<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:87228.wais]
INTERNATIONAL PRESCRIPTION DRUG PARITY: ARE AMERICANS BEING PROTECTED
OR GOUGED?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RIGHTS AND WELLNESS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
APRIL 3, 2003
__________
Serial No. 108-12
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
87-228 PDF
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER,
NATHAN DEAL, Georgia Maryland
CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of
TIM MURPHY, Pennsylvania Columbia
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN R. CARTER, Texas CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota ------
MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont
(Independent)
Peter Sirh, Staff Director
Melissa Wojciak, Deputy Staff Director
Randy Kaplan, Senior Counsel/Parliamentarian
Teresa Austin, Chief Clerk
Philip M. Schiliro, Minority Staff Director
Subcommittee on Human Rights and Wellness
DAN BURTON, Indiana, Chairman
CHRIS CANNON, Utah DIANE E. WATSON, California
CHRISTOPHER SHAYS, Connecticut BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida (Independent)
ELIJAH E. CUMMINGS, Maryland
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Mark Walker, Staff Director
Beth Clay, Professional Staff Member
Mindi Walker, Clerk
Tony Haywood, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on April 3, 2003.................................... 1
Statement of:
Hubbard, William K., Senior Associate Commissioner, Food and
Drug Administration, accompanied by John Taylor, Chief,
Enforcement Group.......................................... 21
Wennar, Elizabeth A., president and CEO, United Health
Alliance, principle, Healthinova; Andy Troszok, vice
president, standards, Canadian International Pharmacy
Association; and Robert M. Hayes, Medicare Rights Center... 90
Letters, statements, etc., submitted for the record by:
Burton, Hon. Dan, a Representative in Congress from the State
of Indiana,
AARP bulletin............................................ 75
Prepared statement of.................................... 6
Hayes, Robert M., Medicare Rights Center, prepared statement
of......................................................... 113
Hubbard, William K., Senior Associate Commissioner, Food and
Drug Administration:
Prepared statement of.................................... 33
Web site posters......................................... 23
Troszok, Andy, vice president, standards, Canadian
International Pharmacy Association, prepared statement of.. 105
Wennar, Elizabeth A., president and CEO, United Health
Alliance, principle, Healthinova, prepared statement of.... 94
INTERNATIONAL PRESCRIPTION DRUG PARITY: ARE AMERICANS BEING PROTECTED
OR GOUGED?
----------
THURSDAY, APRIL 3, 2003
House of Representatives,
Subcommittee on Human Rights and Wellness,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:03 p.m., in
room 2157, Rayburn House Office Building, Hon. Dan Burton
(chairman of the subcommittee) presiding.
Present: Representatives Burton, Gutknecht, Sanders,
Tierney, Duncan, Watson, Cannon, Shays, and Cummings.
Staff present: Beth Clay and John Rowe, professional staff
members; Mark Walker, staff director; Nick Mution, press
secretary; Mindi Walker, clerk and legislative aide; Tony
Haywood, minority counsel; and Jean Gosa, minority assistant
clerk.
Mr. Burton. Good afternoon. A quorum being present, the
Subcommittee on Human Rights and Wellness will come to order.
I ask unanimous consent that all Members' and witnesses'
written and opening statements be included in the record.
Without objection, so ordered.
I ask unanimous consent that all articles, exhibits, and
extraneous or tabular material referred to be included in the
record. Without objection, so ordered.
Congressman Gil Gutknecht has been a leader in the House on
drug reimportation issues and has agreed to join us today.
I appreciate your being here, Gil, so much.
Mr. Gutknecht. Mr. Chairman, I appreciate your having this
hearing.
Mr. Burton. Thank you. And I ask unanimous consent that
Congressman Gutknecht be permitted to serve as a member of the
subcommittee today. Without objection, so ordered.
We will have also Congressman Joseph Crowley, we believe,
and Congressman John Duncan, who is from the full committee,
here I guess some time before too long. Congressman Crowley
we'd like to be able to serve, as well. Congressman Duncan is a
member of the full committee but not our subcommittee, and we
want to allow him the courtesy of being here.
Given that this is the first hearing of the subcommittee,
all my colleagues aren't here, but I will mention them. We're
going to have Chris Cannon of Utah, Congressman Chris Shays of
Connecticut, and Congresswoman Ileana Ros-Lehtinen of Florida
on our subcommittee, and on the Democrat's side of the aisle
we'll have Diane Watson as the ranking minority member and
Congressman Bernie Sanders of Vermont and Congressman Elijah
Cummings of Maryland, who will also be serving. During my
tenure as chairman of the full committee, each of these Members
was very active and involved in our health oversight hearings,
and I am very pleased that they are going to be joining me on
this subcommittee.
It is often the case that Congress acts as a fulcrum
seeking to find the appropriate balance between opposing
parties on key policy discussions. The subject of today's
hearing is no different. On one side of the debate is the
importance of preserving the free enterprise system. The
pharmaceutical industry tells us that it now takes between $500
and $800 million to bring a drug to market.
We are also being joined by Mr. Tierney.
This estimate is a bit misleading, though. While the actual
costs of research and development on bringing a single drug to
market can be high, the actual dollar figure is much less. Only
10 to 30 percent of the products in development actually make
it to the marketplace, so companies add the cost of failed
products into the R&D of drugs that ultimately are approved;
thus, the American consumer, by and large, shoulders the cost
associated with drug research and development.
On the other hand, Congress must consider the needs of
American consumers to have access to safe and affordable
prescription drugs. As many as 108 million Americans have one
or more chronic health conditions such as diabetes, high blood
pressure, asthma, and heart disease, and many require
prescription drugs to manage these conditions. Of Americans age
50 to 64, 75 percent are on at least one resource drug, and 14
percent of women age 65 are on five prescription drugs in any
given week.
As we all know, the price of prescription drugs is higher
in the United States than in any other country in the world. As
one mechanism to address this issue, in the year 2000 Congress
overwhelmingly passed and the President signed into law the
Meds Act to allow U.S. consumers, pharmacists, and wholesalers
to purchase FDA-approved prescription drugs on the
international market. However, the FDA has never implemented
this law.
Today's hearing is focusing only on consumers' access to
prescription drugs purchased from Canadian pharmacies. One of
the witnesses we will be hearing from today is Mr. William
Hubbard, Senior Associate Commissioner of the FDA. Mr. Hubbard
was quoted in the media 2 weeks ago as saying that anyone
facilitating Americans importing prescription drugs from Canada
faced potential civil and criminal liability. He went on to say
insurance companies and health plans that pay for prescription
drugs purchased outside the United States may be violating the
law.
Now, you know, that sounds pretty strong, but, you know, I
want to take a couple of words that he said. He said they faced
potential--potential. Nevertheless, the civil and criminal
liability scared people. And then he went on to say, ``those
who aid and abet a criminal violation of the act or conspire to
violate the act can be found criminally liable.'' And he also
said that those who aid and abet may be violating the law. He
said, ``Insurance companies and health plans that pay for
prescription drugs purchased outside the United States may be
violating the law.''
Well, the law was pretty clear. It was passed by Congress
and signed by the President, but the President had some
concerns about making sure that the FDA was watching what was
coming in. And that's what we want to ask about today--whether
or not the FDA is working with the Canadian Government to make
sure that the drugs coming into this country are safe.
It is my understanding that the drug companies in Canada
are policed very, very stringently, and so in some cases their
dealing with the pharmaceutical industry up there is even
tighter than what the FDA here in the United States does.
He went on to state that, ``We, the FDA, believe that
virtually all drugs imported to the United States from Canada
by or for individual U.S. consumers violate the U.S. law.''
We're going to ask about that today because the law is pretty
clear. What the FDA has not done is they have not worked with
Canada, and so they are saying that their interpretation is
that, because the FDA hasn't worked with Canada and checked
these drugs out one at a time or checked with their counterpart
in Canada, that the consumers are violating the law.
I, for one, am very puzzled about this. How can the FDA
officials feel that Americans are violating U.S. law when 3
years ago this law was signed by the President? And this bill
clarified that it was legal for Americans to purchase
prescription drugs internationally. But we're only talking
about Canada today, and we're talking about Canada because they
are our neighbor and because a lot of seniors, well over a
million Americans--and most of them are seniors, I believe--are
buying their pharmaceuticals from Canada.
We're a country with three branches of government--
judicial, executive, and legislative. It is not the FDA's job
to make law. It is not the FDA's job to make law. It is
Congress' job to pass laws and the executive branch to sign
them and they're to enforce them, and it is their
responsibility to implement the laws that Congress passes, and
that includes the Meds Act, which was signed 3 years ago. So
far the FDA has shirked its responsibility in this area, and
this needs to change. The FDA claims they cannot implement this
law because they cannot assure the safety of the products being
shipped into the United States.
I understand that the gentleman from the FDA brought a
bunch of drugs in from countries around the world where they
were counterfeits, but they weren't from Canada. We were
talking about Canadian drugs. It is very well policed up there
by their drug agencies.
I believe that the FDA needs to do some innovative, out-of-
the-pillbox thinking. Health Canada's regulatory model offers
safeguards to ensure the safety of products for Canadians. Last
week, Mr. Hubbard told me that he was not aware of a single
incident that an American had been harmed by a product
purchased in Canada. They did mention one in Oregon--one in
Oregon. We have found that aspirins and other drugs sold over
the counter in this country cause more problems than one in
Oregon caused by a Canadian pharmaceutical.
Obviously, if the FDA wanted to find a solution to
implementing the law they could, and I am pleased today that we
are going to be hearing from a number of people. Congressman
Roger Zion was going to be with us, but unfortunately I guess
he has a health problem and he's not here today. We'll also
hear from Mr. Robert Hayes of the Medicare Rights Center in New
York; Dr. Elizabeth Wennar from the Coalition for Access to
Affordable Prescription Drugs; and Dr. Andy Troszok, the vice
president of standards for the Canadian International
Pharmacists Association. They'll be giving us information on
their perspective, and he will be giving information from the
Canadian perspective.
Earlier this year GlaxoSmithKline sent letters to Canadian
pharmacies threatening to suspend shipments to them if they
continued to sell drugs to American consumers. Now, the reason
they did that was because they don't make as much money in
Canada. They still make a profit, but they don't make as much
money in Canada as they do here in the United States. In fact,
I don't think they make as much money selling drugs any place
in the world as they do here in the United States. So what they
were doing is they were fighting this on the issue of profit
and loss.
It's interesting to me that the FDA at almost the same time
was saying that they had concerns about drugs coming in from
Canada. You might wonder why the FDA would be bringing the
subject at the same time that GlaxoSmithKline was trying to
stop selling drugs to pharmaceutical companies in Canada
because they don't make as much profit. GlaxoSmithKline seems
to be using strong-arm tactics.
Now, this is kind of interesting because GlaxoSmithKline,
during very tough economic times last year, had a 15 percent
growth rate, and I believe Congressman Sanders said they made
$10 billion. Is that what you said, they had $10 billion in
sales?
Mr. Sanders. Just $9 billion, Mr. Chairman.
Mr. Burton. Just $9 billion. And their CEO is making $20
million a year.
Just last week a member of their firm told me that even
with Canada's price controls GlaxoSmithKline makes a profit,
just not as much as they make in the United States. So I have
cosponsored legislation with Congressman Sanders and 54 other
legislators--and we believe we'll have a lot more--that will
institute monetary fines on pharmaceutical companies that
reduce access of Americans to lower-cost drugs via the Internet
from Canadian pharmacies. And I hope the FDA will try to work
with the Canadian Government to make sure that they are in
concert with us as far as importing drugs to the United States.
I invited Mr. J.P. Garnier, the chief executive officer of
GlaxoSmithKline to testify at the hearing today; however, he
declined to participate or even to submit testimony. Had I
still been chairman, I would have subpoenaed him, but the Chair
of the committee chose not to subpoena him, so we'll have to
make do with
an empty chair when we start questioning GlaxoSmithKline. His
unwillingness to participate at the subcommittee today I think
speaks volumes.
I want to thank you all for coming. I look forward to
hearing from our witnesses.
[The prepared statement of Hon. Dan Burton follows:]
[GRAPHIC] [TIFF OMITTED] T7228.001
[GRAPHIC] [TIFF OMITTED] T7228.002
[GRAPHIC] [TIFF OMITTED] T7228.003
[GRAPHIC] [TIFF OMITTED] T7228.004
[GRAPHIC] [TIFF OMITTED] T7228.005
[GRAPHIC] [TIFF OMITTED] T7228.006
Mr. Burton. I now recognize the minority member,
Congressman Diane Watson. Since she is not here, I'll go ahead
and recognize Mr. Sanders. Mr. Sanders.
Mr. Sanders. Mr. Chairman, thank you very much for holding
this important hearing. And the truth is, we owe you a real
debt of gratitude because there are not many Members of
Congress who are prepared to stand up to the most powerful
lobby in this country, and that is the pharmaceutical industry.
This is a huge issue, and I really do thank you for holding
this hearing.
The high cost of prescription drugs and what that is doing
to the health and well-being of Americans and senior citizens
is something that I have been involved with for many, many
years. In 1999, in order to help Vermont citizens, I led the
first effort to take constituents over the Canadian border to
purchase medicine at a fraction of the price that they were
paying in the United States. And I will never forget as long as
I live the women who were with me who were struggling with
breast cancer and who purchased tomaxaphin, Mr. Chairman, which
is a widely prescribed breast cancer drug, for one-tenth the
price, 10 percent, the same, exact medicine. And these women,
many of whom did not have a lot of money, could not believe
that.
Several years ago I introduced reimportation legislation. I
know Mr. Gutknecht and I have worked together on various pieces
of legislation in that area which would have allowed Americans
to purchase FDA-approved drugs anywhere in the world. While a
variation of this legislation was passed in Congress and, as
you indicated, is still in existence, we've got to work out
some of those loopholes that remain in there. And, as you've
just indicated, you and I and others are working on legislation
to stop Glaxo and other companies from limiting their supplies
to Canada. We have 54 cosponsors on that legislation.
