Debbie Stabenow

Ms. STABENOW

Ms. STABENOW. But does that mean you will, in the future--as opposed to what has happened in the past--object to anything that comes to the floor, any amendment that comes to the floor that has not gone through the committee process? I would be interested in knowing if, in fact, that is your position.

Ms. STABENOW. Will the Senator yield?

Ms. STABENOW. It is difficult for me to know where to begin with all of this what I view as misinformation. I will at least clarify what I believe to be the facts regarding the situation in the bill and, beyond the bill, the general issue regarding the pharmaceutical industry. I ask unanimous consent that Senators Clinton and Leahy be added as cosponsors of the amendment.

Ms. STABENOW. I find it interesting, there is great concern about expanding discounts to people who are not on Medicaid. Do you know what is unfair in this country right now? The only people who pay retail, the only people who pay the highest prices in the world are people who are uninsured. No insurance company pays retail. Every insurance company, including Blue Cross Blue Shield, or any company, gets a discount. The States as well--when we buy for the VA hospital, the Federal Government--we negotiate a discount. Under Medicaid, we have given the States the ability to get what is, frankly, a modest discount--15 percent on brand name drugs, 11 percent on generics. So they don't pay retail. Nobody pays retail. Everybody gets a discount, except for one group--the uninsured in this country. The majority of those using prescriptions who are uninsured are our senior citizens--the seniors and the disabled of this country. How unfair that we would think they, too, should get a discount. This amendment only affects those who are uninsured. Why? Because everybody else already gets a discount. So if you vote no on this, you are saying this system right now that allows States to get discounts under Medicaid, the Federal Government for the VA, Blue Cross Blue Shield, and every other system--our own insurance system as Federal employees, we don't pay retail--if you vote no, you are saying the only people who don't deserve a discount from retail are uninsured seniors and families. The folks who are not seniors--most of those who are uninsured work and they work for small businesses. Those small businesses are struggling every day to provide health care and they are seeing premiums go up 30 to 40 percent a year, and most of that is because of prescription drugs. This is a modest amendment. This is an amendment that simply says our States that are struggling right now, both to pay for Medicaid and also to provide some kind of lower cost prescriptions for their citizens, mostly seniors who don't have insurance, ought to be able to use the creativity of a State, the great ``laboratories of democracy'' that I hear about all the time from my colleagues on the other side of the aisle--let them continue to do what they are doing, be creative to lower prices. I might just quote something that was quoted earlier today by my colleague from Massachusetts, and that is my own Governor of the State of Michigan, who is leading the National Governors Association. We have meeting now Governors who are concerned about prescription drug costs and wanting to provide programs for their citizens, being sued, many of them, because they want to expand the discount for lower prices, to be creative like Maine and Vermont. We had from Governor Engler: The Nation's Governors are extremely disappointed with the course of action chosen by PhRMA, said NGA chairman Michigan Governor John Engler. It is unfortunate that their organization feels compelled to use the court system to manipulate public policy. With pharmacy costs alone rising 15 to 20 percent each year, all purchasers, including the manufacturers themselves, are using tools that manage costs while maintaining quality and access to affordable pharmaceuticals. That is about an optional program to say to the States: If you choose to be creative and use your leverage under Medicaid to expand a discount to people who do not get a discount, who are the only people who do not get a discount, who are the uninsured, mostly seniors, that you can do that. I commend the administration because under this administration, the Bush administration, the Solicitor General, Theodore Olson, went to court in support of the Maine plan. He said in his brief: The initiative should be allowed to go forward without further intervention. Olson argued: States enjoy a broad measure of flexibility in tailoring the scope and coverage of their Medicaid plans and that court review of Maine Rx was not warranted. I commend him and the administration for stepping in on the side of States rights, which is what this is all about. This is about States rights. It is not about concerns about the pharmaceutical industry. I understand they will fight everything, they have been fighting everything, they will continue to fight everything. There is no question about that. We fully expect their arguments to be put forward on this floor. I wish to make two other points; that is, when we talk about the industry as a whole and the concern that maybe the uninsured would get the same discounts as people with insurance, and what that would do to the poor pharmaceutical companies, we need to look at what the real picture is today