Americans who are having to make very, very difficult decisions about whether or not they can afford the drugs that the doctors say they need to regain their health. And I brought with me, and these charts are becoming all together too familiar to many of my colleagues, but I think they need to be restated because we have learned the more you learn about this issue, the more we can come together with some kind of a solution. But I want to point out this chart because as I was going through my closet here about half an hour ago, I found this chart from last year. This is dated 2001. And I wanted to bring this with me to show you a couple of examples, and what we have here is a chart that demonstrates the price that Americans pay, the average U.S. price versus the average European price. The source of this, these are not my numbers. This is from the Life Extension Network. It is an independent foundation that has been studying this issue for more than 10 years. They continue to come to the same conclusion and that is that for prescription name-brand drugs Americans pay more than anybody else in the world for the same drugs. There are a lot of reasons for that, and we will talk about that during this Special Order. But what is interesting to me is to see how prices have changed just since last year. Now, this chart is about a year and a half old. And what you see, for example, let us take a couple of these drugs, Claritin, a very commonly prescribed drug, a lot of people are taking it now for allergies. It is about to go off of patent so you will see the price come down dramatically in the United States in all probability, although I will tell you the pharmaceutical company that makes it is trying to replace that with a drug called Clarinex. Now according to at least one report, Clarinex is a better drug than Claritin. It is 2 percent better. That is not a huge improvement for the difference in price. But the thing that bothers me is that the average price for Claritin in the United States was about $63.06 for a 30-day supply. That same drug sold on average in Europe for $16.05. Another commonly prescribed drug is one we have talked about here on the House floor because my 84-year-old father takes this drug every day. In fact, many senior take it. It is called Cumadin. It is a blood thinner. It is a very good drug. It is more effective than asprin, and if you have had a stroke or if you have had a heart attack, if you have got a problem with blood clotting and platelets and so forth, it is a very effective drug. Let me say from the outset, I am not here tonight to beat up on the pharmaceutical industry. I am not here to say shame on the pharmaceutical industry. They are only doing what any free enterprise company would do in terms of exploiting a market opportunity that we have given them. No, I am not here to say shame on them. I am here to say shame on us because we have created this situation and we need to change it. Let us talk about Cumadin. Last year the average price, a year and a half ago in the United States was about $37.74. The average price in Europe was $8.22. Now, that price has changed. I will pull up the next chart, which is this year's prices; but as we go down the list, we have seen the big differences. When you get into some of the very expensive drugs, Zithromax 500, United States price for a 30-day supply, $486. The same drug in Europe made in the same plant under the same FDA approval sells for $176. Huge differences. There are some where the differences are less. You look at, for example, Lipitor. The average price for Lipitor in the United States, $52.86. In Europe, $41.25. Again, these prices are about a year and a half old. Let me show some of the current prices because some of these drugs have changed dramatically in just a year and a half. I mentioned last year that Cumadin in the United States the average price was $37.74. In just a year and a half that price has gone to $64.88. Now, that makes me angry to see that huge difference because nothing has changed. It is exactly the same drug, put in exactly the same capsules, under the same FDA approval and the same FDA plants. The interesting thing, too, is as far as I know there have been no major lawsuits so they have not had this tidal wave of litigation that we sometimes hear about. So the price has almost doubled in just about a year and a half. Now, it makes me feel just a little better that the price in Europe has doubled as well. The price has gone up uniformly, but the price is Europe today is a little over $15. The price in the United States is $64. One that has really gone up as well is glucophage. Glucophage is a marvelous drug. If a person suffers from diabetes, glucophage has changed their lifestyle. It is a fabulous drug, and the manufacturers deserve credit for what they have done for all of the millions of people, not only here in the United States, but around the world, who suffer from diabetes. The price has gone up now to an average of $124.65 for a 30-day supply in the United States. The average price in Europe, $22, $22. Some people will say, well, how can that be, how can it be that the prices are so much different? Let me just, first of all, say that many other countries do have various forms of price controls. We have price controls on hospitals and doctors and medical providers under Medicare as well. We determine how much they can charge, and essentially with some of the countries that is what they have done. They have price controls on these drugs, but that is not universally true. If we look at countries like Germany and Switzerland, where a number of the big pharmaceutical companies are based, Germany and Switzerland, as far as I can tell, do not have what we would describe as price controls. Let me give my colleagues a couple of examples, and these again, these are charts, the numbers are provided