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87–228 PDF 2003

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

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

CHRIS BELL, Texas

———

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

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

DIANE E. WATSON, California

BERNARD SANDERS, Vermont

(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

(III)

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

(1)

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 subVerDate 11-MAY-2000 10:00 Jun 04, 2003 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\87228.TXT HGOVREF1 PsN: HGOVREF1
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committee, 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

3

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-thepillbox 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.

4

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 strongarm 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

5

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:]

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8

9

10

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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.

13

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

14

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

15

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

16

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 onehalf 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.

17

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.

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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

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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 worldclass 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.

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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.

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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

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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:]

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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:]

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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.

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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?

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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:]

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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 efVerDate 11-MAY-2000 10:00 Jun 04, 2003 Jkt 000000 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 D:\DOCS\87228.TXT HGOVREF1 PsN: HGOVREF1
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fect 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——

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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-ofthe-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

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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.

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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——

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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,

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‘‘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.

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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

88

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.

89

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

90

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

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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

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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 foreVerDate 11-MAY-2000 10:00 Jun 04, 2003 Jkt 000000 PO 00000 Frm 00096 Fmt 6633 Sfmt 6633 D:\DOCS\87228.TXT HGOVREF1 PsN: HGOVREF1
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most. 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:]

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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 bioequivalent 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

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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:]

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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

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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:]

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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

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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?

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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.

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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

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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

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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.]

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