economically with this industry as we are concerned about making sure our seniors pay, when they walk into a local pharmacy, the highest prices in the world. A study that was put out yesterday by Families USA shows some startling comparisons. We all want research. We want those new lifesaving drugs. Unfortunately, 80 percent of the new patents being approved by the FDA are ``me too'' drugs, not new lifesaving drugs, but we want those. I am deeply concerned about the direction of the companies. The pharmaceutical company is more about being a sales machine, sales and marketing, quarterly reports and profits than about creating new lifesaving drugs, and that is of deep concern to me as to the future for all of us in health care. A number of companies were outlined yesterday. As an example, Merck spends 5 percent on research and development; 15 percent profits last year, there were three times more profits than what was spent on R&D; and 13 percent was spent on advertising, marketing, and administration. It is almost three times as much on advertising and marketing and three times more in profits than they are spending on R&D. Pfizer received 1\1/2\ times more in profits than they spent on research and development, more than two times more on advertising, marketing, and administration than on research and development. It is a pattern that continues. R&D is not the top expenditure of the companies today. When we look at the individuals, it is difficult for me, representing the great State of Michigan where people work hard every day for a living, most people working hard for that paycheck, concerned about their kids, whether they are going to be able to send them to college, whether they can afford their health care, working hard every day, and then we hear we cannot possibly lower prescription drug prices, we cannot possibly even get them down to the rate of inflation--they are going up an average of three times the rate of inflation--we could not possibly give a 15-percent discount to uninsured seniors. Then we look at the numbers, and we see astounding salaries in the drug companies. I mentioned this morning--not to be personal but this is public information--the comparisons are astounding. The former chairman and CEO of Bristol-Myers, $74.9 million last year in earnings and, in addition, $76.1 million in unexercised stock options. We have been talking in this Chamber about corporate responsibility and integrity and, I would argue, morality. What is the morality of huge, tens of millions of dollars in salaries and huge amounts of profits, and when we say just get the prices in line so people can afford these new lifesaving drugs so they are not cutting the pills in half, taking them every other day--worst yet, not affording them at all--and we are told, no, nothing can be done, nothing can be done. They fight every single attempt to rein in prices or expand coverage. This is a fundamental battle, I believe. I think we are needing to help an industry save itself and get back to its soul, which is research and development in new drugs, and to get back in touch with the American people. I commend the States that are involved right now. They are close to the people. They are close to the people in their States and they know, they hear the stories every day, and they are trying to do something. They want us to act. I do not know if we are going to be able to get this all the way through. I certainly hope so, and I will do everything I can humanly do to work with my colleagues to make it happen. In the meantime, the States are trying to help. We have 30 States that are doing something in the area of prescription drugs trying to help, and we have States being sued by the drug lobby because they are trying to help. I will simply say, as we bring this debate to a close, that this is an amendment that does not force a State to do anything. It only affects the States that want to expand their drug discounts to those without coverage. It is an issue of flexibility. The administration has gone on record in support of the Maine project which we use as an example of what can be done, and we appreciate that. It will stop unnecessary litigation. I know there is a great deal of concern by my colleagues about unnecessary litigation. It will allow States to stop spending money on litigation and put money in essential services, such as being able to make available prescription drugs to their citizens. I hope my colleagues will join in support of this bipartisan-- tripartisan--amendment this evening and send a message that we support our States and we support their right to be involved in putting together efforts to lower prices and make lifesaving medicine available to their citizens. I ask for the yeas and nays on my amendment.

Ms. STABENOW. I suggest the absence of a quorum.

Ms. STABENOW. I would argue that that is not the case, absolutely not. Under the program right now, States operate with companies, and I don't have any indication whatsoever that it is going to increase the cost of Medicaid. I certainly would have to object to that.

Ms. STABENOW

Ms. STABENOW. Mr. President, I ask unanimous consent that the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism of the Committee on Commerce, Science, and Transportation be authorized to meet on Thursday, July 18, 2002, at 9:30 a.m., on perspective on improving corporate responsibility.