by the Life Extension Foundation. If any of my colleagues would like to take a look at these charts, they can just go to my Web site at gil.house.gov and we have this chart up there and have more information about the differences between what Americans pay for prescription drugs and what the rest of the world pays. I was not completely satisfied just to use the numbers that we had received from the Life Extension Foundation, so we had one of our friends, or some friends in Europe, buy some drugs for us, so according to the FDA what I am holding up right now are illegal drugs. The FDA holds that it is illegal to bring these otherwise FDA-approved drugs, made in FDA-approved facilities into the United States. They do not always enforce their rules. For personal use, if a person brings them back with them from Europe or Canada or other industrialized countries, generally speaking, the FDA will not enforce what they believe are their own rules. Let me show my colleagues this drug. It is a drug called Zocor, and this drug was bought about 3 weeks ago in Europe. In fact, I think I can even tell my colleagues where it was purchased. In fact, the story of Zocor is even more interesting because it is manufactured by a subsidiary of the Merck pharmaceutical companies. It was manufactured and distributed in Italy, and this was bought in a pharmacy in Como, Italy. The price for this Zocor in Como, Italy, was 13.94 Euros. The day that this was purchased, the American conversion on that was $14.77. I am sorry, it was 14.77 Euros; the American price is $13.94. I have a good friend who runs a pharmacy in Northfield, Minnesota, and so we called him and asked how much this exact same package of Zocor would sell for here in the United States in Northfield, Minnesota. The price, as I say again, in Europe was $13.94. This drug bought at the pharmacy in Northfield, Minnesota, is $45. I am not good in math, but that is more than five times the price, I am sorry more than four times the price for the same exact drug. We also checked on another drug, Claritin. Interesting story about this particular drug. This drug is manufactured by, actually, a Swiss company by the name of Schering Plough. Many of us know the name of Schering Plough, but many do not know that it is a Swiss company. But the interesting thing is, this drug was actually manufactured in Spain and it was reimported into Germany where, as I say, they do not have price controls, but they do have open markets, and the Germans have the right to shop where they can get the best price. This Claritin, manufactured by Schering Plough, a Swiss company, manufactured in Spain, was bought in Germany at a pharmacy in, let me get the name, in Riegensburg, Germany. It was purchased for 14.8 Euros; the American conversion that day was $13.97. Again, we called my favorite pharmacist in Northfield, Minnesota, and asked him how much this package of Claritin would sell for in Northfield, Minnesota, and the answer is $64.97; $13.97 in Germany where they have no price controls, $64.97 for the same drugs. We have to ask ourselves, why do we permit this to happen? We have open markets for almost everything else. How can it be that we are paying so much? Let me come back to something else. Let me talk about open markets and what open markets do for us every day. Some people say, well, if we open markets and if we allow Americans to purchase these drugs in other countries, there is a risk they may get the wrong drug or they may get a drug that has been adulterated or they may get a drug that is counterfeit. Well, that is true. I must tell my colleagues that is true, but every year we, as Americans, consume enormous amounts of food that comes in from other places. For example, last year in the United States of America, we imported 500,000 tons of pork. I love pork. In fact, we produce a lot of pork in my part of the district. In fact, we produce one of the world's finest luncheon meats. It comes in a blue can with yellow lettering. It is called Spam. Every day in Austin, Minnesota, we turn 16,000 pigs into Spam. I love pork. It is a wonderful product, and if it is managed properly, as far as we know, no one has ever gotten sick of any food- borne disease from eating Spam. It is a wonderful product. But the truth is, by eating imported pork, which is almost never inspected, and again, I want to give my colleagues that number, 500,000 tons of pork is imported. If a person eats pork that has not been properly refrigerated and so forth, they can get salmonella from pork, they can get trichinosis; and either one of those diseases can kill a person. So some people say, well, if we import these drugs people might die. We keep records. In the last 10 years, according to the Food and Drug Administration, and the FDA that is responsible, that literally has built this wall, that says Americans cannot import or reimport legal, FDA-approved drugs into the United States, they are the ones who have literally made it possible for the drug companies to have one pricing strategy for Americans and another pricing strategy for people around the rest of the world. Our own Food and Drug Administration admits in their own studies that of the hundreds of thousands of tons of fruit and produce that come into the United States every year, at least 2 percent of them are contaminated with food-borne pathogens, including salmonella. Salmonella can kill a person. It is a very dangerous food- borne pathogen. At the same time, they keep records, though, of how many Americans have become ill or died from taking legal, FDA-approved drugs that came in from other countries. Do my colleagues know what the answer is? Zero. No one, no one has gotten sick or died from taking legal, imported drugs from other countries. I have had town hall meetings around my district, and I can tell story after story, but I would like to share