The debate in Congress over prescription drug costs and coverage is less about health care than it is about campaign finance reform and the failure of America's political leaders to stand up for ordinary Americans against the pharmaceutical industry - the most powerful special interest on Capitol Hill.
Millions of Americans, including many seniors, cannot afford the outrageously high cost of prescription medicines -- paying on average 80% more for their prescriptions than do citizens in every other industrialized nation. Many of them suffer. Some of them die. And yet, year after year, Congress refuses to take action against the nation's most profitable industry, the drug companies.
Several years ago I became the first member of Congress to take constituents over the Canadian border to buy medicine. Women on that trip who were battling breast cancer were able to purchase the widely prescribed drug Tamoxifen for one-tenth the price that it was sold in the United States. The same exact drug! But it's not just Canada and it's not just Tamoxifen. We are the only industrialized nation that does not significantly regulate what the pharmaceutical industry can charge, and the results are clear. Americans pay, by far, the highest prices in the world for all kinds of prescription drugs.
The prescription drug situation in this country is nothing less than scandalous. While the pharmaceutical industry made over $30 billion in profit in 2001, it continues to receive billions in research help from the U.S. government, as well as huge tax breaks. In fact, the pharmaceutical industry pays an effective tax rate that is half of all other major industries.
The major drug companies also provide outrageous salaries and benefits for their top management. In 2000, the Chairman of Pfizer, William C. Steele, Jr. received $40,191,845 in salary alone. During that same year the Chairman and CEO of Bristol-Meyers Squibb had $227,869,513 in unexercised stock options, while the Chairman and CEO of Merck & Co. had $181,252,976 in stock options. Meanwhile, elderly citizens across the country take from their food budgets in order to buy the medicine they desperately need.
Since 1990, the pharmaceutical industry has spent over $234 million on campaign contributions and $80 million on lobbying. They contribute especially heavily to the committees that have jurisdiction over health care and their chairmen and ranking members. In this election cycle alone, Bristol-Meyers Squibb has contributed over $917,000 to the Republican Party, Pfizer has contributed $755,000 and American Home Products gave them $370,000. At a major Republican DC fundraiser last year the head of PhRMA, the industry's trade organization, was on the dais with President Bush.
Incredibly, the drug companies have over 600 paid lobbyists on Capitol Hill, more than one lobbyist for each member of the House and Senate. Some of their lead lobbyists are former Congressional leaders of the Republican and Democratic parties. The industry also spends millions to set up phony "consumer" organizations such as "Citizens for a Better Medicare" which lobby against serious prescription drug reform.
Where do we go from here?
Clearly, the President's proposal to help seniors is totally inadequate and would help, at best, only those with very low incomes. Sadly, the proposal brought forth during the last campaign by Al Gore and some Democrats is also inadequate. That proposal would not only do nothing to lower the outrageous prices of prescription drugs, it would also require a 50% copayment for medications below the catastrophic limit. The result would be seniors continuing to spend a very substantial amount for their medicine. In fact, under that proposal, seniors could save more money by simply driving over the Canadian border for their medicine- with no taxpayer subsidy whatsoever.
Any legislation to provide a meaningful Medicare prescription drug benefit must accomplish three goals: lowering the outrageously high prices of medications; ensuring that the drug companies don't rip off the federal government; and providing a strong, comprehensive benefit.
H.R. 1512, legislation that I introduced last year, would accomplish all three. First, consistent with the "free trade" approach that so many talk about in Congress, American prescription drug distributors and pharmacists would be allowed to purchase FDA safety-approved medicine anywhere in the world where they could get a better price than they currently pay. Second, when drug companies benefit from taxpayer research though the NIH, they would have to provide a "reasonable price" to consumers for that product. Those two initiatives alone would lower the cost of medicine in this country by at least 40 percent - without one cent of additional taxpayer money.
Finally, with lower drug prices for all Americans, and using the negotiating leverage that the government would have for the huge quantity of medicine they would purchase for Medicare beneficiaries, the Veterans Administration, the Department of Defense and other agencies, a voluntary 80-20 benefit could be established for seniors. This would be a significant benefit for America's seniors - something they deserve.
Will the current Congress pass this kind of legislation? I hope so, but I'm not overly confident. Unfortunately, too many members see their job as protecting the pharmaceutical industry, rather than Americans who need the medicine.
In my judgment, to successfully take on this enormously powerful industry we're going to need a strong grassroots effort, not unlike the civil rights movement. The fact is that access to life-saving medicine is a basic human right to which all Americans are entitled. People should not be suffering and dying because the pharmaceutical industry can use their vast resources to control our political process.
This issue has the moral depth of the civil rights movement. I believe that once seniors, the sick and their families march on Washington and get arrested in drug company offices, "we shall overcome."