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, July 18, 2002 at 10:00 a.m., in SD-226. tentative agenda I. Bills.--S. 486, Innocence Protection Act [Leahy/Smith]; H.R. 3375, Embassy Employee Compensation Act [Blunt]; S. 862, State Criminal Alien Assistance Program Reauthorization Act of 2001 [Feinstein/Kyl/Durbin/ Cantwell]; S. 2395, Anticounterfeiting Amendments of 2002 [Biden/Hatch/ Leahy/Feinstein/DeWine]; S. 2513, DNA Sexual Assault Justice Act of 2002 [Biden/Cantwell/Specter/Clinton/Carper]. II. Resolutions.--S. Res. 293, A resolution designating the week of November 10 through November 16, 2002, as ``National Veterans Awareness Week'' to emphasize the need to develop educational programs regarding the contributions of veterans to the country. [Biden/Kohl].

Ms. STABENOW. Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet on Thursday, July 18, 2002 from 9:30 a.m.-12:00 p.m. in Dirksen 628 for the purpose of conducting a hearing. THE PRESIDING OFFICER. Without objection, it is so ordered. Select Committee on Intelligence

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry Subcommittee on Production and Price Competitiveness be authorized to conduct a hearing on July 18, 2002 in SR-3328A at 2:00 p.m. The purpose of this hearing will be to discuss S. 532, the Pesticide Harmonization Act. THE PRESIDING OFFICER. Without objection, it is so ordered. committee on commerce, science, and transportation

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Thursday, July 18, 2002, at 11 a.m. on examining Enron: Enron Energy Services and its role in the western state electricity crisis. THE PRESIDING OFFICER. Without objection, it is so ordered. committee on commerce, science, and transportation

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on Thursday, July 18, 2002, at 2:30 p.m. on the nomination of Frederick Gregory to be Deputy Administrator of NASA, Kathie Olsen and Richard Russell to be Associate Directors of OSTP. THE PRESIDING OFFICER. Without objection, it is so ordered. committee on energy and natural resources

Ms. STABENOW. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on Thursday, July 18, 2002 at 10:00 a.m. and 2:30 p.m. to hold a closed hearing on the Joint Inquiry into the events of September 11, 2001. THE PRESIDING OFFICER. Without objection, it is so ordered. Subcommittee on Consumer Affairs, Foreign Commerce and Tourism

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet on Thursday, July 18, 2002, at 10:00 a.m. to conduct a hearing to hear from the following nominees: John S. Bresland to be a Member of the Chemical Safety and Hazard Investigation Board, and Carolyn W. Merritt to be a Member and Chair of the Chemical Safety and Hazard Investigation Board. The hearing will be held in SD-406.

Ms. STABENOW. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Thursday, July 18, 2002, at 10:00 a.m. in Room 485 of the Russell Senate Office Building to conduct a hearing on a bill to approve the settlement of water rights claims of the Zuni Indian Tribe in Apache County, Arizona, and for other purposes. I also ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Thursday, July 18, 2002, at 2:00 p.m. in Room 485 of the Russell Senate Office Building to conduct a hearing on S. 2065, a bill to Ratify an Agreement to Regulate Air Quality on the Southern Ute Indian Reservation.

Ms. STABENOW

Ms. STABENOW. I am wondering if my friend might also respond then to the well-known practice now that the companies are spending 2\1/2\ times more on advertising than they are on research and development, and how you might feel about that.

Ms. STABENOW. I appreciate the ability for us to debate this important issue. I am wondering, as a result of what you have described, and I appreciate the sympathies for drug companies, if you then support the fact that the average pharmaceutical drug for Americans is going up three times the rate of inflation?

Ms. STABENOW. Will my friend yield?

Ms. STABENOW. Will my friend from Pennsylvania yield?