at least one of them with my colleagues. It is about a lady who was traveling in Europe and was traveling in Ireland, and she has a special skin condition. I think it is called eczema. She has to take a special cream, and it works very well, and again we thank the pharmaceutical companies for coming out with these marvelous drugs that help us all live better, but she ran out of that cream while she was traveling in Ireland, and she stopped in to just a local pharmacy. She was a cash customer. She walked in and she happened to have her prescription with her. She walked up to the pharmacist and said, could I get this prescription refilled here at this pharmacy, and he looked at it and he said, well, absolutely, and he sold her the cream. The price was $30 American. The price she says in the United States, and she uses about one tube every month, is $130. The difference in Ireland, $30; in the United States, $130. She got back to the United States, and as is always the case, on the outside of the little box of the prescription ointment was the name, the address and the telephone number of that pharmacy back in Ireland, and so as she began to get low on that tube of ointment, she did what a lot of us would do. She picked up the phone and she called that pharmacy in Ireland and asked if she could have the prescription refilled, and he said, sure, and I think she gave him her credit card number. He put it in a package and shipped it. I do not know whether it was FedEx'd or UPS'd or Parcel Post. I am not sure but when the package came through Customs, our own Food and Drug Administration intercepted that package, and they just opened it and they put a threatening letter in that package and ultimately sent it on its way to the lady and said this may be an illegal drug here in the United States, and in a sense they said if you try to do this again, you could be prosecuted. If a person is a retired single woman and they get a threatening letter from their own Federal Government, that is a pretty intimidating thing and that is what the FDA has been doing. They have been concentrating on honest, law-abiding citizens who are trying to save a few bucks because, for her, if she could buy that drug in Ireland, it would save her $1,200 a year, and for her, $1,200 is a lot of money. Let us be honest, for all of us, $1,200 is a lot of money. My vision, I want to make this clear, too. I want to include pharmacists in this whole thing. I want to be able, so that my dad or my wife or anybody who may be watching this particular C-SPAN program would be able to go to their local pharmacy and they would talk to their local pharmacist and say, listen, I need to renew my prescription for, pick one of these drugs, just name it, Claritin, I need a 3-month supply. The pharmacist ought to be able to say to them, listen, I can fill it out of my inventory of United States supply, and they force me to charge $89, or I can go on line and I can order it for you out of the pharmaceutical supply house in Geneva, Switzerland. We will have it shipped to you FedEx in about 3 days, and your price will not be $89 or $64, your price will be $16, plus about $8 shipping and handling. Which one would my colleagues prefer? If we multiply that by a 3-month supply, we are talking about 3 months. We want to keep the pharmacists involved because pharmacists play a very important role in the health care delivery system here in the United States, and we must not forget that. I want to show my colleagues some other charts here because I think they deal with some of the arguments that we hear around this building which, in my opinion, are pretty much nonsensical, and I have already talked a little bit about. Some say that importation jeopardizes consumer safety, but as I said, the truth is, there is no known scientific study that demonstrates a threat of injury to patients importing medications with a prescription from industrialized countries. Zero, zero. As I say, more people have gotten sick from eating imported strawberries. Thousands of people have gotten sick from eating imported strawberries, and we bring thousands of tons of strawberries into the United States every year and people get sick, and the Food and Drug Administration does almost nothing to stop it. What is more, millions of Americans have no prescription drug coverage. Stopping importation of FDA-approved drugs threatens their safety. A drug that a person cannot afford is neither safe nor effective, and millions of Americans today, because they cannot afford the drugs, are going without the drugs, and so that drug is neither safe nor effective. Let me go to the next question people raise. Some say that the FDA lacks the resources to inspect mail orders. The truth is the FDA is focusing on the wrong problem. They are putting all their resources, instead of stopping illegal drugs imported by illicit traffickers, they are spending all their time enforcing their so-called rules on approved drugs imported by law-abiding citizens. We are again talking about FDA- approved drugs from FDA-approved facilities, and let me just say this for the benefit of Members. There are only about 600 FDA-approved drug-making facilities in the world, and they inspect them regularly. We know what they are doing. They want to have FDA-approved facilities so that they can sell not only in the United States, but around the world. So far, last year, the FDA detained 18 times more packages coming in from Canada than Mexico. Why are we putting so much emphasis on trying to stop imports from Canada rather than Mexico? I am not saying anything disparaging about Mexico, but if we have a problem with drugs, counterfeit drugs, drugs that have been adulterated in some way, it strikes me that we have a bigger problem with Mexico than we do with Canada, and yet we have stopped 18 times more packages from Canada than we have