Q: Have pharmaceutical companies been unfair to American consumers? Yes: Americans should not have to pay significantly more for the same prescription drugs as our friends in Canada and Europe

0 Comments | Insight on the News, August 19, 2003 | by Gil Gutknecht

For its part, GlaxoSmithKline, under the auspices of renewed "safety concerns," is threatening to stop shipping its products to Canadian wholesalers and pharmacies that sell to American patients as of January 2003. Despite clinging to claims of the dangers of counterfeit and misbranded drugs, Glaxo has been unable to cite a single incident of damage caused by imported FDA-approved prescription drugs.

Pharmaceutical companies are urging U.S. consumers to ignore the man behind the curtain. Facts are stubborn things. And the fact is that Americans pay significantly more for the same prescription drugs as our friends in Canada and Europe. At the same time, U.S. taxpayers are subsidizing the rest of the world by paying a lion's share of development costs.

The safety issue is a red herring. The real issue is the prices Americans pay and the effect they will have on any prescription-drug benefit.

According to the Congressional Budget Office, seniors alone will spend $1.8 trillion on prescription drugs during the next 10 years. Proponents of the prescription-drug benefit claim the cost will not exceed the $400 billion set aside. Does anyone believe we will solve a $1.8 trillion problem with a $400 billion solution?

The history of federal entitlements teaches that costs will escalate. For that matter, considering that it is an entitlement and has no fixed budget, does anyone believe it will cost less than $1.8 trillion? In fact, according to Texas A&M University's Social Security and Medicare Trustees/Private Enterprise Research Center, the new drug benefit will cost a whopping $7.5 trillion.

What's worse, included in the entitlement are the wealthy. In a time when we are facing record deficits, is it wise to provide a prescription-drug benefit for Ross Perot? As my friend Rep. John Shadegg (R-Ariz.) says, "To provide a generous universal subsidy to retirees regardless of how wealthy is bad public policy."

We simply cannot afford to pass a prescription-drug benefit without considering costs. Without competitive pressure, the giant pharmaceutical companies well may shift savings from any discounts given to Medicare onto the backs of businesses, the underinsured and the uninsured. One way to keep costs in check is to open markets.

Because the House prescription-drug benefit failed to address the outrageously high prices of prescription drugs, I voted against it. This is a matter of generational fairness for our kids and grandkids. And it's a matter of giving seniors real reform that provides affordable prescription drugs for all Americans.

Congress should refocus the FDA on its fundamental mission of protecting public health, as well as open the United States to modern, industrialized markets for FDA-approved prescription drugs from FDA-approved facilities. Americans depend on competitive prices provided by free markets. Congress should act immediately to open up those markets fully and completely.

Modern bar-coded technology, together with counterfeit-proof packaging, can ensure safety and quality. Open markets will ensure affordability. Americans deserve world-class prescription drugs at world-market prices.