Ms. STABENOW. The trading of drugs is probably more highly regulated than any kind of trade. I am wondering if my friend would also object to all the food that comes into the United States from Canada and other countries. We have foods and vegetables coming in every day. We have bottled water and alcoholic beverages coming in. We have all kinds of things that go back and forth across the border from a lot of countries that are not regulated nearly as much as prescription drugs. I am wondering if the Senator is also concerned about or would object to that kind of trade as well.

Ms. STABENOW. Mr. President, will the Senator yield for a question?

Ms. STABENOW. Will my friend from Oklahoma yield for a question?

Ms. STABENOW

Ms. STABENOW. Madam President, this is a very important second-degree amendment that not only will help our seniors be able to lower the prices they pay for prescription drugs, as my colleagues have said. I thank the Senator from Minnesota for his ongoing leadership on this issue and, of course, the Senator from North Dakota for his sponsorship and ongoing leadership and advocacy, as well as my other colleagues who are cosponsoring this amendment. This not only affects our seniors, this affects everyone. It affects the president of Michigan State University, who called me about his health clinics and his college of medicine looking for ways to be able to lower prices so that he does not have to deal with possibly laying off more staff, which he had to do this year as a result of the dramatic increases in the health care costs at the university. It addresses the big three automakers, small businesses, families, and everyone who is paying exorbitant prices for prescription drugs. I want to start by quoting our President, President Bush, when he was a candidate for President. He indicated that he thought this idea was a good idea. He said: Allowing the new bill that was passed in the Congress made sense to allow for, you know, drugs that were sold overseas to come back and other countries to come back into the United States. That was what then-candidate George W. Bush and now President Bush said makes sense. It does make sense. It made sense before. The problem before was that there was an amendment added which basically killed our ability to be able to do this. We know that same amendment which is supported by the pharmaceutical industry will be offered later. There will be an attempt to kill it again. But we are hopeful that our colleagues will join with us in what is a very reasonable proposal that addresses any legitimate issues regarding safety and health and allow us to open the border to Canada and be able to provide the kind of competition we need to lower prices. I think it is important also to reiterate that at a September 5, 2001, hearing before the Senate Commerce Committee's Subcommittee on Consumer Affairs, William Hubbard, FDA Senior Associate Commissioner, testified: I think as a potential patient, were I to be ill and purchase a drug from Canada, I would have a relatively high degree of confidence in Canadian drugs. We know the Canadian system is similar to ours as it relates to the regulatory and safety system. We feel very confident that this modest proposal of simply opening the border to Canada--and we know that Canada right now exchanges goods and services with us every single day. We have the largest port of entry in Detroit, MI, which I am proud to represent, with over $1 billion in goods going across. We trade every day with them. We believe this proposal will allow one thing to be traded which is desperately needed by our citizens and is not now allowed to go back and forth across that port of entry. It makes sense. This is a reasonable, modest proposal. Instead of opening all of our borders, some would argue that this does not go far enough; that we should open to Mexico, Europe, or other places around the world. But we are taking a modest step to begin to show that this kind of approach can work. We want to simply start with Canada with a very modest approach that will allow us to be able to share with our neighbors to the north the ability to bring back to our citizens American-made prescription drugs which are sold in Canada. I think this is an issue of fairness as well because we are talking about prescription drugs on which we helped to underwrite research. As I have said so many times, $23.5 billion this year alone was given by the taxpayers of this country. And I support that strongly. I support having that be a higher number. I think basic research into new potential treatments is absolutely critical and is a good investment. But we are making those investments. We are then giving that information to the drug companies, that pick up the information and then proceed to do their own research and development. We allow tax writeoffs for that research and development, tax credits, and tax reductions. We subsidize them further. We allow up to 20-year patents so they can recover their costs because we know it costs a lot to research and develop new drugs. So we let them be able to recover those costs without competition for their name brand. So we highly subsidize--highly subsidize--this area; the most profitable industry in the world, highly subsidized by American taxpayers. Then what do we get at the end of that process? The highest prices in the world. One of the reasons is we close the borders to competition. And we are subsidizing heavily all of the research and development of new medications that the Canadians enjoy, that people around the world enjoy, while we in fact pay the highest prices in the world. I have had an opportunity to take a number of bus trips to Canada; the latest was on June 10 of this year. I will just share with you some of the differences. My colleagues have talked about that as well. But it is shocking to take a mere 5-minute bus trip across a bridge or through a tunnel and see the dramatic differences in prices. I might add, I am not interested in continuing to put people on buses or in cars to have to go over to Canada to get those lower priced medications. What we want is the ability to bring them back, so that the neighborhood pharmacy can offer these same kinds of prices. That is what this is all about, to bring them back and place them in the local