Let me briefly describe what this problem is, what we're
talking about today, and why this hearing is so important.
More and more Americans are dependent upon prescription
drugs to maintain their health and well-being and to keep
themselves alive. At the same time, more and more Americans
simply cannot afford the outrageously high prices that the
pharmaceutical industry is charging them. While Americans pay
by far the highest prices in the world for their medicine, the
pharmaceutical industry, which receives huge tax breaks and
subsidies from the U.S. Government, continues to be the most
profitable industry in this country and provides huge
compensation packages to their CEOs. In 2001, the industry's
profit as a percentage of revenue, Mr. Chairman, was 18.5
percent. Not too many businesses that you and I know make 18.5
percent profit.
I will submit information for the record on the
compensation issue, but I would point out here, for example,
that C.A. Hinebold, Jr., former chairman and CEO of Bristol
Meyers Squibb in 2001 received total compensation of over $150
million in 1 year. Elderly people all over this country are
suffering and in some cases dying because they cannot afford
the high cost of prescription drugs. One executive receives
$150 million in 1 year from one of the largest drug companies
in this country.
In addition, in order to protect their profits and make
certain that nothing is passed in Congress which protects the
American people and lowers the cost of prescription drugs, the
industry has spent hundreds of millions of dollars in the last
few years on campaign contributions, lobbying, and advertising.
If you can believe it, the industry has over 600 paid
lobbyists, including former top leaders of the Democratic and
Republican parties, in their payroll in order to stop Congress
from doing anything to lower the cost of prescription drugs and
protect the American people.
Mr. Chairman, in recent years Americans have begun to
express their disgust and anger with the pharmaceutical
industry and with the high cost of prescription drugs by
utilizing the marketplace. When they understand that they can
purchase the same exact medicine in Canada for up to 90 percent
less than they are paying at home, they are beginning to flock
into that market. Estimates are, as you have indicated, that up
to 1 million Americans are either going across the border to
buy their medicine or are using the Internet. In recent years,
dozens and dozens of new international Internet pharmacies have
sprung up in Canada to serve that market.
And what has been the response of the pharmaceutical
industry to that reality? Have they said, ``Well, maybe we
should stop ripping off the American people and lower our
prices?'' The answer is no. Their response, as you have just
indicated, is to say, ``Uh-oh, we had better do something about
the fact that more and more people are going to Canada, and
what we want to do is close that border, close that opportunity
for Americans to buy safe and affordable prescription drugs in
Canada.''
As you indicated, quite appropriately, I don't think it was
a coincidence that on 1 day Glaxo says, ``We're going to limit
the supplies to Canada,'' and then a few days later guess what
happens, the FDA suddenly says, ``Oh, we are really interested
in this issue, really concerned about the safety issue.'' The
argument that the drug companies and their allies--including,
I'm afraid to say, the FDA--are giving is that they are
concerned about the safety issue and their desire to protect
the health and well-being of the American people.
In my view, this position is absolutely false and without
merit. The truth is that all of the medicine being provided to
Americans by registered pharmacies in Canada is highly
regulated and that the Canadian pharmaceutical drug regulatory
system is quite as strong as what exists here in the United
States.
Interestingly--and you made this point, Mr. Chairman--
despite the fact that some 1 million Americans who are now
buying medicine in Canada, there is not, to the best of my
knowledge, one instance in which adulterated or unsafe medicine
has been sold to an American. But if the FDA is interested in
health and safety, then let me tell you what you may want to
take a hard look at.
Today in the United States one out of five Americans are
not taking the medicine that their doctors prescribed because
they cannot afford that medicine. One out of five. That, Mr.
Chairman, is a huge health and safety issue. In fact, I intend
to ask the GAO for a study to give us an estimate of how many
Americans are dying because they cannot afford the outrageously
high cost of prescription drugs that are being charged.
I also want to know in that study how many Americans are
seeing a deterioration in their health and an increase in
suffering because they can't afford the medicine that they
desperately need. My guess is that the answer will be thousands
of Americans are dying, tens of thousands of Americans are
seeing the deterioration in their health care because they
can't afford the high cost of medicine. And meanwhile the FDA
is running to worry about medicine coming in from Canada where
zero Americans have been negatively impacted. Now, why is the
FDA working with the drug companies to stop Americans from
buying medicine in Canada?
And let me just speak for myself on this issue. I think the
answer is obvious. I think that the drug companies are now
asking for payback time. They have contributed huge amounts of
money to the political process to protect their profits, and
now they are calling in those chips, and I think that this is
sad and it is outrageous.
Mr. Chairman, let me conclude by simply saying that if you
and I think that the situation is bad today, think about what
is happening right now in America. In Vermont, in
Massachusetts, in Oregon, all over this country, because of
huge deficits that State governments have, they are cutting
back on the subsidized prescription drug programs that exist
right now.
I will introduce into the record a newsletter from a senior
citizen center in Medford, MA. And what the senior citizen
center says is that in Massachusetts the State program is no
longer welcoming seniors into the program, and if you want to
get reasonably priced prescription drugs go to Canada. And now
what the FDA is saying to those elderly people who are going to
be thrown off of their State programs, ``You've got an option.
You could die. You get sick. But you can't get safe and
affordable drugs from Canada.'' That is an outrage.
I thank you very much, Mr. Chairman, for holding this
hearing.
Mr. Burton. Thank you, Mr. Sanders.
Mr. Duncan.
Mr. Duncan. Well, thank you very much, Mr. Chairman. I will
be very brief. Let me first say that I appreciate very much you
calling this hearing on this issue that is so very, very
important to so many Americans at this time and has grown by
leaps and bounds in importance every day and every year in this
country. And I want to commend you, Mr. Chairman, because you
have a consistent record of calling for hearings and trying to
do things about the problems that are of greatest concern, I
think, to average Americans throughout the Nation.
Mr. Gutknecht has given me a publication--he gave it to me
a few days ago--that said that the CBO, the Congressional
Budget Office, has estimated that American seniors will spend
over $1.8 trillion on prescription drugs over the next 10
years. And I can tell you that this is a problem that is of
concern to more than just seniors. While they buy the highest
percentage of the drugs in this country, still the younger and
middle-aged people are having to spend many, many billions on
prescription drugs, and then also baby boomers see what is
happening to their parents who are going through medical
problems and are thinking about some of these problems and
their retirements and so forth themselves, possibly for the
first time.
I have come here today to try to learn a little bit more
about this. I'm not the expert on this problem that you are,
Mr. Chairman, and Mr. Gutknecht, who has done such great work,
and Mr. Sanders, but I will tell you that I have seen in many
different industries the more highly regulated an industry
becomes the more it ends up being controlled by the big giants,
because when the rules and regulations and red tape become so
strangling, the small businesses and medium-sized businesses
just don't have a chance. And I think that most people at least
have the impression in this country that the FDA and the drug
industry is controlled by a few big giants, very much to the
detriment of the consumers in this country.
And I can tell you this is one of the major--this is one of
the very top concerns of my constituents in Tennessee. And I
don't represent some Appalachian poverty district; I actually
represent a district where the economy is pretty good and
average incomes and so forth that are about the national
average or maybe even slightly above. And I can tell you that
something is going to have to be done.
I look forward to working with you, Mr. Chairman, and Mr.
Sanders and Mr. Gutknecht to try to see what we can do to do
something for the American people in regard to these drug
prices that in many cases have become almost outrageous or
obscene in some ways.
I yield back the balance of my time.
Mr. Burton. Thank you very much, Judge Duncan.
Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chairman. Mr. Chairman, thank
you for your graciousness in allowing me to join you today,
even though I am not on this particular subcommittee. I think
you know of my interest, as well as the interest of the other
Members here, all of whom I congratulate, along with yourself,
for that prolonged and constant interest that I think is
focusing the light on this issue that cannot be shut out.
We have to stay persistent on this and we have to move on
this. Mr. Sanders' comments were right on the money from
beginning to end, and he has been a champion of this, as have
you, Mr. Chairman.
We have, amongst the Members that are here at this
subcommittee meeting today and others in the Congress, a number
of bills addressing the cost issue on prescription drugs.
Whether it is preserving access to safe, affordable Canadian
medicines that was recently filed and many people have signed
onto it, or whether it is Tom Allen's H.R. 1400 that talks
about having prescription drugs for all seniors at a price that
is no higher than the average drug in Canada, France, United
Kingdom, Spain, Italy, or Japan--however we try to come at this
problem, we seem to be getting more and more people signing on
because all of the factors that Mr. Sanders and you addressed
in your opening statements are becoming more and more evident.
Not too long ago another subcommittee of this Government
Reform Committee, one on which I do sit, had hearings in
Boston. Chairman Shays, Mr. Lynch, I, and others were at that
hearing and had members of the Veterans Administration in to
testify about the program that they run, how they purchase
prescription drugs for veterans and the enormous savings that
are involved in doing it the way they do it because they are
able to buy for such a large market and negotiate for the
companies. We do that for veterans. We do that for Native
Americans. We do it in medicine. And but for the resistance of
the prescription drug companies and their champions, we could
do it for Medicare, and that would solve an issue for a lot of
seniors who are otherwise shut out of affordable prescription
drugs and run into all of the circumstances enumerated in Mr.
Sanders' statement.
I think the most disturbing part of this is the continual
drum beat we hear from the industry and from those who are, in
my estimation, much too close to the industry, although they
are supposed to be regulating them and having oversight over
them, and that is this drum beat for market forces.
The fact of the matter is that this is an industry that
does not operate under pure market forces and the public is
finally catching onto this, and I think as we move forward
people are going to realize that there has to be a quid pro
quo. There are patents that these companies get and they hold
them for a substantial number of years, which essentially gives
them a monopoly. That is not a pure market force. That is
something that the public at large, through its representatives
in government, give to those companies to encourage them to
invest in research, to encourage them to develop prescription
drugs, and to make and return a reasonable profit for their
efforts.
In addition to that, by some estimations they receive
almost one-half of their research and development moneys
through the National Institute of Health and other Government
sources, and yet they want to talk about an open and free
market.
Fact of the matter is that this Congress is derelict in its
duties if we don't start demanding back for those things that
the American public has given them--patents, given them
research moneys and cooperation in every other way, providing
through taxpayers money an FDA program that enhances the value
of their products by having a system that establishes what is
safe. It is taxpayer money and it is inuring to the benefit of
that company, of those companies.
For all of those reasons, we ought to be able to demand
that they make a reasonable profit, and certainly that we don't
impinge on the abilities to have good research and development
for more prescription drugs that will be of assistance to
people. But we ought to be able to set up a system that
protects research and development through some regime and
allows a reasonable profit while at the same time insisting
that, in return for all the benefits this industry is getting,
the American people get a fair, affordable price and that they
can access these necessary medical prescription drugs.
Mr. Chairman, I just want to end on that note and thank you
again and all the other Members that are here today for their
continued insistence on this. Sooner or later we will put
together a majority and it will be tripartisan in this body and
we will get the American people so riled up that something will
have to be done.
The FDA, if you really want to put your efforts toward
safety, my request of you is don't tell us how you can't bring
prescription drugs in over the Internet and don't tell us how
you can't reimport them; tell us how you are going to take
action to protect the efforts of the American people to use the
Internet and to reimport at affordable prices until the
prescription drug companies are otherwise brought into the fold
and made to produce drugs that are accessible and reasonably
priced.
Thank you very much.
Mr. Burton. Would the gentleman yield?
Mr. Tierney. I certainly would yield.
Mr. Burton. One thing that I meant to say in my opening
remarks is that we are going to pass a prescription drug
benefit paid for by the taxpayers of this country before too
long, and when we do that I want to make sure that the
taxpayers, who are going to be paying for an awful lot of these
prescription drugs, are getting the best price that they can,
because it is paid for by all the taxpayers, not just the
people getting those prescription drugs.
So I am very, very concerned that once we pass that
prescription drug benefit the pharmaceutical companies, who
charge more here in the United States than any place in the
world, are going to be loading all that profit on the back of
taxpayers with the complicity of the Food and Drug
Administration, and that really, really bothers me because
you've got one agency that is paid for by the taxpayers getting
money from the taxpayers, and then the taxpayers funding not
only them, who is supposed to be their watchdog, but they are
also funding the profits from the pharmaceutical companies.
Mr. Tierney. Reclaiming my time, those are excellent
points. You know, we've had legislation filed here. A notable
thing is how long the industry resisted putting this program
into Medicare because they didn't want any constraints on their
ability to charge. And we had various pieces that came to the
floor of the House. One provision, in fact, had language that
would disallow any effort to control price, and another
provision in a separate bill that would insist that, in fact,
if it went in Medicare, that Medicare did use some means of
trying to bring these prices under.
Either these insurance companies have left totally without
any regulation at all are going to bankrupt individual seniors
one by one by one, or if they get into some system where the
Government assists in the purchase of prescription drugs for
seniors or others and there are no controls on the price and
the profits that they can get while they're getting all these
other benefits from the taxpayers' money, they will bankrupt
this Government in one large chunk. So we have an obligation
here specifically and particularly while we are producing such
benefit for them through public taxpayer dollars to make sure
that the regulation is there.
This is one instance where I think my friends on both sides
of the aisle here understand that some regulation is necessary
and Congress ought to get about the business of deciding what
is appropriate.
I yield back.
Mr. Burton. Mr. Gutknecht, you have been a champion of this
for a long time, and so we are joining your cavalry.
Mr. Gutknecht. Mr. Chairman, I just would like to also
thank you on behalf of Mr. Sanders, and especially myself who
have essentially been laboring in this vineyard for a very long
time. It has been very difficult to get some of the committee
chairmen to take this issue seriously, and it is a very serious
issue. It is huge.
When you look at the numbers, as the gentleman from
Tennessee mentioned, our own Congressional Budget Office
estimates that seniors, alone, will spend $1.8 trillion on
prescription drugs over the next 10 years.