from Mexico. Worse, last year, this was a year and a half ago, Congress appropriated $23 million for border enforcement, but the Secretary of Health and Human Services at that time ultimately decided not to enforce that particular provision and refused to spend the funds. Let me go to this next chart. Some say that a Medicare drug benefit will eliminate the need for importation, and we passed a pretty important bill in the House last week. I voted against it for a variety of reasons, but the truth is simply, shifting high drug prices on the government only transfers the burden to American taxpayers. It does not solve the problem. Americans are paying far too much. Moreover, Medicare coverage will not help the millions of Americans that do not have prescription drug coverage in their health insurance plan. Let me finally just show this last chart. Some say that importation is merely an indirect way of enacting price controls. But the truth is importing prescription drugs into the United States will lower prices here and, in the long run, force Europe to pay more of the drug research and development cost. The best way to break down price controls is to open up markets. I did not say that. That is not a quote from me. That came from Steve Schondelmeyer, who has a Ph.D. and is a pharmacology professor and director of the Prime Institute at the University of Minnesota. He is the one who said the best way to bring down or to end price controls is to open markets. And for those who do not believe it, look back at what happened to the former Soviet Union. When President Reagan went to Berlin and said, Mr. Gorbachev, if you mean what you say, come here to Berlin and tear down this wall. And he knew better than anybody that markets, and as he said, markets are more powerful than armies. What ultimately brought down that wall more than anything else was they could not hold back free markets. And, my colleagues, neither can we. Finally, let me just say that when we talk about how much Americans pay for research, and the drug companies are all saying, well, if we bring down the prices in the United States, and incidentally we believe that if we just open up markets we will see prices of prescription drugs in the United States come down by at least 35 percent, but some people say, well, if that happens, we are not going to have any money to spend on research. My colleagues, people need to know how much we subsidize research in the United States. We often hear that the United States, the American people, represent roughly 4 percent of the world's population, and we consume 20 percent of the world's energy, and we consume 30 percent of the world's paper, and 30 percent of this and 22 percent of that. But, my colleagues, most people do not know this. We may represent 4 percent of the world's population, but we represent 44 percent of all the dollars spent on basic research. Americans are paying more than their fair share for the cost of research. We subsidize that research in three separate ways here in the United States, and we all need to be aware of this: first of all, we subsidize it through government-paid research. This year, we will spend roughly $21 billion in basic research through the NIH, the National Science Foundation, and others. Twenty-one billion for basic research will come out of this Congress and go into research, which ultimately the pharmaceutical companies know much of that research they can use to their benefit at no cost. The results of that research is published on the Internet and is available to everybody essentially free of charge. The second way we subsidize them is through our Tax Code. Now, if they are profitable companies, and these are the most profitable companies in the Fortune 500, they are at a 50 percent tax bracket. So 50 percent of the research right off the top is written off on their Federal tax forms. Now, on top of that, many times they get tax credits. Some of them have moved their operations to Puerto Rico, where they pay no taxes; and as a result, we are subsidizing them through the Tax Code in several ways. Finally, we subsidize in the prices we pay. When we are paying two, three, four, five times as much as they pay in Europe for exactly the same drugs, we are paying more than our fair share for all of the cost of research. We ought to pay more. And let me just say that, and I have said this on the House floor, and I will say it again and again. I am more than willing as an American consumer, and as a public policymaker and a Member of Congress I think Americans ought to pay our fair share. I appreciate what the pharmaceutical industry has done. I appreciate the miracle drugs they have come out with. I am willing to pay more than the starving people of central Africa, but I am unwilling to continue to subsidize the starving Swiss. The time has come for Europe, for Canada, for Japan, and the other industrialized countries around the world to pay their fair share. And the easiest, simplest, fastest, least bureaucratic way to do that is to open up the markets. I will repeat again to congressional leaders: If you mean what you say about free trade, whether we are talking about blackberries, whether we are talking about blueberries, whether we are talking about bananas, whether we are talking about pork bellies, or whether we are talking about Biaxin, then come here to the floor of this House, come here and tear down that wall, because that is the way we are going to bring down prices. When we do that, it will be much easier for us to provide the kind of coverage that Americans need, particularly seniors in Medicare, if we can come up with a plan that will reduce those prices. Mr. Speaker, with that, I yield to my close friend and dear colleague, the gentleman from the great State of Georgia (Mr. Kingston), who has been a fighter in this battle for a number of years with me.