pharmacy. But it is shocking when we look at the differences. Zoloft is an antidepressant drug. In Michigan, it costs $220.65 for a monthly supply; in Canada, $129.05. So it is $220 versus $129. That difference can buy food, pay the electric bill, pay the rent, it can be the difference between someone having a quality of life that makes sense and one that involves struggling every day to pay for their medications. We also know one of the most dramatic differences is tamoxifen, which I have spoken about here before. Tamoxifen is a breast cancer treatment drug. When we went to Canada, we were able to get it for $15. And back in Michigan it is $136.50. If you have breast cancer and you are struggling to pay for your medications to get the treatments you need to deal with all of the other issues in your life as well, the difference between $15 and $136 a month is a big deal. That is why this amendment is a big deal. I hope our colleagues will join overwhelmingly in our amendment--which is, in fact, a bipartisan amendment, a tripartisan amendment--to say: Yes, it is time to be fair to Americans. This is about fairness for Americans. It is about competition. It is about opening the border in a way that maintains safety for our citizens. I would like to speak to a couple of the arguments that I know we will hear from colleagues who are opposing this amendment and what the drug companies have said. The drug companies have said that bringing those prescription drugs back from Canada is not safe. For the record, drugs are already frequently imported into this country, but predominantly by the companies themselves, by manufacturers. I also note that individual consumers now are allowed to bring back up to a 90-day supply. Because of the concerns that have been raised, they have looked the other way at the FDA and allow people, for personal use, to bring back up to a 90-day supply. In fact, according to the International Trade Commission, $14.7 billion in drugs were imported into the United States in the year 2000, and $2.2 billion in drugs sold in Canada were originally made in the United States. So it is ironic that the drug makers are saying that drugs cannot safely move between the borders of the two countries. They do already. The issue is price. The issue is who controls them moving back and forth. When the companies want to move them back and forth, they think it is fine. When the pharmacists want to move them back and forth or individuals want to move them back and forth and get a lower price, it is not fine. They are the same medications. It is a question of who controls them. In fact, in recent years the FDA has allowed thousands of American consumers to import from Canada medications for their personal use every year. The FDA Senior Associate Commissioner, as I said before, indicated that as a consumer he would have a relatively high degree of confidence in drugs purchased from Canada. So these arguments do not make sense. The arguments we will hear about safety do not make sense. We will hear that safety standards in Canada are more lax than here in the United States. There was a September 2001 report by the nonpartisan Congressional Research Service--which we all use--which confirms that the United States and Canadian systems for drug approval, manufacturing, labeling, and distribution are similarly strong in all respects. Both countries have similar requirements and processing for reviewing and improving pharmaceuticals, including ensuring compliance with good manufacturing practices. Both countries also maintain ``closed drug distribution systems'' under which wholesalers and pharmacists are licensed and inspected by Federal and/or local governments. All prescription drugs shipped in Canada must, by law, include the name and address of each company involved along with the chain of distribution. Let me finally address one of the other myths I am sure we will hear more about today, and that is that somehow our bill will allow Canada to become a conduit for counterfeit or contaminated drugs into the United States. On the contrary, this bill provides for safe protections, many of which are not in current law. We go beyond current law, which we all know needs to be done now as we look at so many areas of homeland security. We have gone beyond what is currently in place. If implemented, this bill would have the potential to decrease, more than today, the possibility of allowing counterfeit drugs into the United States. We would provide there be strict FDA oversight, proof of FDA approval of imported medicines. There must be a paper chain of custody, which is important. Only licensed pharmacists and wholesalers would be able to import medications for resale. They would have to meet requirements for handling as strict as those in place by the manufacturers--equally strict as what the manufacturers do today. There will be lab testing to screen out counterfeits, registration with Canadian pharmacists and wholesalers by HHS. There will be lab testing to ensure purity, potency, and safety of medications. We also say that the Secretary of Health and Human Services can immediately suspend this provision, immediately suspend the importation of prescription medicines that appear to be counterfeit or otherwise violate the law. We have made it very clear that they can immediately suspend ``on discovery of a pattern of importation of the prescription drugs or by the importer that it is counterfeit or in violation of any requirement under this section or poses an additional risk to the public health''-- they can immediately suspend. This is a responsible provision. It is a moderate provision. It opens the border to a country that we trade with every day, whose system is similar to ours. It allows actions if in fact anything is found to create a threat to Americans in terms of our health and safety. It allows immediate action and suspension of this new provision. I believe we have put into place something that is reasonable. It is logical. It is long overdue. I am hopeful that we will have a strong bipartisan vote. If we want to lower the prices immediately, without much, if any, expenditure of taxpayers' dollars--if we want to do it immediately--all we have to do is drop the barrier at the border to Canada. I urge my colleagues to join us.