I've got a chart, if we can have that put up. I'll just
point out--and these are not my numbers. They are a number of
independent groups. This is from the Life Extension Foundation.
You all have a little copy of this chart in the little handout
I put out. I'll just point out a couple of things.
The differences between what American consumers pay and
what consumers in the industrialized world pay for the same
drugs--just look at the first four. Augmentin is a very
commonly prescribed drug. The U.S.' average price for a 30-day
supply is $55. In Canada that is $12, and in Europe the average
price is $8.75. Cipro, a drug that we learned a lot about when
we had anthrax here in these buildings, the average price in
the United States is almost $88, the average price in Canada is
$53, and in Europe that same drug sells for $40.
Incidentally, let me mention, Mr. Chairman and Members,
that these drugs are essentially made in the same plants under
the same FDA approval, so we're not talking about something
different in Europe and Canada. These are the same drugs under
the same FDA approval.
Glucophage, a very important drug for diabetes, in the
United States, according to Life Extension Foundation and their
research, about $124 for a 30-day supply. That same drug in
Canada is $26, and in Europe the average price is $22. We're
talking about enormous differences.
Mr. Sanders and I may not agree on everything, but we agree
that there is something wrong with a system that allows those
huge disparities, and in his discussion Mr. Sanders mentioned
the drug tomaxaphin, a very important anti-cancer drug. Most of
the basic research, most of the cost was done by the NIH. The
bulk of the costs that were ultimately shouldered by the
pharmaceutical company that patented it were for attorneys and
for marketing, not for research and development. That's a very
important drug for women here in the United States, and it is
an example where we pay disproportionately more for the same
drug, even though the drug was developed principally at
taxpayer expense.
The arguments we are going to hear and we have heard
consistently are about safety, but these are just specious
arguments. Once you get below the surface and scrape off that
thin veneer, you find out that it is, in fact, first and
foremost the Food and Drug Administration, and every day this
country imports millions of pounds of food.
Let me give you some examples. Last year the estimate is we
estimated--we are told that we brought in 331 million pounds of
apples. We brought in 19 million pounds of blueberries into the
United States. We brought in 1.2 billion pounds of asparagus.
We brought 64 million pounds of strawberries into this country.
We imported over a billion pounds of cantaloupes. The reason I
mention that is, according to the FDA's own studies--and the
FDA ultimately is responsible for the health and safety of
those products coming into the United States--by their own
estimates of these fruits and vegetables coming into the United
States, their own tests, 2 percent of these products are
contaminated with food-borne pathogens, including things like
salmonella. Now, salmonella can kill you, and yet what is the
FDA's response to foods coming into the United States? Almost
nothing.
And Mr. Sanders is absolutely correct--the FDA keeps very
good records, and as far as we can tell there has not been a
single death related to importing of legal prescription drugs
into the United States. As a matter of fact, the only real
example that we can find where you have adulterated drugs was
done by a pharmacist in Kansas City, MO, not in Alberta,
Canada, not in Mexico, not in Europe. It happened in Kansas
City, MO. That pharmacist, Robert Courtney, is currently
serving a 30-year sentence in a Federal penitentiary.
So the idea of safety it seems to me is grossly overstated.
And I want to make this point, and it is made by Steve
Shondelmeyer, who really is the top expert in the United States
on pharmacies and pharmaceutical costs. He is a professor at
the University of Minnesota, and this is a quote I hope you'll
remember--``A drug that you cannot afford is neither safe nor
effective, and we are forcing too many seniors, too many
Americans to make a choice they should not have to make because
they cannot afford the drugs that are available.''
Finally, let me just say--and I've already spoken longer
than I should. But again Mr. Sanders is correct--this is not an
issue between Republicans and Democrats. This is not even an
issue between right and left. This is an issue of right versus
wrong. It is wrong to force American consumers to pay the
world's highest prices, because, after all, we are the world's
best consumers.
The real answer it seems to me is to open up markets, to
de-fang the FDA, to allow American consumers to have access to
world-class drugs at world market prices. We should not permit
our own FDA to stand between American consumers and lower drug
prices. It is not really a matter of shame on the
pharmaceutical industry, but for Members of Congress it is a
matter of shame on us. We have allowed this system to exist. It
is time for us to do something about it, and when we do we can
save American consumers upwards of $600 billion over the next
10 years.
Again, thank you, Mr. Chairman, for having this hearing.
This is an important beginning. I think it is going to yield
important results for American consumers.
Thank you very much.
Mr. Burton. Thank you for all your work, Mr. Gutknecht.
You've done a great job in the past and I know you will
continue.
Mr. Cannon.
Mr. Cannon. Mr. Chairman, thank you for holding this
hearing. It is a very important hearing. I apologize that I
can't be here longer, but I did want to ask unanimous consent
to submit an opening statement for the record and some
questions for the record.
Mr. Burton. Sure. No problem.
Mr. Cannon. Thank you very much. I'll stay here as long as
I can.
Mr. Burton. Without objection.
Mr. Shays.
Mr. Shays. Thank you, Mr. Chairman. Mr. Chairman, I want to
thank you, as well, for holding this hearing. I'm sorry I
didn't get here to hear the comments of my other colleagues,
but I want to say to Mr. Gutknecht he is a real hero to me on
this issue. And I realize there are reasons why it exist, but
we need to find a solution, and I hope he pursues this. I
believe that we should be having a debate on this issue on the
floor of the House. I think it is disgraceful, frankly, that we
haven't had the kinds of hearings we should on this legislation
and that we haven't been debating it in a very meaningful way.
And let us learn from that debate, but in the bottom line for
me prices are too expensive in the United States, too cheap
elsewhere. I think that because of price controls I think
prices probably need to come up a little bit overseas, they
need to come down over here. And I think this legislation is a
way to help force that issue.
Mr. Burton. Thank you very much, Mr. Shays.
Ms. Watson.
Ms. Watson. Mr. Chairman, I would like to thank you very
much, and as we begin this inaugural hearing of this newly
created Subcommittee on Human Rights and Wellness, let me first
say that I look forward to working with you and all of the
other members of this subcommittee to conduct meaningful
oversight of Government operations in the area of health and
human rights within our jurisdiction.
As the ranking minority member, let me also commend you for
choosing an important issue to start with. We appreciate it.
The problem of discrimination in the pricing of U.S.
pharmaceuticals is well documented, and it is of enormous
consequences to millions of Americans who need affordable
access to prescriptive drugs. Americans pay substantially more
for prescriptive drugs than purchasers in other countries, and
the problem is particularly acute for our Nation's uninsured
seniors. Because Congress has failed to establish a Medicare
prescriptive drug benefit, seniors who do not have private
prescription drug coverage must pay for prescription drugs out
of their pockets. Research by the minority staff of the
Government Reform Committee has shown that seniors in
Congressional Districts across the country pay twice as much
for prescriptive drugs as their counterparts in other
countries. For some drugs, they pay as much as 10 times as
their foreign counterparts.
For these American seniors and the rest of America's 40
million uninsured, this can mean having to choose between going
without food on the one hand or going without their medicine on
the other.
Lower drug prices abroad have led millions of Americans to
purchase drugs from foreign sources. Internet pharmacies, the
subject of a recent full committee hearing, facilitate these
transactions, and their recent proliferation has raised serious
concerns about whether American consumers can receive
appropriate medical supervision.
Mr. Chairman, despite the incessant pharmaceutical industry
complaints to the contrary, research by the committee's
minority staff demonstrates that international pricing
disparities are not explained either by the duration and the
cost of the FDA approval process or by the disproportionate
U.S. research and development cost. It is within our power to
correct this problem if we have the will to do so.
So today we have an opportunity to hear the perspectives of
the FDA, GlaxoSmithKline, and representatives of interested
professional and consumer organizations, including former
Representative Roger Zion, chairman of the 60 Plus Association.
I want to thank all of our witnesses for appearing before us
today, and I look forward to hearing their views on pending
legislative proposals and any other measures they might suggest
to bring before us.
Thank you so much for allowing us this opportunity.
Mr. Burton. Thank you, Ms. Watson.
I look forward to working with you as well as Mr. Sanders
and Mr. Tierney and Mr. Shays and the judge and, of course, Mr.
Gutknecht.
Mr. Hubbard, would you and Mr. Taylor please approach the
table and stand to be sworn?
Do you swear to tell the truth, the whole truth, and
nothing but the truth, so help you God?
Mr. Hubbard. Yes.
Mr. Burton. Be seated. Do you have an opening statement,
Mr. Hubbard?
Mr. Hubbard. Yes, Mr. Chairman. We have written testimony,
but I'll make a few opening remarks, if I may.
Mr. Burton. OK.
STATEMENT OF WILLIAM K. HUBBARD, SENIOR ASSOCIATE COMMISSIONER,
FOOD AND DRUG ADMINISTRATION, ACCOMPANIED BY JOHN TAYLOR,
CHIEF, ENFORCEMENT GROUP
Mr. Hubbard. As you noted, I'm accompanied today by Mr.
John Taylor, the Chief of our Enforcement Group at FDA.
As you know, the emergence of the Internet has given
consumers a new tool to carry out commerce in a number of ways.
One of those uses, the purchase of prescription drugs, offers
convenience, but also particular risk to unknowing consumers.
Seniors in particular are using the Internet to purchase their
medications from sites offering lower prices and are even
traveling to other countries for that purpose, as well. There
is no doubt that some drugs can be obtained more cheaply from
foreign Internet sites and from foreign prescriptions; however,
I should note that generic drugs, while less expensive in the
United States than in many other countries--indeed, 7 percent
less expensive in the United States than in Canada, and our new
Commissioner, Mark McClellan, has made getting generic drugs on
the market for seniors and others a high priority. In fact, he
tells us frequently that we need to get cheaper drugs to
patients, but we need to do it safely.
We certainly understand consumer concerns about the high
cost of drugs. We all know that. But please understand that
FDA's principal job is to ensure the safety of the drugs. We
are not a price agency. And we are very concerned about the
trend toward foreign purchase of drugs, and we'd like to give
you a few examples today of why we are concerned.
Here on the dais--and I believe you have a hard copy--are
some posters of some Web sites. This first one looks like a
very legitimate site with a picture of a physician, a
pharmacist there, and it looks very American, it looks very
legitimate. It says, ``Your source for high-quality, FDA-
approved medication.'' So our investigators have traced this
site to its source. It's in Thailand.
The second one, if Sarah could flip for us, is again a site
offering the drug Acutane, and Acutane is a drug that has very
serious restrictions in this country because of its potential
to cause severe birth defects. It is marketed under what we
call a risk management program, in which very careful warnings
are given for it not to be taken by women of child-bearing age
or women who are pregnant. This site also talks about FDA-
approved products and mentions that the products were made in
New Jersey. This site is in Thailand, as well, and the drugs
that we have purchased from this site come with no warnings to
pregnant women.
The third site I will mention sells Viagra, and it,
interestingly, even gives its address. It is at 164th Street in
Miami Beach, FL. But, in fact, our investigators have found
this site is in Israel.
We have other sites that we have given you in hard copy
that all sell drugs from Canada, and these sites, when our
investigators pursued where they were, they found they were
registered in Barbados. Now, they also say they are in Canada,
but the point is we don't know where they are and we have no
way to reach to them to learn where they are. And if we don't
know where they are, we don't know where they get their drugs.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T7228.007
[GRAPHIC] [TIFF OMITTED] T7228.008
[GRAPHIC] [TIFF OMITTED] T7228.009
[GRAPHIC] [TIFF OMITTED] T7228.010
[GRAPHIC] [TIFF OMITTED] T7228.011
[GRAPHIC] [TIFF OMITTED] T7228.012
[GRAPHIC] [TIFF OMITTED] T7228.013
[GRAPHIC] [TIFF OMITTED] T7228.014
[GRAPHIC] [TIFF OMITTED] T7228.015
Mr. Hubbard. Let me show you, Mr. Chairman, just a few of
the drugs that people buy from these sites. This is one we took
out of the mail yesterday at Dulles Airport. That's what the
patient gets--a bag of pills. It doesn't even give a name of
the drug, no warnings.
Mr. Burton. Where did that come from?
Mr. Hubbard. It came from the International Mail Facility
at Dulles Airport. It was purchased, we believe, over the
Internet and mailed to an individual whose name I will not
mention in Ashford, VA.
Mr. Burton. But where did it come from?
Mr. Hubbard. This drug--the return address it does not
show, I'm afraid, although I have others that do show. I won't
bring all of these out, but let me give you just one example.
The return address on this one is Bangkok, Thailand, addressed
to a person in Durham, NC. Apparently this was addressed to a
person with a female name, and apparently she has bought some
estrogen, some female drugs. But she has also purchased a drug
called phenesteride. This drug is only for men. It is so toxic
that if a pregnant woman even handles the pill from this box
she could cause severe birth defects in her child, and this
seal has been broken. This stuff is crumbling out of here.
So these are the sorts of things that people really get,
Mr. Chairman, when they go on these Internet sites. None of the
drugs that we got from the airport yesterday appear to have
been made in the United States. They all have no labeling or
foreign labeling and appear to be from sources other than the
United States or North America.
Now, we are told that some of the drugs that come from
Canada are, in fact, perfectly safe, and that may be true, but
we don't have any way to know.
One of the best things that Congress ever did, we believe,
was create the drug approval process that set up a process for
drugs to be approved as safe and effective by the FDA and
manufactured under very stringent manufacturing controls with
very stringent marketing controls and regulation by the States
of physicians and pharmacies. Patients in this country have
total confidence they are getting a safe drug. People that buy
these sorts of drugs cannot tell the difference.
And I'll make one last point. In foreign countries--in some
foreign countries half the drugs are counterfeit. These are two
identical drugs. One is real and one is counterfeit. I can't
tell the difference. Our scientists can't tell the difference.