Mr. GUTKNECHT. I will give an even better example. Go down to the Mint here in the United States capital, just a few blocks down here. They print $1 bills. What I am saying is the difference between one sheet of $1 bills will be no different than the next sheet.

Mr. GUTKNECHT. I mentioned this earlier. The Food and Drug Administration does keep pretty good records, and we know that thousands of people have become ill and died as a result of eating imported foods that were contaminated with some kinds of food-borne pathogens. As best we know, with the latest numbers we have over the last 10 years, the number of people who have died as a result of taking a legal drug imported from an industrialized country, that number is zero.

Mr. GUTKNECHT. Here is what is interesting. Again, this is not my number, but this is what outside experts have told us, that if you just do reimportation, just reimportation, allowing seniors or anyone to go to their local pharmacy and at least price-shop from country to country to get the best price on the same drug, our estimate is you could save 35 percent. Now, 35 percent of $1.8 trillion is $630 billion. That would go a long ways to helping to pay for the prescription drug coverage for those people who are currently falling through the cracks. We are talking about real money. I think Everett Dirksen said a billion here and a billion there, and pretty soon you are talking about real money. $1.8 trillion times 35 percent, $630 million is a whole lot of money. I want to congratulate our colleagues for the bill we passed last week. There are a lot of good things in it. But I do want to chastise them on this. The author of that bill stood here in front of this very microphone and said his plan would save about $18 billion over 10 years. Well, that is good. $18 billion versus $630 billion. I will ask America which program they want.

Mr. GUTKNECHT. Right.

Mr. GUTKNECHT. We only have about 1 minute left. I want to thank the gentleman for joining us for this special order tonight. I certainly agree with the gentleman. I think it is time we do something in terms of covering those seniors falling through the cracks, but I think as I said, and the gentleman and I both said at a news conference a few days before the vote on that bill, that the real issue is affordability. If we are to do our job and effectively deal, we cannot sustain this kind of a chart. With 19 percent increases in the costs of prescription drugs and 3.5 percent increases in Social Security cost-of-living adjustments, that just cannot last. We have to do more on the affordability side so that we can do more on the coverage side, and reimportation, reforming the FDA, reforming the tort liability laws, making it easier for generic drugs to come on the market, all of those things will go a long ways toward making prescription drugs affordable here in the United States. We are willing to pay our fair share in terms of the research for those prescription drugs, but the time has come to say to the rest of the world, we are not going to continue to subsidize the starving Swiss.

Mr. GUTKNECHT. Again, these are not my numbers, I am not making these things up. The only thing we have done in terms of real raw research is we had these drugs brought in Europe, and we found out what they were in Northfield, Minnesota, for the same drugs. But the other charts came from the Life Extension Foundation. This number comes from the Congressional Budget Office, and they are the official scorekeeper of what they think things are going to cost as we go in the future. Now, they could be wrong. They could be high, they could be low. But this is their best guess in terms of how much seniors will pay for prescription drugs over the next 10 years. That is $1.8, and then a zero - zero - zero - zero - zero - zero - zero - zero - zero - zero. It is $1.8 trillion.

Mr. GUTKNECHT. Of $1,000 bills. And to get to $1 trillion, how high?

Mr. GUTKNECHT. That is just people over 65. That is just seniors. That does not include you and me and our kids and grandkids and whomever, all the other people.

Mr. GUTKNECHT. Yes.

Mr. GUTKNECHT. Zero. Not one. And let me say that we pay a very dear price for what apparently is no real protection.