Mrs. STABENOW

Mrs. STABENOW. I thank the Chair, I yield myself up to 15 minutes under the agreement.

Ms. STABENOW

Ms. STABENOW. Madam President, I thank our leader, the Senator from Massachusetts, who is such a stalwart and passionate advocate on this issue. I wish to respond to one of my colleagues as to one of the reasons why I think this bill is being held up. I think it is being held up because it is not supported by the pharmaceutical industry. We know there are six drug company lobbyists for every Member of the Senate. It is clear they would prefer the House plan, which they helped to write. I would, once again, share with my colleagues a quote that was in the Washington Post when the House plan was passed: A senior House GOP leadership aide said that Republicans are working hard behind the scenes on behalf of PhRMA [the pharmaceutical lobby] to make sure that the party's prescription drug plan for the elderly suits drug companies. I believe the reason the bill is being held up is that, in fact, our prescription drug plan does not suit drug companies. Our prescription drug plan is written for the seniors and the disabled of America. Our plan for lowering prices through the generics bill and through other options, to increase competition, is to make sure that prices are lower for everybody. The small business, which has premiums skyrocketing, and which has difficulty affording health care coverage for its employees, would see a major change as a result of our efforts to lower prices and create more competition. The manufacturers in my State would see decreases as well. So, in fact, what we have are two distinct views of how to proceed. One, as was indicated in the paper, is a plan for the elderly that suits drug companies. We will have various versions of it on the floor. But I would argue that those fighting proceeding to a real Medicare plan are doing so because our plan does not suit the drug companies. One of my major concerns is there is so much money that is going into this effort to promote the House plan--the drug company plan. What does the drug company plan do in the end analysis? When we look at this, they are asking the senior citizens of our country, up front, to pay a $250 out-of-pocket deductible before they get any help. Then, out of the first amount of money, the beneficiary would pay $650 to get help with $1,100. But then the beneficiary would continue to have to pay while they have a gap in coverage. They would pay $2,800 when they received no help in the middle here, as shown on the chart, in order to get some catastrophic help at the end. So what does this mean? It means, out of pocket, the average beneficiary will pay $3,700 to get $4,800 worth of help. I am not that great on math, but I would suggest that, in fact, the $3,700 out of pocket for $4,800 is not that great a deal. I would suggest it is not that great a deal for the average person. I have read a number of stories in this Chamber; one last night was of a gentleman who had an $800 a month income and his prescription drugs were $700 a month. This will not help him. This will not help the individual, the average individual who is struggling to pay their bills versus getting their medicine every day. We have a better plan, a plan that will, on average, pay for 65 percent of the bill, which is a good start. It is a good step forward. It would not have a deductible. It would be a voluntary plan that would make sense and lower prices. I realize my time is up, but I would like to also join with my colleagues in advocating that we get on with the business of real Medicare coverage and lowering prices for everyone. Thank you.