And so if you open up the world to these sorts of drugs, the
bad guys are going to have a way to get in. Right now it is
very hard to market that product in the United States, very
hard to get into the system. But these Internet sites give
patients and nefarious sellers of drugs access to that system.
So with that, Mr. Chairman, I'll take your questions, and
so will Mr. Taylor. Thank you.
Mr. Burton. Thank you.
[The prepared statement of Mr. Hubbard follows:]
[GRAPHIC] [TIFF OMITTED] T7228.016
[GRAPHIC] [TIFF OMITTED] T7228.017
[GRAPHIC] [TIFF OMITTED] T7228.018
[GRAPHIC] [TIFF OMITTED] T7228.019
[GRAPHIC] [TIFF OMITTED] T7228.020
[GRAPHIC] [TIFF OMITTED] T7228.021
[GRAPHIC] [TIFF OMITTED] T7228.022
[GRAPHIC] [TIFF OMITTED] T7228.023
[GRAPHIC] [TIFF OMITTED] T7228.024
[GRAPHIC] [TIFF OMITTED] T7228.025
[GRAPHIC] [TIFF OMITTED] T7228.026
[GRAPHIC] [TIFF OMITTED] T7228.027
[GRAPHIC] [TIFF OMITTED] T7228.028
[GRAPHIC] [TIFF OMITTED] T7228.029
[GRAPHIC] [TIFF OMITTED] T7228.030
[GRAPHIC] [TIFF OMITTED] T7228.031
[GRAPHIC] [TIFF OMITTED] T7228.032
[GRAPHIC] [TIFF OMITTED] T7228.033
[GRAPHIC] [TIFF OMITTED] T7228.034
[GRAPHIC] [TIFF OMITTED] T7228.035
[GRAPHIC] [TIFF OMITTED] T7228.036
[GRAPHIC] [TIFF OMITTED] T7228.037
[GRAPHIC] [TIFF OMITTED] T7228.038
[GRAPHIC] [TIFF OMITTED] T7228.039
[GRAPHIC] [TIFF OMITTED] T7228.040
[GRAPHIC] [TIFF OMITTED] T7228.041
[GRAPHIC] [TIFF OMITTED] T7228.042
[GRAPHIC] [TIFF OMITTED] T7228.043
[GRAPHIC] [TIFF OMITTED] T7228.044
[GRAPHIC] [TIFF OMITTED] T7228.045
[GRAPHIC] [TIFF OMITTED] T7228.046
[GRAPHIC] [TIFF OMITTED] T7228.047
[GRAPHIC] [TIFF OMITTED] T7228.048
[GRAPHIC] [TIFF OMITTED] T7228.049
[GRAPHIC] [TIFF OMITTED] T7228.050
[GRAPHIC] [TIFF OMITTED] T7228.051
[GRAPHIC] [TIFF OMITTED] T7228.052
[GRAPHIC] [TIFF OMITTED] T7228.053
[GRAPHIC] [TIFF OMITTED] T7228.054
Mr. Burton. I want to give you some figures that we found
very interesting. In 1990, the pharmaceutical industry gave
$2.3 million in campaign contributions. In 1992 it was $5
million. In 1994 it was $5.2 million. In 1996 it was $9.3
million. In 1998 it was $9 million. And then in 2000, because
there were questions about a lot of things dealing with the
pharmaceutical industry, it went from $9 million to almost $20
million the last two election cycles. There are 600--over 600
lobbyists up here lobbying the Congress, the administration
about pharmaceuticals, and there are many of us in the Congress
that believe they do have undue influence. And there is also
kind of a revolving door policy where an awful lot of the
people who work at the FDA and our health agencies leave these
agencies and go to work directly with the pharmaceutical
industries. I'll be glad to give you some cases in point if
you'd like to have those, but I think you probably are aware of
that.
Now let me ask a few questions. Your testimony states that
the FDA cannot assure U.S. citizens that prescription drugs
they're buying over the Internet from foreign countries such as
Canada--and that's what we're talking about today--are safe. On
September 5, 2001, you testified before the Senate Committee on
Commerce, Science, and Transportation that you've not looked at
the chain of supply system in Canada. Have you looked at the
chain, Canadian chain of supply system since you testified in
2001?
Mr. Hubbard. We've certainly had discussions with our
Canadian colleagues. However, FDA has no authority to go to
Canada and assess their system.
Mr. Burton. So you haven't looked at it?
Mr. Hubbard. Other than having the Canadian counterpart to
the FDA explain their system to us, no, Mr. Chairman, we have
not.
Mr. Burton. You haven't. Can you make the assertion today
that the Canadian chain of supply system is unsafe for
Americans?
Mr. Hubbard. I would not want to characterize another
country's drug safety system, Mr. Chairman.
Mr. Burton. Well, I know, but you've brought all these
packages in here, mostly from Thailand and every place else,
but you didn't say anything about Canada.
Mr. Hubbard. Well, we'll be glad to characterize the safety
of drugs, but not of another country's drug approval system.
Mr. Burton. How many cases do you know of where Canadian
pharmaceuticals came in this country, caused damage to people?
Mr. Hubbard. We think that is unknowable. How would you
know if hundreds of thousands of patients are taking a Canadian
or any other foreign blood pressure medicine and their blood
pressures are being reduced by 10 points instead of 40?
Mr. Burton. How many people----
Mr. Hubbard. You might not know that for 10 years.
Mr. Burton. How many people were damaged last year by
aspirin? Do you know?
Mr. Hubbard. I don't know, Mr. Chairman.
Mr. Burton. Well, that's sold in the United States.
Mr. Hubbard. Aspirin certainly has----
Mr. Burton. That's over the counter.
Mr. Hubbard. Yes.
Mr. Burton. You don't know that, either?
Mr. Hubbard. I don't know that specific number.
Mr. Burton. How about Tylenol?
Mr. Hubbard. Again, all of the non-steroidal, anti-
inflammatory drugs have side effects.
Mr. Burton. But you don't know how many here in the United
States and you don't know how many from Canada were caused?
Mr. Hubbard. I'm sure our physicians at FDA would know more
about the domestic drug side effects.
Mr. Burton. Mr. Hubbard, at this same Senate hearing a
letter from the former FDA Commissioner, David Kessler, was
read, and it stated, ``The Senate bill, the Meds Act, which was
signed into law, allows only the importation of FDA-approved
drugs manufactured in FDA-approved facilities and for which the
chain of custody has been maintained addresses my fundamental
concerns. I believe the importation of these products can be
done without causing a greater health risk to the American
consumer.''
Mr. Hubbard. I do not believe we agree with that, Mr.
Chairman.
Mr. Burton. Well, he was the head of the FDA, wasn't he?
Mr. Hubbard. He certainly was.
Mr. Burton. Are you the head of the FDA?
Mr. Hubbard. No, I am not, Mr. Chairman.
Mr. Burton. Does the head of the FDA now take issue with
this?
Mr. Hubbard. I believe Dr. McClellan would say that it is
important that consumers in this country get cheaper drugs, but
safely, and that bringing in drugs from foreign countries would
not be a way to do that.
Mr. Burton. Mr. Kessler I think was talking about Canada in
particular, wasn't he? And he said the chain of custody,
because that's what they call it up there, ``for which the
chain of custody has been maintained addresses my fundamental
concerns.''
It addressed his concerns because he said, in effect, that
the Canadian system did a pretty good job, and he said, ``It
addresses my fundamental concerns. I believe the importation of
these products can be done without causing a greater health
risk to the American consumer.''
You don't agree with that?
Mr. Hubbard. I believe he was referring to legislation that
you referred to earlier, Mr. Chairman, that passed the Congress
and was not effectuated either by the Clinton or the Bush
administration.
Mr. Burton. No. But the point is he was saying he had no
concerns about that, didn't he?
Mr. Hubbard. I think he was saying that legislation would
alleviate concerns he had because it would set up a verified
chain of custody of the drugs to confirm that they had gone to
Canada from the United States and it would turn to the United
States with a chain of custody maintained.
Mr. Burton. Right. Well, I think that's pretty clear. He
didn't have a great deal of concern. Do you believe that Canada
regulates the quality of medications manufactured and sold
there as rigorously as the FDA?
Mr. Hubbard. Again, that's asking me to judge or
characterize the Canadian----
Mr. Burton. Well, let me ask you a question.
Mr. Hubbard. All right.
Mr. Burton. If you don't know, why don't you find out?
You've got people here who are paying two and three and four
times as much for drugs, and you sit back and say, ``You might
be criminally guilty if you abet somebody buying these drugs.''
And these people, as Mr. Sanders said, many of them can't
afford to buy their drugs and food. And I know some of these
people, and you're sitting there in your ivory tower and you're
saying, ``Well, I don't know about Canada. I don't know if
their system is as good as ours.'' You had cursory conversation
with them, but you really don't know. And yet you're making
these decisions saying, ``Hey, if you buy drugs from Canada you
may be guilty of breaking the law,'' thereby implying that
these people might be prosecuted.
Now, these senior citizens, many of them aren't as
sophisticated as you and I. They know that you're probably not
going to do that, but you scare the hell out of them.
Now, you know, the last thing I'd like to say to you is
that this is not going to be the end of it. Today in the AARP
publication going to 35 million people they are talking about
this issue. We're going to contact every single senior citizens
group in this country and keep pounding on them. Now, I know
that the pharmaceutical industry gives $20 million a year in
political contributions up here on the Hill and to the
administration and to others. They do that both under Democrat
and Republican administrations. And I also believe the FDA is
influenced by the pharmaceutical industry, and anybody that
doesn't believe that has got their eyes shut.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED] T7228.055
[GRAPHIC] [TIFF OMITTED] T7228.056
[GRAPHIC] [TIFF OMITTED] T7228.057
[GRAPHIC] [TIFF OMITTED] T7228.058
[GRAPHIC] [TIFF OMITTED] T7228.059
Mr. Burton. And so the last thing I'd like to say is this
ain't going to go away. I'm going to be chairman of this
subcommittee hopefully for 6 years, and you're going to be here
a lot, and we're not going to quit until you guys do something
about this and Mr. Gutknecht is going to get exactly what he
wants. He's going to get all the hearings he can handle.
Who is next? Ms. Watson.
Ms. Watson. I think that the Chair is correct because he
feels the emotion of this issue. I would hope that the FDA
would take a look at the pharmaceuticals that are being ordered
through the Internet from Canada. I was told that there have
been no negative effects. But I do know in other countries that
the ingredients are different when they make up a compound, and
I would like some research on how those ingredients would
impact. You held up a package of a particular product that was
made for the mail system, not the e-mail system, and I'm sure
there are other kinds of pharmaceuticals that are in the hands
of Americans today. They simply don't have the knowledge.
So I would hope that FDA, through one of its auxiliary
branches, could do a little research on those particular
pharmaceuticals and also on the Canadian products.
Am I correct to say that I have not heard of any negative
effects of the products that come in from Canada, but there
could be----
Mr. Hubbard. That's generally correct, Ms. Watson, but,
again, the system is a passive one. It's not set up to record
these sorts of things. These drugs are in violation of the law,
and should not be coming in at all, and so the system is not
set up to record potential adverse events from drugs that
shouldn't be here at all.
Ms. Watson. Well, let me suggest to the Chair that maybe we
would want to promulgate some legislation that would give the
authority to the FDA and any other branch under maybe HHS to
look into this matter, and I think it is a matter of directing
and funding, but I think we might want to look into that.
Mr. Burton. Would the gentlelady yield?
Ms. Watson. Yes.
Mr. Burton. Do you have this authority already?
Mr. Hubbard. I think we would have the authority to test
drugs coming in from Canada, yes.
Mr. Burton. Yes. Well then why aren't we doing it if you
have a concern?
Mr. Hubbard. Other Members have asked us that. It would be
a very expensive proposition and there are concerns about what
you would be looking for. There are also concerns about that it
would be only a snapshot of that batch of drugs that you test
at any given time. So there are a number of logistical
questions about that, but we would be glad to respond to that
in more detail in writing, Ms. Watson.
Ms. Watson. Let us do this as a committee, and I will work
with the Chair on this--send a formal letter from the
subcommittee to the FDA asking them to use their authority to
take a look and do an evaluation of the drugs. It is an illegal
procedure now and we would just like you to evaluate what is
going on, you know, what you think the traffic is like, and the
volume, and how many people are in violation. But I would like
to know what the impact and effect these pharmaceuticals have
on those who are ordering them. I think under that authority,
if it requires additional funding you need to work through the
system for that, but since you have that authority I'd like for
you to take the responsibility. Maybe we can draft a letter to
ask them to do that.
Mr. Burton. I would be happy to do that with you, Ms.
Watson.
Mr. Gutknecht.
Mr. Gutknecht. Thank you, Mr. Chairman.
I want to come back to a couple of things that you said,
Mr. Hubbard. First of all, you said that your scientists could
not tell whether that drug was, in fact, the real drug or a
counterfeit, but isn't it really true that you could do the
same thing with a drug that I would purchase down the block at
the local pharmacy? Could your scientists tell by just
examining the bottle whether, in fact, it was real or
counterfeit?
Mr. Hubbard. No. The difference though is that the system
is so closed in----
Mr. Gutknecht. And that's a drug----
Mr. Hubbard [continuing]. This country that you wouldn't
ever even be looking for counterfeits in this country
generally. They're very, very rare in the United States, very
rare.
Mr. Gutknecht. Oh, it's very rare in the United States?
Mr. Hubbard. Whereas counterfeits in foreign countries are
very common.
Mr. Gutknecht. Because we don't test we know that it is
very rare here in the United States? Well, Mr. Hubbard, I think
you really should look at the facts. Counterfeiting is
happening in the United States right now. And do you know why?
It's because the prices are so high.
I want to come back to something that you said about a year
ago in testimony before a hearing here on the Hill on September
5, 2001. You said, ``The Canadian system is one that I have
some knowledge of, and I would have some degree of confidence
to say, as opposed to the Third World.'' In other words, the
Canadian system is a pretty good system. We don't have
Canadians dropping like cordwood from buying prescription drugs
at their pharmacies, do we? I mean, is there evidence?
