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Testimony of Senator Byron Dorgan of North Dakota

I have here bottles of 3 different prescription drugs that are ranked among the top 20 in the United States in the number of prescriptions filled and sales volume. All of these drugs, incidentally, are approved by the U.S. Food and Drug Administration.

I have here the actual bottles for these medicines. This one happens to be Zoloft, which is used to treat depression. The company that produces these pills and puts them in different size bottles then sells them all around the world. It is exactly the same medicine produced by the same company, sold in different places. Buy it, for example, in Emerson, Canada, and you will pay $1.28 for a pill. Buy it 5 miles south of there in Pembina, ND, and you will not pay $1.28 for the same pill. Instead you will pay $2.34. It is the same pill in the same bottle, made by the same company in the same manufacturing plant. The only thing different is the price. The pill costs $1.28 in Canada, and $2.34 for an American consumer.

Or what about Zocor? Zocor is a very popular prescription drug. Pick up any Newsweek or Time magazine and see the multipage ads for this drug. I have here two bottles of Zocor made by the same company, with the identical manufacturing process. One bottle is sent to Canada where it costs $1.82 per tablet; the other is sent to a U.S. consumer who is charged $3.82: $1.82 for someone living in Winnipeg, $3.82 for someone living in Montpelier.

Norvasc is a prescription drug that is used to lower blood pressure. The bottles are almost identical--again, both bottles are by the same manufacturer, and contain the same pill. Norvasc costs the Canadian consumer 90 cents. It costs the U.S. consumer $1.25 per pill.

Or to look at this price disparity another way, the cost of a 1-month supply of Zocor--the same pill, by the same company, in the same bottle--is $54 when it is sent to a Canadian. When it is sent to an American, it costs $114.

Or Zoloft--again the same pill, by the same company, made in the same manufacturing plant--costs the Canadian $38 for a 1-month supply; the American pays $70.

Norvasc costs Canadians $27 for a one month supply and the same quantity costs Americans $37. I can show you medicine where the price inequity is 10 to 1.

The question our constituents in the States of Vermont, North Dakota, Minnesota, and Washington ask is: How can this be justified? This is the same product. If this is a global economy, why must I go to Canada to try to buy a prescription drug that was manufactured in the United States in the first place in order to buy it for half the price? That is what Americans all across this country are asking.

The companies that produce these medicines are able to access all of the ingredients they need to produce prescription drugs from all around the world in order to get the lowest prices. If the pharmaceutical manufacturers are able to benefit from the global economy, why then can the consumer not also access that same drug made in a plant approved by the FDA when it is being sold in Winnipeg for half the price?

What is the answer to that? Many of us believe American consumers should be able to also benefit from the global economy. My colleague from the State of Washington, Mr. Gorton, has sponsored his own legislation to address this issue and he is also a cosponsor of this amendment. All of us have to respond to our constituents.

This is not just a Canada-United States issue. Americans pay higher prices than anywhere else in the world. How much more do we pay? If Americans pay an average of $1 for a pharmaceutical product, that same product has a much lower average cost in every other industrialized nation. We pay $1; the Canadians pay 64 cents. We pay $1; the English pay 65 cents. We pay $1; the Swedes pay 68 cents. We pay $1; the Italians pay 51 cents. We are charged the highest prices for prescription drugs of any country in the world. The American people ask the question: Why?

Senior citizens are 12 percent of our population, but they consume one-third of the prescription drugs in America. I come from a State with a lot of senior citizens. They have reached the years of their lives where, in most cases, they are no longer working and are living on a fixed income. Last year, they saw, as all Americans did, prescription drug spending in this country go up 16 percent in 1 year. Part of that is price inflation, part is driven by increased utilization. Nonetheless, older Americans saw a 16-percent increase in prescription drug spending in this country in 1 year.

Those of us who have held hearings on this issue and who have heard from senior citizens know what they say. They tell us they are forced to go to the back of the grocery store first, where the pharmacy is, to buy their prescription medicines because only then will they know how much money they have left to pay for food. Only then will they know whether they are going to get to eat after they have purchased their prescription drugs.

This is an issue for all Americans, not just senior citizens, but it is an especially acute problem for senior citizens.

In January on one cold, snowy day, I traveled with a group of North Dakota senior citizens to Emerson, Canada.

First we visited the doctor's office--because it is required in Canada--where the North Dakotans who wanted to buy prescription drugs in the Canadian pharmacy showed the doctor their prescription from a U.S. doctor, and the Canadian doctor wrote a prescription for them. Then we went to a very small, one-room pharmacy just off the main street of Emerson, Canada, a tiny little town of not more than 300 or 400 people. Emerson is 5 miles north of the North Dakota border.

I stood in that pharmacy and I watched the North Dakota senior citizens purchase their prescription drugs, and I saw how much money they were saving on the prescription drugs they were buying.

As is often the case, senior citizens will take 2, 3, 4, or 8 different prescription drugs. It is not at all unusual to see that.

I watched these North Dakotans compare what they were paying in the United States to what they were paying at this little one-room pharmacy in Emerson, Canada. It was staggering.

They asked me the question: Why do we have to come to Canada to do this? Why can't our pharmacists come up here and access this same supply of drugs and pass the savings along to us?

The answer is that there is a Federal law in this country that says that only the manufacturer can import prescription drugs into the United States.

The amendment we are considering, offered by the Senator from Vermont, proposes to change that. He does not propose to do so in any way that would jeopardize the safety of medicines that are available in this country. He does not propose to in any way suggest that we should not maintain the chain of custody needed to assure a safe supply of prescription drugs.

But he does propose that we amend that law and replace it with a system that assures the safety of the medicine supply, while allowing pharmacists and drug wholesalers to go to Canada and go to other countries and access that same prescription drug, provided that it was produced in a plant that was approved by the FDA. This amendment assures not only the safety of the manufacturing process but also the chain of custody of the supply. In this way we will allow U.S. consumers the full flow and benefit of the global economy.

Why can't American pharmacists and drug wholesalers shop globally for prescription drugs, provided it is the same pill, put in the same bottle, manufactured by the same company in a plant that is approved by the FDA?

The answer is that they ought to be able to do that. There is no excuse any longer for preventing them from doing that.

Zocor, Prilosec, Zoloft, Vasotec, Norvasc, Cardizem--you can go right on down the list of the medicines most frequently used by senior citizens and compare what they cost here with what they cost in Canada and Mexico. Then ask the question: Why? Why are we in America charged so much more for the identical prescription drug?

The answer is simple: It is because the big drug companies can do it here. The pharmaceutical industry charges what the market will bear in the United States. The U.S. consumers are prevented from being a global consumer.

Let me say this about the pharmaceutical industry. I want them to do well. I support them on a range of things. I want them to be profitable, and I want them to be able to do substantial research. I do not wish them ill. I applaud them and thank them for the research they do to create lifesaving, miracle drugs. They only do part of the research, of course. A substantial part is also done through the National Institutes of Health, through publicly funded research. And we are dramatically increasing our investment in NIH.

But some will say to the Senator from Vermont: What you are doing will dramatically reduce research and development by the drug companies. These prices are what support research and development.

Hogwash. Nonsense. The fact is, a larger percentage of the research and development is done by the drug companies in Europe than is done in the United States. Let me say that again. More research and development is done in Europe than in the United States. And that comes from the pharmaceutical industry's own figures.

Take a look at the billions and billions of dollars the drug industry spends on promotion and compare that to what they spend on research and development.

The North Dakota Aging Services Division has launched an online directory of aging services in North Dakota which is searchable by program, county, or city.