Mr. GUTKNECHT. Mr. Speaker, I think it definitely needs to be part of the solution. I think part of the reason that health care costs are so high in the United States relative to the rest of the world is the fact that we have literally allowed this jackpot justice. Now, I do not think that the manufacturers of any of these drugs have intentionally put those drugs on the market knowing that they were going to have these adverse consequences to whatever percentage of the people who take them. I think they have put these drugs on the market in good faith believing that the patients would receive a real health benefit from taking these drugs. My view of tort liability is much more restrictive. I am not an attorney. I do not play one here in Congress. I do not think the gentleman is one, either. I think we have allowed this whole system to go out of control, and we all pay for it. They have a much more restrictive system in Europe, and that is part of the reason the drug companies are willing to sell the drugs for considerably less in Europe than in the United States. So long term, this needs to be part of the solution.

Mr. GUTKNECHT. One million $1,000 bills would be 4 inches high?

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise to talk about prescription drugs as well, and I have to acknowledge that some of the points made by our colleagues on the other side of the aisle are exactly right. It is unfortunate that we are brought here tonight to discuss a bill that, as is true with every bill, is not perfect. And there are a lot of things about this bill that I do not like, but I want to talk tonight about what I think are the most glaring omissions from this bill. As we talk about prescription drugs, as we talk to our constituents, the one theme that comes through to us over and over again is that the prices are just going through the roof. And it is not just from seniors at our town hall meetings. It is from business people, big business people. We had a meeting the other day with one of the representatives of one of the largest corporations in the United States. They are spending $1 billion a year on prescription drugs. They are spending $1 million a week on just one name-brand drug. I am very concerned about the glaring omission in this bill, because we do not deal, I think, effectively with the most serious problem and that is the price. People cannot afford it. Whether someone is on Medicare, and we are going to try to create this insurance benefit, that will be good; but what about a middle-aged parent trying to support three kids and one of them gets a serious illness and needs $1,000 a month worth of prescription drugs? What are we going to do for them? Well, the answer is, almost nothing. Let me talk about the differences between what Americans pay. I have used this chart so much that it is starting to get frayed and worn out, but let me just give a couple of examples. Glucophage, a very important drug. A person does not have to be a senior citizen to have diabetes in the United States. Twenty-seven percent of our expenditures for Medicare are diabetes related, but a lot of people have to take Glucophage. Look at what we pay in the United States. These are not my numbers. This is according to the Life Extension Foundation. The average price, according to their study for Glucophage, for a 30-day supply in the United States is $124. That same drug sells in Europe for $22. We did some of our own basic research. We sent some people out. These are illegal drugs, my colleagues. According to the FDA, I am holding up illegal drugs because they were bought in Germany and Italy. But they are the same drugs we buy here in the United States. Let us talk about this one. Claritin. Very commonly prescribed drug. This drug, Claritin, in a pharmacy in my district, this exact same drug, made in the same plant under the same FDA approval, in my district sells for $64.97. This same drug was bought a week ago in Germany for $13.97, American equivalent. That is 14.8 Euros, in case you are keeping score at home. Another very commonly prescribed drug, an important drug, Zocor. This drug in the United States, at a pharmacy in my district, we checked just the other day, sells for $45. This little box of pills, $45. This same drug purchased in Italy 1 week ago is 14.77 Euros, or $13.94 American. My colleagues, we have a serious problem with prescription drugs. Everybody agrees to that. We have to do something to help those seniors who are currently falling through the cracks. Everybody agrees on that. But, my colleagues, I submit if we do not do something serious about opening markets, about creating competition, about allowing our pharmacists to reimport these drugs and allowing Americans to have access to world drugs at world market prices, then it is not shame on the pharmaceutical industry, it is shame on us. We are the ones that set that policy. We are the ones that let it happen. Unfortunately, I am going to be put in a position in the next day or two where I am going to have to make a tough choice. I am going to have to choose between staying loyal to my leadership or being loyal to what I know is true. I hope I do not have to make that choice. Ultimately, we cannot allow this chart to continue. Shame on us if we do. We are going to have an important vote here on the floor of the House, and I hope leadership is listening. We had a tough vote today on trade. But if Members really believe in free trade and open markets, then come down here to the well of the House. Come down here, Mr. Speaker, and tear town this wall. Allow Americans to have access to world drugs at world market prices. The time has come for Americans to stop subsidizing the starving Swiss. Let us have free markets and lower prices, and then we will be able to afford to give Americans the kind of coverage that they deserve.