Mr. Hubbard. That's right. I said that if I were in Canada
and ill and saw a Canadian physician and was given a drug from
a Canadian pharmacy, I would have a relatively high degree of
confidence that I was getting a safe and effective drug.
Mr. Gutknecht. Let me ask another question about the FDA.
You are responsible for fruits and vegetables coming into the
United States, are you not?
Mr. Hubbard. Yes.
Mr. Gutknecht. What do you say----
Mr. Hubbard. Perhaps Mr. Taylor should answer this next
question.
Mr. Gutknecht. Well, what does the FDA say to the roughly
1,012 people who have gotten sick in the recent years as a
result of eating imported raspberries? Do we have a
responsibility to those people?
Mr. Taylor. Absolutely. And----
Mr. Gutknecht. What about the 270 people who have gotten
sick from eating imported strawberries?
Mr. Taylor. Absolutely.
Mr. Gutknecht. What about the 25,000 people who have gotten
sick as a result of eating imported cantaloupes?
Mr. Taylor. Absolutely.
Mr. Gutknecht. Now, what do we know anything about where
those cantaloupes come from?
Mr. Taylor. Actually----
Mr. Gutknecht. I mean, could some of them actually be
coming from foreign countries in the Pacific?
Mr. Taylor. Actually, we do know a great deal about the
cantaloupe situation, and, to answer your question more
generally, in the last 2 years there has been an increase in
our funding to deal with imported foods as part of the counter-
terrorism efforts, so we have increased our coverage not only
at the border, we've also increased a number of foreign
inspection----
Mr. Gutknecht. So you stop and check every shipment that
comes into the United States now?
Mr. Taylor. No, we do not.
Mr. Gutknecht. How many do you stop?
Mr. Taylor. I think the figures are that only 1.7 percent
of the food that----
Mr. Gutknecht. That's 1.7 percent. Now, it seems to me--and
I'm just--I have been watching this now for 4 years. You have
set a bar in terms of imported drugs that is as high as it
possibly can, even though even your scientists can't even prove
drugs at the local pharmacy, whether or not they are, in fact,
a real drug or a counterfeit, by your own admission. But you
have a bar for imported drugs that is as high as the ceiling,
and yet for imported foods it is almost zero. And we know the
evidence. The empirical evidence is overwhelming. You are much
more likely to get sick from an imported strawberry than you
are an imported, legal, FDA-approved drug.
Now let me bring one more point. My time is almost up. Even
in your own handout--Mr. Chairman, you need to see this. This
is important for Members to understand. Even in your own
handout you show something that the FDA does not require in the
United States of America, and that is counterfeit-proof--I'm
sorry, counterfeit-proof blister pack packaging. Most countries
in Europe now require that kind of packaging, and the company
that makes that packaging is the same company that provides the
materials to our U.S. printing office that prints the $1 bills
and the $5 bills and the $20 bills. The question I would have
for the FDA: wy don't you require that kind of counterfeit-
proof packaging here in the United States?
Mr. Taylor. Quite actually, we are looking into developing
technologies that will help both industry and the FDA improve
our ability to detect counterfeits. As you noted, the U.S.
printing office has done a great deal of work on this, but
there are also academic centers and others in industry who are
trying to look at state-of-the-art ways that can improve our
ability to detect counterfeits.
Mr. Gutknecht. But you would have to acknowledge that it is
much more difficult to put a counterfeit drug in a counterfeit-
proof package, which you actually show on one of the Web sites
that you introduced as evidence that this may not be, in fact,
the same drug, right?
Mr. Taylor. I will admit that it is more evidence, but I
will also say that, quite frankly, some of the counterfeiting
these days is so high tech that, even though it makes it
harder, it does not necessarily preclude the possibility that
it will occur.
Mr. Gutknecht. But we are testing some of the drugs here in
the United States and finding out that some of them may be
counterfeit; isn't that correct?
Mr. Taylor. Absolutely. I mean, the suggestion--we should
not suggest that there have not been instances in the domestic
market where there have not been situations where we've
discovered that products have been counterfeited. And that's
absolutely right.
Mr. Gutknecht. I would yield.
Mr. Burton. I just want to point out that we have a witness
here today, and I don't know if you are going to stay for the
witness. I hope you will. Ms. Elizabeth Wennar, she came up
with an organization called ``Internet Mail Order
Pharmaceutical Accreditation Commission, IMPAC.'' They are
developing a rigorous system of quality standards for American,
Canadian, and Mexican mail order pharmacies, and they use this
method of packaging so that you can't get in there and change
it. You can't--if it is a prescribed drug and it is put in this
container and it is sealed, it comes in. It can't be
counterfeit. It has got to be the product that they purchased.
Now, what I don't understand, if she does this as an
individual citizen, why in the heck hasn't the FDA looked into
it with Canada, because if they did that they could work with
these pharmacists up there, they could work with the Canadian
Pharmaceutical Department, the government department, and they
could make sure that there was some kind of a system where you
would seal these things so that they came in without a great
deal of risk. And the only reason that I could think of that
you're not doing that is because the profit is so much greater
here in the United States for the pharmaceutical companies. And
I hate to think that. That's why I would hope--and I'm sure
that my colleagues would hope--that you would look at these
kinds of alternatives so that people can buy things safely on
the Internet, especially from Canada.
Mr. Sanders, I think you are next. And thank you for
yielding to me.
Mr. Sanders. Thank you, Mr. Chairman.
Mr. Hubbard, you are under oath now, so I would like you to
answer this question for me. For the past 15 or 16 years, the
FDA has used its enforcement discretion to allow Americans to
get 90 days of a prescription drug in Canada--and I know that
because I went across the border with people from Vermont and
other Members of Congress have done the same. Now--Mr. Burton
alluded to this--it appears that the FDA is clamping down on
this practice. Glaxo is withholding some of its medicine to
Canada. And I find it somewhat coincidental that all of this is
happening at the same time, as Mr. Burton indicated, huge sums
of money are coming from the pharmaceutical industry into the
U.S. Congress and, in fact, the White House.
Now, you are under oath. Could you please tell this
committee who within FDA or the Department of Health and Human
Services or elsewhere in the administration has advocated for
or directed a retreat from the FDA's longstanding enforcement
policy on this issue? Who gave you this idea suddenly after 16
years where, to the best of our knowledge, there has not been
one problem, suddenly, coincidentally, when the drug companies
are beginning to lose money the FDA is off and running. Who
have you been talking to?
Mr. Hubbard. I'll just simply say that in September I'll
have 32 years in the Government as a civil servant working for
both Republicans and Democrats, and at no time have I attempted
to make any decision or recommendation based on any sort of
political influence. The policy that you are referring to is
what is called the ``personal importation policy.'' It was
created in the late 1980's to let patients with serious or
life-threatening diseases such as cancer or AIDS patients go to
a foreign country to access an unapproved drug, an experimental
drug, and it allowed that patient to bring 90 days' supply in
under supervision of a physician if there was no alternative
treatment in the United States.
That policy has no relationship to people purchasing
these----
Mr. Sanders. But, in fact, because I did it, many of my
colleagues have done it, and hundreds of thousands of Americans
have done it, the reality is that for many, many years now
Americans have been driving over the border or increasingly
using the Internet without a problem. So my question is: if you
have a program that is saving Americans huge sums of money,
saving lives, why suddenly, all of the sudden--Mr. Gutknecht
mentioned problems with fruits and vegetables. There are
millions of people in this country probably getting sick
because they can't afford prescription drugs. How did it occur
to the FDA that one of their major priorities is to produce
literature like this frightening the American people,
investigating folks who are trying to keep themselves--where
did this idea come from?
Mr. Hubbard. Mr. Taylor will answer this.
Mr. Taylor. I notice that you were waving the pamphlet
there. I haven't been here at FDA the whole period of time that
the personal importation policy has been in place, but I have
not seen even in the last few years a change in the policy,
itself. We obviously have not focused on the individuals who
are purchasing the product. The focus for us has been on the
products themselves.
What we are trying to do, recognizing that people, indeed,
are going to go across the border to purchase these products
and, quite frankly, are going to purchase the products over the
Internet, as we have discussed today, what we've tried to do
and what we've tried to emphasize is the fact that we, the FDA,
who quite frankly are given the mandate of trying to assure
that people are receiving products that are safe and effective,
cannot necessarily do so for these products. And what we are
trying to do is educate people and help people make informed
decisions, because we have seen an increase in the
mischaracterization of certain products. For example, we've
seen an increase in Web sites that have characterized products
as FDA approved and----
Mr. Sanders. Mr. Taylor, I have a limited amount of time. I
apologize.
Mr. Taylor. OK. Fair enough.
Mr. Sanders. This is not the best format to do these
things. But let me ask you this.
Mr. Taylor. Sure.
Mr. Sanders. This is my concern. You want to educate
Americans. You know what I think you should be educating
Americans about? You should be putting out pamphlets that say,
``For the last 16 years people have been going across the
Canadian border saving substantial sums of money, probably many
instances staying alive rather than dying, improving their
physical condition rather than seeing a deterioration, and
there hasn't been one problem.'' How about putting out some
leaflets on that?
The issue is you bring up these charts about Thailand. We
are not talking about Thailand. We are talking about Canada.
And the evidence again--and please contradict me if I am
wrong--you have not indicated to us one instance of an American
purchasing a prescription drug from Canada who has been hurt.
And the answer is that Canadian pharmacies, as the chairman has
indicated, are regulated to quite the level that our pharmacies
are regulated; that, in fact, all drugs sold through registered
pharmacies that come into the United States are exactly the
same products as are sold to Canadians, and that, in fact,
because the pharmaceutical industry continues to charge
Americans so much money, out of desperation people are now
going across the border.
Frankly, I think that pieces of literature like this are
outrageous. I would agree with the chairman that I see it is
really a strange coincidence that, with all of the money coming
in from the industry, with Glaxo beginning to put pressure on
the Canadians, that suddenly the FDA is paying attention to a
non-problem rather than paying attention to a more serious
problem.
Mr. Hubbard, Mr. Taylor, have you done any research into
how many people in this country die or see a deterioration in
their physical condition because they cannot afford the
medicine that doctors prescribe? Do you have any studies on
that?
Mr. Hubbard. That's not the type of study that----
Mr. Sanders. Really? You're supposed to protect the safety
and health of the American people. Millions of people can't
afford their medicine. They're suffering. Maybe instead of
scaring the American people about not going to Canada you might
want to do a study like that.
Thank you, Mr. Chairman.
Mr. Burton. Thank you, Mr. Sanders.
Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
I just want to say to the gentlemen I want to associate
myself with the words of Mr. Sanders. It is so sad, incredibly
sad that I have people in my District that I see--I hate to
even go into a senior housing facility because over and over
again I see people as late as about a month ago--well,
actually, let's go back a year where a gentleman said,
``Congressman, you know, don't worry about passing some type of
prescription drug legislation for me.'' He said, ``I have been
cutting up pills now for the last 3 or 4 years and I'll be
dead. Do it for my fellow tenants here in this housing
project.''
Going back to Mr. Sanders' comments, I have constituents
that go to Canada, too. They take busloads up there, trying not
to just get rid of pain, in many instances trying just to stay
alive, stay alive. And I would appreciate it very much, and I
wish that they could--I started to say I wish they were here
today, but I'll be honest with you--I think if they were here
today they probably would be jumping over that table and be
very upset, probably lifting up canes because they get that
upset because they know their lives are on the line and they
know that they are choosing between eating and buying
prescription drugs.
The chairman is absolutely right. So often I think that we
find ourselves divorced from the very people who we are
supposed to be trying to help and trying to protect, and I
would appreciate it if you would put just as much effort into
trying to lift people up so that they can stay alive, stay
alive, as you do in putting these little pamphlets together,
because I think that sadly the American people are getting sick
and tired of not being able to afford the drugs that they need.
It is so very, very painful. It is probably the most
painful thing I do as a Congressman is to hear the stories, and
so I beg you that if you can't find a way to do the kind of
things that Mr. Sanders said, you ought to get out of the job
and let somebody else do it. Let somebody else do it who will
have the compassion for people and will help them stay alive. I
think it is almost criminal. It is almost criminal when we come
to a point where our seniors are being denied the kind of
information that they need, because, I mean, this is what it's
all about. I've told my constituents, you know, until we can
get some kind of prescription drug bill for them, to do
whatever you have to do. Take the bus. Go up there. As a matter
of fact, I've told them I'd help them pay to get up there. And
so then when I find out that--and, by the way, a lot of the
drugs that they're talking about, you know, they look at the
labels and they see that these drugs are the identical drugs,
of course, and packaged same places here in the United States,
and so they get very confused, I think as Mr. Gutknecht said.
They get confused. They don't understand it. They don't get it.
And so I would just ask that you all look into that. Have
you all looked into doing any of the things that Mr. Sanders
just suggested?
Mr. Hubbard. Mr. Cummings, we have spent countless hours
trying to examine processes or procedures that can allow these
drugs in safely, and we have simply given our honest appraisal
that the ideas that we have come up with and that others have
come up with can ameliorate the situation but cannot assure the
safety. It will weaken the safety net that has been created,
and if Congress wishes to do that because of price controls,
that is an issue for the Congress. FDA has not found a magic
answer to identify the safe drugs over here and the skeptical
drugs over here.
Mr. Cummings. Well, it would be--I think you need to keep
trying.
Mr. Burton. Mr. Cummings, would you yield on that point?
Mr. Cummings. Yes, I'll yield.
Mr. Burton. I'll give you some more time if you need it.
