Caledonia Argus

Gutknecht introduces bill to lower the cost of prescription medication

Posted: 8/6/02

By Shannon McKinney
Argus News Reporter

U.S. Congressman Gil Gutknecht takes the price of prescription drugs personally especially since his 85-year-old father uses them.

Seniors at the Valley View Nursing Home and Heritage Court in Houston received a special visit from Gutknecht as he talked about a bill that he is introducing into Congress that will make prescription drugs in the United States cheaper.

A recent eight-state survey of 11,000 seniors ages 65 years and older reported in The La Crosse Tribune showed that 22 percent of seniors either didnít buy prescription drugs or skimped on their doses to make them last longer because of the price of the drugs.

Seniors most at risk are those without any insurance who canít afford the prices.

The senate also recently rejected a plan to spend $390 billion over 10 years to help seniors pay for prescription drugs.

Gutknecht showed a chart of drugs and the price disparity between the average cost of the drug in the United States and the average cost of the drug in a European country.

For example the drug Coumadin, which is used as a blood thinner, costs $64.88 for a 30 day supply in the U.S. while the same amount only costs $15.80 in Europe.

Gutknecht explained that the reason prescription drug prices are so high is because they are being sold in the United States in a closed market. Americans who wish to buy prescription drugs outside the country are discouraged by the FDA (Food and Drug Administration), says Gutknecht.

The bill, H.R. 5186, would open the markets to other countries so that prescription drugs could be purchased by private individuals and they could also be purchased by pharmacists. This competition would lower the price of prescription drugs in America.

The markets became open with the NAFTA (North American Free Trade Agreement). NAFTA was suppose to have opened up free trade with other countries for everything, even prescription drugs.

FDA discourages importing prescription drugs

But, noted Gutknecht, those who try to purchase prescription drugs receive intimidation letters from the FDA.

He gave the example of one woman who while on a trip to Ireland ran out of a prescription for skin treatment. She went to a pharmacist in Ireland and showed him her prescription and asked if he could refill it. He did refill it with the same ointment, but for $100 less than she had paid for it in the U.S.

When it came time to refill the prescription, she called the pharmacy in Ireland and asked if he would send her a three month supply thus saving herself $300. The woman did indeed receive the package, but with it came a letter from the FDA stating ìYou may be importing illegal drugs and may be prosecuted by the federal government.î

Gutknecht stated, ìIt doesnít seem right that she was treated like a common criminal.î

FDA defends position

The FDA was contacted regarding its position on importation of prescription drugs. A spokesperson for the director of Pharmacy Of Affairs, a department of the FDA, stated that it is illegal for a private person or pharmacy to import prescription drugs from outside of the United States. He said even though a U.S. company may manufacture the drugs, the drugs are considered a risk once they leave the country because the FDA no longer controls how they are handled. He said, ìWe donít know how they were stored. High extreme temperatures could render them impotent.î

As for threatening letters, the spokesperson said the FDA is exercising enforcement discretion by notifying the U.S. customs to allow private persons with drug prescriptions of 90 days or less into the country. The woman referred to by Gutknecht may have received a letter informing her that it was illegal and also risky to import drugs. The FDA is allowing this type of importation because, ìWe didnít feel it would be right to go into old ladies pocket books, (who are transporting them across the border).î

Also, the FDA doesnít prosecute individuals, rather the DEA (Drug Enforcement Administration) could prosecute private individuals. The FDA has, however, sent letters to over 200 pharmacies, such as those who have web sites, who have imported prescription drugs. The regulatory authorities in other countries are then notified of the activities.

The spokesperson commented that they understand that Congress is working on these issues and hopes they come to a resolution.

Gutknecht says drug importation is legal

Brandon Lerch, a legal assistant to Gutknecht, on the other hand, explained that it is not illegal to purchase prescription drugs outside of the United States. ìItís not for them (the FDA) to make policy. Itís our job,î he said.

One reason given for trying to keep Americans from buying prescription drugs outside the U.S. is a concern for safety. In 2000, former President Bill Clinton signed into law the Meds Act which allowed for the importation of prescription drugs if the Secretary of Health and Human Services certified that there would be no additional safety risk to Americans. Lerch explained that that provision was meant to kill the bill, because no one can make that kind of guarantee.

The fact is Tommy Thompson, former Wisconsin Governor, and current Secretary of Health and Human Services has stated that he cannot make that guarantee.

Drugs are the only commodity subject to that provision.

Recalling a conversation with Thompson, Gutknecht takes the price of prescription drugs personally. He said, ìI told him ëIf youíre going to try enforce the prices against my 85-year-old dad, I will be on the courthouse steps to fight you.î

Prescription drugs a monopoly in U.S.

It is estimated, said Gutknecht, that American seniors will spend $1.8 trillion on prescription drugs in the next 10 years. He said, ìThat is almost unfathomable. I believe if you just open markets, you could cut those costs by 35%.î

Gutknecht said drug companies will argue that research will have to be cut if you allow Americans access to world market drugs. He added, ìThis is a shame on us. We have allowed a system that is a virtual market monopoly.î

He explained that drug research is already subsidized in three ways. First, through the tax codes. Fifty percent of the bottom line is a write-off. Also many drug companies operate out of Puerto Rico which has a big tax advantage.

Second, the federal government already spends $21.1 billion a year in basic research and grants.

Gutknecht stated that these studies pay high dividends and pharmaceutical companies will capitalize on the research. But, a third way that the research is subsidized is through the prices the public pays.

He said drug companies receive enough money for their research. Prescription drug companies have the highest profit margin in the industry at 20%. ìThey have every advantage,î he said.

1 million already import prescription drugs

He said it is estimated that one million Americans buy prescription drugs outside of the U.S. Some seniors even take trips to Canada to buy drugs more cheaply.

A few web sites have been set up the sale of prescription drugs through the internet. One such site is canadameds.com.

Gutknecht said prescription drugs donít help the sick if they are too expensive for the sick to afford.

Currently H.R. 5186 is in committee. If it passes out of the committee, it will hopefully be reported in the House of Representatives and voted on, explained Lerch. He added that of the many hundreds of bills that go through committee, only a minority are brought up for a vote.

He recommended that calling or writing a letter to the Speaker of the House of Representatives Dennis Hastert may increase the chances of it being brought up for a vote in September.

Those interested in supporting the bill may reach him at Dennis Hastert, House of Representatives, U.S. Capitol, Washington D.C., 20515.

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