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise again today to talk about the high cost of prescription drugs and, more importantly, the difference between what we in America pay for those same drugs and what they pay in other parts of the industrialized world. I have a chart here, and again, I want to remind my colleagues, these are not my numbers. I did not invent this chart. This chart was developed by some people who have been studying this issue for decades, and disparities get worse by the year. And here we see some of the most commonly prescribed drugs in America. Let me point out a couple of them. Cipro, a drug that we became very familiar with last year when we had the scare over the anthrax, and let me say that Tommy Thompson did a very good job in negotiating with the German maker Bayer, we sometimes call it Bayer, and we got a very good price for the Federal Government, but if someone is a normal individual and they need Cipro, they need that antibiotic Cipro, in the United States average price for a 30-day supply of Cipro is $87.99. That same drug in Europe sells for half that price, less than half, $40.75. Let us look at another drug that is important to diabetics, one of the most commonly prescribed drugs in the United States or in the world, Glucophage. The average price in the United States $124.65. That same drug made in the same plant under the same FDA approval in Europe sells for an average of $22. I think we should pay our fair share for prescription drugs. We ought to pay our fair share of the cost of developing those drugs, but I do not think we ought to have to subsidize the starving Swiss, and that is what is happening today. It is not shame on the pharmaceutical industry, it is shame on the FDA, and it is shame on us. It has been said that consistency is the hobgoblin of little minds. Next week we are going to have two very interesting debates on the floor of this House, one about trade promotion authority. We are going to have people come to the well of this House, and they are going to talk about how important it is that we have free trade, that we ought to have open markets, that we ought to allow our markets to work. In fact, some of them may even quote the former President Ronald Reagan when he said that markets are more powerful than armies. Some of those same people are going to come to the floor of the House the next day, and they are going to say, well, we need open markets, but not when it comes to pharmaceuticals, not where it can really save Americans billions of dollars. And it really is billions of dollars, because according to the estimates by the Congressional Budget Office, seniors over the next 10 years in the United States of America, that is, people 65 and over, are going to spend $1.8 trillion on prescription drugs. They cannot afford that, and neither can the taxpayers. It is time to open the markets and allow Americans to have access to these world drugs at world market prices and let us talk about the savings. The estimates that we have from independent experts is that Americans could save 35 percent minimum simply by opening up the markets and allowing Americans to have access to those drugs at world market prices. What does that mean? If we take $1.8 trillion, divide it evenly over the next 10 years, that is $180 billion a year. If we could save 35 percent, how much is that? That is over $50 billion a year, $50 billion a year, and we have arguments here on the floor about tax cuts. How much good would we do if we gave Americans a $50-billion-per-year tax cut? That is what we are talking about if we simply open the markets. There is something wrong when we allow our own FDA to stand between American seniors and lower prescription drug prices. We ought to pay our fair share, but we should not be held hostage to the big drug cartels that are exploiting their market opportunities here in the United States at the expense of seniors, at the expense of taxpayers, and incidentally, I had a meeting this morning, at the expense of the big corporations. One of the largest corporations in the United States, one of the representatives told me today they spend $1 billion a year on prescription drugs. They are spending $1 million a month on just one name-brand pharmaceutical each month, $1 million a month just on one drug. Even they are starting to say, wait a second. We believe in open markets. We believe in free markets. We believe in competition. It is time to open the markets, create some competition so that we do not have these huge disparities between what Americans are required to pay for the same drugs, made in the same FDA-approved facilities. Let us have that debate next week about free markets. I believe in free markets. Let us have that debate about making it easier for all Americans, not just seniors, to pay for the drugs they need. No senior should have to choose between food and prescription drugs. We can go a long way simply by opening markets, allowing world markets to work, allowing that thing that we talk about and will talk about next week, free trade, to work to the advantage of American consumers. We could save American consumers $50 billion a year.