Last week it was suggested that domestic Internet pharmacy
sites get a seal of approval to validate that they are
legitimate. Now you say you haven't thought of anything to get
the job done. Why not do the same thing with Canadian
pharmacies in concert with the Canadian Government? In other
words, go to these various pharmacies up there and the ones
here and validate whether or not--check them out, make sure
they are legitimate. You've got a lot of people working for
you. They could do that. Once they check out the Canadian as
well as the American pharmacies, then there should be no
problem. But to say you can't find an answer just begs the
issue. I mean, the people here want to be getting these drugs
at a fair price, and it is your responsibility to make sure
that they get them at a fair price as well as make sure they're
pure. And that can be done through the packaging. I talked
about that just a minute ago, where they're sealed so that they
come back and you know that they haven't been broken, or
through making sure that the Internet sites are legitimate by
working with the Canadian Government to have them license them.
``Is this a legitimate one? Is it one we can work with?''
You're talking about doing it here; why not there, as well?
There's not as many of them up there as there are here.
The reason you don't want to do it, it appears, is because
the pharmaceutical companies aren't going to make as much money
and because they give so much money here on the Hill.
Mr. Cummings, I'll yield back if you have any additional--
--
Mr. Cummings. I wanted to ask him to answer that. Can we do
that? Can you do what the chairman just asked?
Mr. Hubbard. Well, we certainly at the hearing last week
did say that we thought the verify Internet pharmacy site was a
good idea and gave consumers a way of identifying legitimate
sites from illegitimate. The question of doing that for foreign
sites raises some other issues we'd be happy to look at.
Mr. Taylor, would you like to add to that?
Mr. Taylor. Well, the National Association of Boards of
Pharmacy, who sponsored the VIPPS program here in the United
States, I believe have a Canadian version, but they do not
provide a seal of approval for Canadian sites that sell their
products in the United States because it violates State law, so
they have a program that is a domestic Canada program and a
domestic United States program, but they don't have a program
that allows consumers in the United States to look at the seal
and know that these products are FDA approved and manufactured
in accordance with----
Mr. Burton. If the gentleman would yield?
Mr. Cummings. Yes.
Mr. Burton. If you can do it here and there's limitations
by State law or something, here is an agency for the whole
country. I mean, why in the world can't you send an emissary up
to Canada to talk to their agencies and work out an agreement?
We passed NAFTA. We passed NAFTA so we could trade everything
with Mexico and Canada, and you're telling me that you can't go
to Canada, have somebody from your agency say, ``OK, we want to
make sure in a way to accredit these pharmacies, to make sure
that they're doing the job right, just like we're going to do
it in the United States.'' That way the drugs can come in and
they'll be safe because you will know that pharmacy is on the
level.
I mean, to say that you can't do it or imply it by what you
just said really bothers all of us.
I'm sorry, Mr. Cummings. Go ahead.
Mr. Cummings. Mr. Chairman, I think that what disturbs me
so much--first of all, I'm very pleased that this is a
bipartisan effort. As you can see, we are on both sides of the
aisle, we're very concerned about this. I remember years ago
there used to be something in the boxing world called ``rope-a-
dope,'' and the boxer just laid against the ropes and took the
punches like you are. You probably feel like you are taking
punches today. And then when the fight was over they just
walked out of the ring, and maybe they won or maybe they felt
that they lost. But let me tell you something: I hope you are
not rope-a-doping today because I've got too many constituents
that are dying. And you cannot convince me for 1 second that
you cannot do the kinds of things that the chairman is talking
about.
In some kind of way I told my staff so often there are so
many people that their main power is the power to say no.
Everything is no, no. We can't do it. They find every excuse
not to do it. I'm begging you--I'm not asking you, I'm begging
you, because I'm begging for people who want to simply live--to
find a way to do it.
And, Mr. Chairman, I would hope that we would try to maybe
give these wonderful gentlemen some kind of time table to come
back to us with regard to, if there are issues with this,
showing us what the issues are and how we might be able to
resolve those issues as a Congress. That's why we are here.
With that, Mr. Chairman, I yield back.
Mr. Burton. Thank you, Mr. Cummings. We will honor your
request.
Mr. Gutknecht, did you have any other questions?
Mr. Gutknecht. Well, Mr. Chairman, I want to again thank
you for this hearing, and I want to thank them for coming and
testifying.
The problem here it seems to me is much more about
attitude. The FDA has taken the attitude that imported drugs
are, by themselves, illegal, and in fact this is a relatively
solvable problem. Technologically, the technology exists. It is
off the shelf, it is inexpensive, and it is called
``counterfeit-proof blister packs.'' They're available for most
European countries. The FDA could require them in the United
States. And it seems to me that if they really wanted to help
us solve this problem, we could have this problem solved in 45
days.
It seems to me I agree with Mr. Cummings. I mean, it really
is shameful that the FDA has taken the attitude that senior
citizens who are simply trying to save a few bucks--and in many
cases a lot of bucks--and, more importantly, to save and
preserve their lives, are treated as common criminals by their
own government. That is shameful. And it seems to me that the
FDA has a responsibility, Secretary Thompson has a
responsibility to do what it can to allow seniors, to allow
American consumers to do this in a safe way.
As they said earlier in their testimony, they don't test
American drugs. They assume that the drugs that you buy at the
local drug stores are actually those drugs and they are not
counterfeits. But the fact is it's happening more and more
where the local pharmacists are dealing in counterfeit drugs.
They don't test them. They assume that they're safe and
effective.
We should at least assume that American consumers and most
pharmacists, particularly in Canada and in the G-7 countries,
are not trying to kill their own patients. There is no evidence
that they are dying like cordwood. And, you know, it really is
shameful that the FDA is not working with us and with consumers
and with the producers to come up with a very simple,
technologically effective way to guarantee to the maximum
extent possible that these are, in fact, safe and effective
drugs for American consumers.
Mr. Burton. Any other comments? Mr. Sanders.
Mr. Sanders. Let me just very briefly indicate my agreement
with all of the comments made by my colleagues and just make
this point: given the fact that we live in a global economy,
given the fact that the lettuce and the tomatoes that we ate
for lunch today came from God knows where, what kind of farm in
Mexico, the grapes that I get from Chile--I don't know where
they come from, I don't know what they have been sprayed on--
and yet all of those products are imported into this country.
Mr. Gutknecht gave some of those statistics.
If the Federal Government and the FDA can say it is OK for
us to consume those problems, how in God's name are you not
able to regulate a few dozen pharmacies in an advanced country
like Canada which already has a regulatory system as strong as
ours? That begs any rational explanation. You can do it. Of
course you could do it. And if the chairman told you to come
back in a month with a mechanism to do it, you could do it if
you wanted to do it. And our frustration is we know you can do
it if you wanted to do it, but for some reason--and some of us
have our suspicion that it has to do with the awesome amount of
money that comes into Government from the pharmaceutical
industry--you choose not to do that.
So I would hope that you will come back to this committee
and tell us how you can perform the relatively easy task of
regulating and make sure that the products that come from an
advanced country like Canada, which already has a strong
regulatory system, are safe for the American consumers. We
believe they are safe. We believe you could do that.
Mr. Burton. And let me end up by saying--because I know you
are tired. You have been here a long time--that you could do
this one country at a time and you could start with Canada, and
if you did that and it showed that it was going to be
effective, then you could look at other countries one at a
time. It's not something that has to be done all at once, but I
think we want to make sure that Americans get the best price.
I'm very concerned that we are going to pass a prescription
drug benefit, and if you guys don't do something like this over
there that the Government is going to be incurring these huge
differentials in the price between here in the United States
and around the world.
And the last thing I would like to say are there are 600--I
want to say this to my colleagues--there are at least 600
lobbyists here in Washington that are paid by the
pharmaceutical companies, and the $20 million that comes in
every 2 years to Members of Congress and the White House,
whoever is in the White House at the time, that $20 million and
those 600 lobbyists aren't going to go away and we're going to
have a fight on our hands. And the 600 lobbyists you can bet
are being paid a heck of a lot more than $20 million. So this
is something that we're going to have to fight at a grassroots
level, and that's why we contacted the AARP, and they've
already written an article, and we've got to contact every
senior citizens group, and in your own Districts--and if you're
talking to our colleagues, if you could talk to them about
contacting their people, their senior citizens groups, and have
there be a barrage of correspondence coming into Congress
saying, ``Hey, let's get this job done,'' then I think the heat
will get so great that we'll be able to get it done, even in
spite of all that money.
With that, Mr. Hubbard and Mr. Taylor, thank you for being
here.
Mr. Hubbard. Thank you for having us, Mr. Chairman.
Mr. Taylor. Thank you.
Mr. Burton. We'd like to call now Elizabeth Wennar. She is
an M.P.H., D.H.A., president and CEO of United Health Alliance,
principle, HealthInova; Mr. Andy Troszok, vice president of
standards, Canadian International Pharmacists Association; Mr.
Robert M. Hayes--is anybody staying here from the FDA?
Are you with the FDA? I would like for you to stay and hear
their testimony and maybe convey that back to Mr. Thompson.
Good, good. We appreciate that very much.
Mr. Robert Hayes is with the Medicare Rights Center; and
Mr. J.P. Garnier, chief executive officer of GlaxoSmithKline. I
know he's not going to be here, but we'll have some questions
that we'll send him.
Would you please rise so I can have you sworn in?
[Witnesses sworn.]
Mr. Burton. Be seated. We'll start with you, Dr. Wennar.
STATEMENTS OF ELIZABETH A. WENNAR, PRESIDENT AND CEO, UNITED
HEALTH ALLIANCE, PRINCIPLE, HEALTHINOVA; ANDY TROSZOK, VICE
PRESIDENT, STANDARDS, CANADIAN INTERNATIONAL PHARMACY
ASSOCIATION; AND ROBERT M. HAYES, MEDICARE RIGHTS CENTER
Ms. Wennar. First I would like to thank you, Mr. Chairman,
for calling this very important hearing. I have submitted
written testimony, but what I'm going to do is just attempt to
synopsize what I have provided to you, with your permission.
You know, I'd like to talk to you a little bit about where
I come from so that the panel can understand why we started
this.
As you mentioned, I have a couple of different things that
I'm involved with. You mentioned my name earlier in terms of
some of the labeling that we have been working on, and I'll
mention that a little bit later.
We first got involved as a provider network in a rural
community because we were very concerned about compliance, and
if you understand quality we really--that is a pure definition
in a provider's mind. Compliance is really the ability for the
patient to be able to take their medications as prescribed so
that you can get the outcome, the intended outcome.
Now, technology in the form of a pill is here to stay. It
is a major component of health care. So as a provider, you're
looking at this and you make an assumption. Sometimes it is a
false assumption, but you make the assumption that if you
prescribe it for your patient that they are going to take it as
prescribed.
Now, when you find out that they cannot access it and its
affordability, you have an ethical dilemma, you know. You
prescribe something, it exists, and they can't afford to take
it.
So from our perspective about 3 years ago we got very
actively involved, and we do have to thank--we have much
gratitude and appreciation to Congressman Sanders for starting
the initiative up in Vermont. We just basically piggy-backed
onto what he started and decided that if it could be done, we
had so many individuals we were trying to serve that could not
get on a bus, could not--you know, they just couldn't leave
their home. They needed to have access.
We decided that it needed to be brought in through the mail
and that we were going to be willing to attempt it. Our first
case was with an individual who had breast cancer and needed
tomaxaphin, and so we tried to come up with something very
simple that would facilitate the process, and in doing so we
suddenly became bombarded because we were initially concerned
with just our local community. Since that time, we now are
serving individuals in every State in the United States. We did
a survey and counted that there were over 1.2 million
individuals using this mechanism to access safe, affordable
prescription drugs.
Now, having said that, what I'd like to do is just sort of
summarize what I'd like to talk to you about today, and I would
be more than happy to answer any questions.
The issues are very large from the perspective of if you
look at it globally, we all know that, as has been previously
mentioned here, employers are having a hard time trying to
manage this problem, States are having a hard time trying to
manage this problem, and certainly the Federal Government is
having a hard time trying to manage this problem. We have a
major crisis on our hands.
So for those of us that are out there trying to deal with
it every day, I think that we are constantly trying to be
creative and innovative, and I would say to you that if the FDA
can't figure out how to do this in terms of some of the things
you have mentioned, we have offered before in previous
testimony that we would be more than happy in the private
sector to take on some of the burden of doing this. This should
not be your burden alone to do, and we are willing to step up
to the plate, and I challenge physicians, I challenge
pharmacists. It is part of their responsibility to do this, and
that's the reason our physicians have gotten involved. They
must be engaged in these conversations. You cannot solve this
problem alone. They must be there helping you. So I tell you we
will wholeheartedly help you solve this problem.
Having said that, I'd like to talk to you about some of the
problems that exist right now in terms of the mechanism we have
been using very effectively for over 3 years now to facilitate
the process. I think I have heard some discussions about the
legality of personal reimportation. And let me be real clear:
personal reimportation is the area that we have been focused
on, trying to help one individual at a time. Having said that,
we do know that there are employer groups now that are very
concerned and considering this.
I have a gentleman here with me today who is the president
and CEO of Aubuchon Hardware. He is a self-funded employer and
he has been considering this effort. We did an analysis. He is
currently using a PBM in the United States. With accessing
medications from Canada, he could save another 25 percent over
what he is saving here. He feels he has an obligation to his
employees under self-funded to help them maintain their
benefits. We agree. But he has now sort of been held at--it's a
stalemate now because of the recent FDA letters that have been
issued in terms of things, so he is now on a holding pattern in
terms of doing this.
I think our major concern now is the recent activity with
the pharmaceutical industry cutting supply, and I would like to
get back to the compliance issue that I spoke to you about. If
you know you have individuals that are complying with a
treatment plan and having good outcomes, now do you call it
good quality to cut that supply to those individuals that have
been complying? I think not. By the very definition of quality,
they are complying and we have good outcomes, so to cut the
supply after 3 years of knowledge of this taking place borders
on--I have to tell you, it is just intolerable, from my
perspective, to think that would occur with an entity that
professes to be part of a provider network. Major technology
they provide to save people's lives, and now they are going to
take it away from them. I think it is unethical. I don't want
to talk about legal. I want to talk about ethics, and it is a
major ethical dilemma for us.
Now, we have worked very hard to try and think about how we
could help solve some of the problems that have been discussed
around safety and quality. And if you put the right people in a
room and sit and talk about it, you can come up with some very
creative things. You mentioned IMPAC. IMPAC is Internet and
Mail Order Pharmacy Accreditation Commission that has been
licensed to a professional association made up of pharmacists
and physicians from Canada, the United States, and Mexico that
has just recently been put together. In fact, they've just
recently had their first board meeting. Those individuals are
looking broader than just reimportation. That's not their major
mission. Their major mission is to look at things in pharmo-
economics and pharmo-therapeutics that they might be able to do
that will help us all across the country, the whole North
American continent, to cross-collaborate not only with two sets
of professionals that have never been in one single
association, but across three countries that we could really
use our resources much better.
IMPAC is an accreditation process that is much like the
Joint Commission on Accreditation of Health Care Organizations.
I'm sure many of you are familiar with it. All of our hospitals
are required to be accredited before they are reimbursed for
care. Physicians are held to a set of standards, as well.
Prescription drugs are really the only one component, and
particularly in the form of mail order--and now when you talk
about Internet pharmacies I'd like a clarification here,
please. Internet is mail order, first and foremost. We have
mail order in this country, and I would challenge people to
please tell me in mail order do you believe that when something
comes from across the country to you in a package, do you have
every assurance that is completely safe? I have yet to see them
meeting a set of standards and meeting these accreditation
standards that we require every other component in health care
to do. I think it is time. The time is now.
Now, having said that, we believe that Canadian pharmacies
are willing to step up to the plate to meet these accreditation
standards. Once they meet those standards they would then be
issued these non-counterfeitable seals, which I'm going to ask
you, if you happen to have a $20 bill in your pocket, to pull
it out and look at it, because it is the same technology that
is utilized by our U.S. Mint. It is not counterfeitable, and
I'm going to show you how. It is optical technology, and I do
also have an expert here with me that can answer technical
questions. But if you pull it out--thank you, Mr. Gutknecht--if
you look at the right-hand corner of the $20 there you will
notice that it is a different color. If you hold it flat under
the light and rotate it, you will see that it optically
changes. I could--if you just rotate it toward you, and you
will see it change in color. That cannot be broken, that
optical code. The FBI has not been able to break that code. And
I would ask you one question: if it is good enough for our
currency, is it good enough to be used here? I would profess
that it is.
We have come up with a prototype label. In front of me I
actually have something that's much broader that I would
suggest you think about, and that is that anything that leaves
an FDA manufacturing approved site, every manufacturer should
have this labeling on their bottle. That's a good beginning in
terms of stopping counterfeiting right there and endorsing
safety.
But I'm going to say it again: if it is good enough for the
U.S. Mint, it should be good enough for our prescription drugs.
With that, I would tell you that, again--I'll finalize my
comments by saying three things. One, the interpretation of
whether this is legal or not is where we're having a problem.
The manufacturers' recent efforts in Canada to shut supply is
our second issue. And third is the FDA's recent letters that
they have been sending out in terms of threatening those of us
that attempt to help our patients. Those are barriers to
success in Canada.
And the last thing I will say is that Canada is not a Third
World country. We do site visits to all the pharmacies that we
utilize, and I don't understand, if we can do it in the private
sector, why is it that they can't do it at the FDA? Of course,
leave it to the private sector then. We will engage them in the
conversation. We'll make sure they have a list of every
registered pharmacy in Canada or any place else in the world.
Thank you.
Mr. Burton. Thank you.
[The prepared statement of Ms. Wennar follows:]
[GRAPHIC] [TIFF OMITTED] T7228.060
[GRAPHIC] [TIFF OMITTED] T7228.061
[GRAPHIC] [TIFF OMITTED] T7228.062
[GRAPHIC] [TIFF OMITTED] T7228.063
[GRAPHIC] [TIFF OMITTED] T7228.064
[GRAPHIC] [TIFF OMITTED] T7228.065
[GRAPHIC] [TIFF OMITTED] T7228.066
[GRAPHIC] [TIFF OMITTED] T7228.067
[GRAPHIC] [TIFF OMITTED] T7228.068
Mr. Burton. I think that you have probably heard us and our
suspicions of why, so take that for what it is worth. There's
an awful lot of pressure being exerted up here.
Mr. Troszok. Is that right?
Mr. Troszok. Close enough.
Mr. Burton. I want to make sure I get this right.
Mr. Troszok. We from Canada have strange names from
different planets.
Mr. Burton. OK. You guys play a lot of hockey up there too,
don't you?
Mr. Troszok. Mr. Chairman, committee members, thank you for
having the opportunity to discuss safety issues from Canada. I
am a Canadian licensed pharmacist, and when I graduated I
pledged an oath to take the health, safety, and well-being of
my patients as a priority. I have the privilege of working in
community pharmacy for 8 years, and also in academia, and I
have had the ability to work with patients, and every time I
did I took that to the strongest possible level.
I think patient safety and overall patient health should be
the priority of any pharmacist working in any kind of realm, be
it hospital, retail, or innovative delivery of service such as
distance-based delivery or mail order.
Canadian pharmacy is recognized internationally as a leader
in innovation, focus, and patient health and safety. Pharmacy
is a highly regulated profession in Canada, and pharmacists
must adhere to guidelines administered by the Federal and
provincial regulatory organizations.
Health Canada has a branch called the Health Protection
Branch that is responsible for approving and regulating
medications in Canada. The Health Protection Branch has a
similar role to the FDA in the United States. That's what kind
of surprised me when Mr. Hubbard was talking about not
understanding the Canadian approval systems, because, to my
knowledge, the FDA and Health Protection Branch work hand in
hand and know equally what one does.
Medications are approved and sold----
Mr. Burton. Would you repeat that one more time? I want to
make sure that we got that.
Mr. Troszok. To my understanding, the Health Protection
Branch, which is the equivalent branch in our government to the
FDA, to my knowledge works hand in hand in communicating
between the border on issues of drug regulations. And I'm not
an expert in this area. I would ask that you maybe subpoena
someone from the Canadian Government that is, because I know
that these two organizations do talk together.
The process of approving drugs in Canada is similar to that
of the United States. In part, this process is facilitated by a
high degree of collaboration between the Health Protection
Branch and FDA, as well by the fact that a vast majority of
prescription pharmaceuticals are manufactured in the United
States and are bio-equivalent or identical in both countries.
Now, the distribution of medications from drug
manufacturers to pharmacies is also very highly controlled.
Pharmacies can only purchase medications directly from a drug
manufacturer or through a wholesaler that is licensed by Health
Canada to sell pharmaceuticals. Only pharmacies licensed by the
provincial regulatory authorities can purchase prescription
medications that are to be dispensed to the public. There are
approximately 12 wholesalers in Canada, and their ability to
control and regulate them is quite easy.
In Canada provincial pharmacy regulatory organizations
called colleges or associations regulate the practice of
pharmacy. A pharmacy must obtain a license from the provincial
pharmacy regulatory organization to be able to dispense
prescription medications to the public. Each province and
territory has a legislative pharmacy act in addition to
standards of practice and a code of ethics that pharmacies and
pharmacists must abide by.
I am vice president of an organization called the
``Canadian International Pharmacy Association.'' I handle
standards. We were created in November 2002, and our main focus
was to represent Canadian pharmacies practicing international
pharmacy, but also to put forth standards and regulation into
this industry. So we are willing to work closely with the FDA,
with U.S. regulators to make this a safe and viable practice.
We currently have what is known as a CIPA certification
process. As was mentioned by the FDA, we tried to become VIPPS
certified, but we were denied a VIPPS certification because we
could not get a license to practice pharmacy in each of the
States. But our members were willing to take that process but
were denied.
So what we did was we mirrored our CIPA certification
behind the VIPPS certification. Now Dr. Wennar has mentioned
that there is another certification program. I guess what I'd
like to tell this committee is that regulated, licensed,
professional pharmacies are willing to work with any U.S.
organization that will enhance the safety and the well-being of
U.S. patients.
Thank you.
[The prepared statement of Mr. Troszok follows:]
[GRAPHIC] [TIFF OMITTED] T7228.069
[GRAPHIC] [TIFF OMITTED] T7228.070
[GRAPHIC] [TIFF OMITTED] T7228.071
[GRAPHIC] [TIFF OMITTED] T7228.072
[GRAPHIC] [TIFF OMITTED] T7228.073
[GRAPHIC] [TIFF OMITTED] T7228.074
Mr. Burton. Are all of your comments in your written
statement?
Mr. Troszok. Yes. I have submitted a----
Mr. Burton. I want to send that to the FDA because I think
that is important. Send that to the head of the FDA and to Mr.
Thompson.
Mr. Hayes.
Mr. Hayes. Thank you, Mr. Chairman, committee members.
The Medicare Rights Center is the largest independent
source of Medicare information and assistance in the United
States. Day in and day out what we do is work with people with
Medicare to assist them access needed health care. Tens of
thousands of callers use our health lines annually and, no
surprise to you members of this committee, the greatest and
gravest unmet need of older and disabled Americans is the
unavailability of affordable prescription medicine.
From the trenches from which we work in, Mr. Chairman, the
unaffordability of prescription medicine is a national
emergency you folks at least seem to recognize.
Today the importation of comparatively affordable medicine
from Canada is literally saving the lives of people we work
with. Of course, I think we all here know that easing access to
lower-priced prescription drugs imported from Canada is not the
comprehensive, ultimately the intelligent response this
national emergency requires, but keeping this lifeline open is
essential to the health security of hundreds of thousands of
American citizens.
We at the Medicare Rights Center are staffed. We rely
heavily on volunteers, are routinely in the heartbreaking
position of being unable to assist callers help find the
affordable medicine they do need. We do everything we can to
advise consumers. We research State prescription programs, we
look at veterans benefits, supplemental insurance programs,
discount cards, free samples, private company programs, family
foundations, mail order houses, Internet pharmacies--yes, even
those that are not in the United States, and maybe we're lucky
the FDA has taken off. We go to the kindness of strangers
frequently to try to get medicine to people who need it, but
too often we fail.
I think the committee really finds itself today
legislatively in the same situation our volunteer counselors
work in. We, like you considering this legislation to bring
cheaper drugs from Canada, are doing what we can do with what
we have, knowing what we have to work with is terribly
inadequate.
Mr. Chairman, three quick points. One, Congress should
amend the Prescription Drug Marketing Act to authorize
individuals to import from Canada, whether by mail, by
Internet, by visit, prescription drugs for personal use. Seems
pretty clear it's vitally in the Nation's interest to take the
discretion away from the FDA on how they enforce existing law.
Two, more significantly, Congress again needs to take the
lead in authorizing clearly authority to reimport prescription
drugs from Canada.
Three, I've got to say that those of us who try to keep
somewhat away from politics and are working with folks in the
trenches are so gratified to see a committee work as this
committee is doing. I think folks on both sides of the aisle
here--maybe three aisles, almost--should be hugging each other,
because it is such an unusual sight from the trenches to see
this kind of tripartisan commitment to the public good. But
there should be applause for the introduction of H.R. 847.
From our daily work assisting people find affordable drugs,
we know that many Americans will go without medicine if their
Canadian pharmacy is cutoff and they cannot find alternatives.
Our experience, contrary to what I expected our friends from
Glaxo to say, but what they do say on their Web site, our
experience is that older Americans will not find an affordable
alternative if the Canadian pharmacy route is cutoff from them.
Again, our experience, contrary to what GlaxoSmithKline
speculates on, is that our callers, consumers have not faced
dangers in purchasing drugs from Canada. The danger, as you
folks have made quite clear, the danger they face is going
without the medicines that doctors have prescribed.
So, to wrap up, four things we know: One, there is direct
evidence that citizens of this Nation, real people, someone's
parents, grandparents, and wives are going without the
medication they need. We are not speculating on that evidence.
Two, more Americans will be able to afford more medicines
that the doctors have prescribed if they are allowed to
purchase the drugs reimported from Canada.
Three, there is absolutely no evidence of any person
suffering negative effects or complications because their
medicine was reimported from Canada.
And, fourth, ask any physician in America who treats an
elderly population--the damage to our citizens who go without
needed medication is palpable, painful, frequently deadly.
So, Mr. Chairman and committee members from all parties
here, we thank you for your efforts to mitigate the damage
being done to our people.
[The prepared statement of Mr. Hayes follows:]
[GRAPHIC] [TIFF OMITTED] T7228.075
[GRAPHIC] [TIFF OMITTED] T7228.076
[GRAPHIC] [TIFF OMITTED] T7228.077
[GRAPHIC] [TIFF OMITTED] T7228.078
[GRAPHIC] [TIFF OMITTED] T7228.079
[GRAPHIC] [TIFF OMITTED] T7228.080
[GRAPHIC] [TIFF OMITTED] T7228.081
[GRAPHIC] [TIFF OMITTED] T7228.082
[GRAPHIC] [TIFF OMITTED] T7228.083
[GRAPHIC] [TIFF OMITTED] T7228.084
[GRAPHIC] [TIFF OMITTED] T7228.085
[GRAPHIC] [TIFF OMITTED] T7228.086
Mr. Burton. Let me just ask a couple of questions, and I
won't take my full 5 minutes, which is unusual.
Mr. Hayes, you deal with the realities of life when you
deal with these people. Are there people dying as a result of
the problems that they can't afford prescription drugs?
Mr. Hayes. No question, Mr. Chairman.
Mr. Burton. You wouldn't have any idea from your experience
what the number might be?
Mr. Hayes. No idea. Obviously, we can only help so many
people with our small crew of horribly paid staff and
volunteers, many of them elderly, themselves, many of them who
become volunteers in these trenches because they have
experienced the same hardship. I think Congressman Sanders'
idea to get the GAO to do some examination of this is vitally
important and would be very useful.