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise again to talk about an issue that we are all painfully aware of and more and more of my colleagues are concerned about, and that we are going to have to deal with here in the next several days in the Congress, and that is the high cost of prescription drugs. I brought with me again this chart, and I would like to show to my colleagues what we are really talking about in terms of the prices that Americans pay relative to people in other parts of the world. These numbers are not my numbers. They were put together by a group called the Life Extension Foundation. I want to point out a couple that I find interesting. Glucophage, a very commonly prescribed drug for diabetes, one of the most commonly prescribed drugs in the United States. In the United States, a 30-day supply, according to Life Extension Foundation, sells for about $124.65. That same drug made in the same FDA-approved facility in Europe sells for $22. $22. We are not talking about Mexico; we are talking about Europe. The list goes on and on, and, for example, tomorrow we are going to have a vote, I think, here on the floor of the House about trade, about trade promotion authority. We are going to give our negotiators a little more latitude in negotiating with the Senate. I happen to believe in trade. I believe in free and fair trade. But this is one area where American consumers could benefit enormously. Our estimates are if we simply opened up markets, allowed American consumers to prescription drugs at world market prices, we could save American consumers upwards of $60 billion a year; $60 billion a year. Even here in Washington, that is real money. What does that mean to the average consumer? For example, my father takes a drug called Coumadin. The United States, the average price is $64.88. That is a interesting number in itself, because 2\1/2\ years ago when we started doing these charts, that price was not $64.88, it was $38. In just the last 2\1/2\ years, that drug, and nothing has happened, they have had no new FDA approval they have had to go through, as far as we know there has been no litigation, but the price of the drug has gone from $38 to $64, and, interestingly enough, in Germany you can buy that drug, the same drug, made in the same plant, for $15.80. How long? How long will we hold American consumers hostage? The time has come for Congress to take action. And I am here today not to say, shame on the pharmaceutical industry. They are doing what any capitalistic organization would do, and that is they are exploiting a market opportunity. And are they exploiting it big time. It is not shame on them, Mr. Speaker, it is shame on the FDA, and it is shame on us for allowing this to go on. And we cannot afford it. We simply cannot afford to continue to subsidize Europe and the Western nations. I believe that Americans should pay their fair share of the cost of developing these miracle drugs. The pharmaceutical industry has done some wonderful things for us, the American people, and the people of the world, and I think we ought to pay our fair share. But we subsidize those companies in several ways. We subsidies them through the research dollars we spend here in Washington through the NIH. It will be about $22 billion this year. We represent about 4 percent of the world's population. We represent 44 percent of the basic research dollars being spent, and that research is available to the pharmaceutical companies free of charge. We subsidize them through the Tax Code. When they do this research, when they invest that money that they say they spend in research, they get to write it off on their tax forms, and in some cases they get a tax credit, so there is no cost to these companies. Finally, we subsidize them in the prices we pay that are outrageously too high relative to the rest of the world. No, Mr. Speaker, I think we as Americans ought to pay our fair share, but I am unwilling to continue to subsidize the starving Swiss. We are going to have a big debate next week about prescription drugs and what we can do about it, and it is time we stepped to the plate and said there is one thing we can do right now with virtually no bureaucracy, with virtually no cost to the taxpayers, that will save American consumers upwards of $60 billion a year, and that is open the markets. If you believe in free markets, if you believe in NAFTA and GATT and TPA and all of that, if you really believe in free trade, then open up the markets, allow American consumers, working through their own pharmacists, that is my view, to go to markets, whether it be in Germany or Switzerland or Japan. For any FDA-approved drug in the United States made in an FDA-approved facility, you ought to have access to that no matter where it comes from. I will tell you what is going to happen. You are going to see the prices in the United States go down dramatically, and you will probably see prices in the other parts of the world go up a little but, but that is how markets work. One of my favorite Presidents was President Ronald Reagan, and he said something so powerful 30 years ago: Markets are more powerful than armies. You cannot hold back markets, and you cannot have a situation where the world's best consumers pay the world's highest prices. Not shame on the pharmaceutical industry, shame on us. We have a chance next week to do something about it. I hope Members will join me.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I want to come back to something that the gentleman from Georgia just said, and I think it is an important comment. What we are talking about now is the prescription drug benefit under Medicare that will benefit seniors, and it will benefit seniors. We are going to put $350 billion into a program and that clearly will benefit seniors. But it will do nothing for those families right now who are struggling to pay for expensive drugs because they have a sick child. That is where, if we allowed reimportation, we could dramatically bring down the price of drugs, not just for seniors, but for everybody.