Mr. Burton. Well, I think many of us will join him in
asking for that study. How big an area do you deal with?
Mr. Hayes. Nationwide.
Mr. Burton. Nationwide. And so you have volunteers all
across the country who feel as you do?
Mr. Hayes. We have callers from around the country.
Mr. Burton. Callers.
Mr. Hayes. We have call answerers based mostly in New York.
But this is a problem that is mitigated to some extent in some
States where there is a State prescription drug program that
helps some people.
Mr. Burton. I know, but in many States they don't have
that.
Mr. Hayes. Many they don't.
Mr. Burton. And so as a result, people are suffering.
Mr. Hayes. Yes. And, of course, you'll hear from Glaxo and
from any other drug company about all the alternatives there
are. Believe me, we use them. We have no ideology against any
pharmaceutical company, but it is similar to running from soup
kitchen to soup kitchen to get a meal--it is so hard to access,
and more often than not we can't help people find anything.
Mr. Burton. Dr. Wennar, I just want you to answer one
question. It is possible to use this kind of technology to make
sure that the drugs being imported from Canada or any place as
long as you've got a cooperating pharmacy, to make sure that
they are absolutely safe?
Ms. Wennar. Absolutely. And, I mean, on top of that you put
an additional layer by requiring that they meet a set of
standards, themselves.
Mr. Burton. Yes.
Ms. Wennar. Which includes a site visit, and then there is
a list of standards with multiple elements under it that I
would be more than happy to provide you with that whole
listing.
Mr. Burton. What I would like from you, all of you, to give
us a list of things that you think could be done to make sure
the importation of pharmaceuticals are safe. You give us a list
of those, and we'll give it to the FDA, and we'll ask them to
check that out because they say they can't find an answer, and
we believe that maybe you do have some answers. If they look at
your answers and say that they're not workable, we're going to
ask them why. We'll do our very best to work with you, and we'd
like to continue to have this kind of dialog.
Ms. Watson, do you have any questions?
Ms. Watson. Not really a question, but the models that have
been mentioned here I would hope that we could maybe--well, I
guess this piece of legislation does that. I would like to ask
the authors of H.R. 847--and I haven't really looked at every
line, but do you authorize the access and the labeling and the
licensing through this legislation?
Mr. Sanders. There are two separate issues. H.R. 847 deals
specifically--is a response to what Glaxo did and what we say
is that drug companies, not just Glaxo, cannot discriminate
against Americans and limit supplies to Canada, and if they do
that they are going to be fined heavily. But, to answer your
question, in other reimportation language, bills that we have
introduced, the issues that you have raised are dealt with.
Among many other things, we have built--I'll give it back
to you, but we have built in a very strong regulatory mechanism
to make sure that all product that comes into this country is
FDA approved and is safe.
Ms. Watson. Is that in addition to this bill?
Mr. Sanders. Yes.
Ms. Watson. It's in other bills?
Mr. Sanders. Yes.
Ms. Watson. I would like the panel to respond if the bills
that have already been introduced meet your needs of making
these drugs accessible across the border.
Ms. Wennar. Well, I think there is a litany of bills that
are out there that are trying to serve multiple purposes. I
mean, obviously in the ideal world we'd like to see one
comprehensive bill that could serve multiple purposes. The
reality--I'm going to get back, and maybe I'm going to sound
like the FDA here, but safety is a major concern of ours and
quality is a concern. Let's not confuse counterfeiting,
although it is a component of this. Counterfeiting, as Mr.
Gutknecht eloquently pointed out, exists in every country in
the world, including the United States. We are not attempting
to solve all of the potential counterfeiting problems. What we
are trying to do is assure the highest level of safety that we
can and quality as it relates to something that is being
brought back in. And again we're just talking about Canada, but
the same technology can be applied, and certainly this
technology we're talking about right here in terms of the seals
that would go around the bottle or on a labeling is saying that
once it left the manufacturing site in this condition--and this
optical technology is so inexpensive in terms of how you assess
it by simply rotating it, and it is very easy to do. It doesn't
require huge resources. This is a first stage effort of saying
that you have done something at that manufacturing level when
it leaves there. That's the first step.
The second thing is that we're talking about the pharmacies
actually meeting a set of accreditation standards just like
hospitals in the United States are required to do now. I will
point it out again--every component of health care with the
exception of this one is required to meet some set of
accreditation standards.
Ms. Watson. Would you yield for a minute?
Ms. Wennar. Yes.
Ms. Watson. Are the bills that are out there doing what
you're asking? Then let's have a bill introduced that does
this.
Ms. Wennar. I have not seen specific language that would
require any mail order pharmacy to meet a set of standards.
Mr. Sanders. If the gentlelady will yield, last year we
introduced a bill which for, in a sense, political and
practical considerations limited the reimportation from Canada,
which has built in it very, very strong regulatory and safety
safeguards. This year that bill has already been introduced in
the Senate and will be introduced in the House.
Ms. Watson. Mr. Chair, if I may on this issue?
Mr. Burton. Sure. Yes.
Ms. Watson. When that bill comes over here to the House of
Representatives, why not amend it to put in the provisions that
you are describing if they are not already enumerated? We can
do that. We can prepare them and have them ready to amend into
the bill. Then it could go into conference and we'll come out
with----
Ms. Wennar. And what this does do is very simply it makes
the FDA--I should say Customs' job much easier, because now if
they--I believe one of the envelopes that's floating around, in
addition to it being secure this way, on the cover of that
shipping and handling package there is a non-counterfeitable
seal that would be applied that's simply rotated by the Customs
officer, and if the seal doesn't change optically in terms of
the color it should be not allowed into the United States. Very
simple.
Mr. Gutknecht. If the gentlelady would yield, I am working
on that portion of the bill because I think that is a critical
point, but if I could just make this point, Mr. Chairman, just
real briefly, the problem we have confronted for the last 4
years is that we have come up with a number of ideas, but what
we are dealing with here is a agency who clearly does not want
to do this. And no matter what we may put in statute, if they
don't want to do it--in fact, it is on the books today that
they have to allow personal importation, and yet they are
finding every excuse possible not to enforce the law that's on
the book--in fact, in my opinion to misinterpret the law that
is on the books. So whatever we put in law will be very
difficult to get the FDA to implement if they're not willing to
at least listen to what we and the vast majority of Americans
are saying.
Ms. Watson. Would you yield?
Mr. Gutknecht. It's your time. I'm sorry.
Ms. Watson. Why is it that, along with the amendments that
you've already been working on, that we could not put in a
provision directing the FDA to do this, and if it is not done
by a certain date there are consequences, whatever that might
be?
Mr. Gutknecht. I think that is an excellent idea. As a
matter of fact, we may have to put at the end of this bill this
year, assuming we can get it to a floor vote on the House and
in the Senate, we may have to put a line at the very end that
says ``and we really mean it.'' [Laughter.]
Ms. Watson. We'll work with you on that.
Mr. Burton. I suppose you could put a criminal penalty on
there. If they don't comply with the law, then the bureaucrats
are liable.
Mr. Troszok. May I just make a comment regarding the
Canadian political system as reacting to the current laws? In
February our organization took Glaxo to the Competition Bureau,
the Federal Competition Bureau, because Glaxo has--just to be
on the record, Glaxo has imposed the ban to Canadian pharmacies
that sell prescription medications to U.S. patients, so that
ban is on as of January 21st.
We took Glaxo to the Competition Bureau. The Competition
Bureau came back and said, ``You have a case in every single
circumstance with the exception of the legality.'' And the
Competition Bureau dropped the case because they talked to the
FDA and were told that this is an illegal act. So I think it
also has to be----
Mr. Burton. The FDA told them it was an illegal act?
Mr. Troszok. Yes, they did.
Mr. Burton. The law doesn't say that.
Judge, did you have any questions?
Mr. Duncan. Well, thank you, Mr. Chairman. I had some other
meetings and so I don't have many questions, but I will say
that we had a hearing that got into some of these things before
the Government Reform Committee just a few days ago. Mr.
Hubbard testified and they had an official from the Federal
Trade Commission who testified, and he said in response to a
question that I asked that they had not received any
complaints, not one, at the Federal Trade Commission from
people who had gotten prescription drugs over the Internet. You
know, sometimes you can get a little more with a carrot than
with a stick, and I actually introduced a bill that I knew
wouldn't really go any place but I thought would start the
conversation at least maybe, to try to come up with some type
of tax break for a pharmaceutical company that would certify
that they were selling their drugs at the same price in this
country as in any other country.
I think, though, that the chairman a while ago got into the
area where probably something really could be done on this, and
that is we put some provision in the law when we set up the
prescription drug plan that no company can participate unless
they will certify that they are selling those drugs to the
government or the prescription drug plan at the lowest price
that they're selling it any place else, something to that
effect.
But I appreciate your testimony today. I've read over as
much as I could here in just a few minutes, and I'm sorry I
didn't get to hear it all in person.
Thank you, Mr. Chairman.
Mr. Burton. That's a great idea, and we'll see if we can't
get an amendment to that effect on the floor with a bunch of us
speaking on it.
Mr. Sanders.
Mr. Sanders. I'll be brief because we have some votes. I
just want to thank our panelists. Without exception, the
testimony was excellent.
Mr. Chairman, Mr. Hayes told us that in the real world
people are suffering and dying because they can't afford
prescription drugs. Dr. Troszok--we thank you very much for
coming south--has told us about the high standards of the
Canadian pharmaceutical industry and their willingness and
desire to cooperate with the U.S. Government in making sure all
of the safety standards that we require are met. And Dr.
Wennar, who comes from Bennington, VT--you forgot to mention
that, Beth--has done just an outstanding job starting off small
scale in Bennington and spreading all over this country, and
because of Dr. Wennar's work God knows how many Americans now
are receiving medicine that they require at reasonable prices.
We thank you all very much, and her innovative ideas in terms
of safety are great.
The conclusion that I reach, Mr. Chairman--I think you've
said it and Mr. Gutknecht has said it. We've all said it. This
is a problem that can be easily solved if there is the will to
solve it, and we have got to continue to work together,
because, as Mr. Hayes has indicated, the stakes are enormous.
People are dying today and they are suffering because this
institution, our Congress, has not acted. And I pledge to work
with all. Let's all work together in a nonpartisan way, and if
we do we will succeed.
Mr. Burton. Very good.
Mr. Gutknecht.
Mr. Gutknecht. Mr. Chairman, we do have a vote, and I do
want to thank the witnesses. This was excellent testimony. I
wish we had time, especially for Dr. Wennar. She has testified
before. We have met several times. The program that they have
going on is really the model that I would like to see
implemented around the country and I think could be expanded
upon.
This is one of the most frustrating issues that I have ever
been involved with, and I always tell people I feel sometimes
like the little boy who came in and asked his mother a question
and his mother was busy and she said, ``Go ask your Dad.'' And
the little boy said, ``Well, I didn't want to know that much
about it.'' The more you learn about what is happening and the
pernicious nature of the way pharmaceutical drugs are priced
around the world, it is really shameful. And it seems to me
that, working together with people in the private sector, that
there has to be a better way to come up with a formula so that
at least we can have average prices. You know, there is no
excuse for the world's largest market paying the world's
highest prices.
And if I could just say also, we subsidize this industry in
three separate ways. Mr. Sanders mentioned through the tax code
we are incredibly generous in terms of allowing them to write
off their expenses. Second, we subsidize them in the amount
that we spend on basic research. This year this Federal
Government will spend over $21 billion taxpayer dollars on
basic research, much of which will go to benefit the
pharmaceutical industry. And then, finally, we pay as American
consumers virtually all of the cost for the other research
that's done, and that is being used by consumers all around the
rest of the world.
I want to thank our excellent panels. I want to thank you
for having this hearing. This is a very important first step.
It is a bipartisan issue. It is an issue whose time has come,
and ultimately I am confident that some time during this
Congress we are going to move this ball forward and allow
Americans to have access to world-class drugs at world-market
prices.
Mr. Burton. Well, let me just make a suggestion. Individual
bills may or may not succeed, but we are going to have the
prescription drug bill on the floor for discussion and debate.
We need to go to the Rules Committee, ask for an open rule so
we can amend that, and then try to put something in there that
will deal with this problem so people can get the lowest prices
on these drugs. So that's going to be the opening that we can
get to if we really work at it.
With that, thank you for being here. We'd like to have all
your suggestions so we can write to the FDA.
We stand adjourned.
[Whereupon, at 4:05 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
[Additional information submitted for the hearing record
follows:]
[GRAPHIC] [TIFF OMITTED] T7228.087
[GRAPHIC] [TIFF OMITTED] T7228.088
[GRAPHIC] [TIFF OMITTED] T7228.089
[GRAPHIC] [TIFF OMITTED] T7228.090
[GRAPHIC] [TIFF OMITTED] T7228.091
[GRAPHIC] [TIFF OMITTED] T7228.092
[GRAPHIC] [TIFF OMITTED] T7228.093
[GRAPHIC] [TIFF OMITTED] T7228.094
[GRAPHIC] [TIFF OMITTED] T7228.095
[GRAPHIC] [TIFF OMITTED] T7228.096
[GRAPHIC] [TIFF OMITTED] T7228.097
[GRAPHIC] [TIFF OMITTED] T7228.098
[GRAPHIC] [TIFF OMITTED] T7228.099
[GRAPHIC] [TIFF OMITTED] T7228.100
[GRAPHIC] [TIFF OMITTED] T7228.101
[GRAPHIC] [TIFF OMITTED] T7228.102
[GRAPHIC] [TIFF OMITTED] T7228.103
[GRAPHIC] [TIFF OMITTED] T7228.104
[GRAPHIC] [TIFF OMITTED] T7228.105
[GRAPHIC] [TIFF OMITTED] T7228.106
[GRAPHIC] [TIFF OMITTED] T7228.107
[GRAPHIC] [TIFF OMITTED] T7228.108
-