E-DRUG: Congressman S.Brown's letter to America's Pharmac.CEOs
---------------------------------------------------------------------
[copied from PHARM-POLICY; WB]
An Open Letter to America's Pharmaceutical CEOs
By U.S. Congressman Sherrod Brown (D-OH)
September 29, 1999
Well, you've outdone yourself.
When a majority of Americans believe Congress should establish a
prescription drug benefit for Medicare beneficiaries and buy your products,
you protest because you're afraid you wouldn't be paid enough. When some
members of Congress propose that senior citizens get the same price
discounts that large, profitable HMOs enjoy, you buy very expensive
television advertisements and accuse government of meddling in your medicine
cabinet. And when a few members of Congress suggest we bring some good
old-fashioned American competition into the monopoly drug pricing system,
you spend millions lobbying Congress and threatening to stifle the
development of new drugs if we take that step.
You have repeatedly told the American people -- who pay
significantly higher prices for drugs than any other nation in the world --
that any reduction in prices will cause you to drastically curtail your
research.
Frankly, it's difficult for some of us to take your threats
seriously.
For one thing, even before we pay the enormous drug prices you
charge us, you're getting plenty of help with your research and development
expenses from the American taxpayer. Congress -- where your multi-million
dollar lobbying operation has such great influence -- has granted you
enormous tax breaks for research and development. The National Institutes
of Health, with an annual budget of $15 billion, does a lot of research for
you without charge. You take the information, patent it, and market another
new and very lucrative miracle drug.
And let's look at your profitability. Last year, your industry made
$22 billion, 5 percent more than any other industry in America.
And I hear your compensation and stock options are pretty good too.
A woman in Elyria, Ohio, told me she spends $350 on prescription drugs every
month out of her social security check of $808. It takes 5,134 senior
citizens like her to pay your typical CEO salary every year.
Plus, you apparently have enough left over after R&D to funnel tens
of millions of dollars into direct-to-consumer advertising for blockbuster
drugs like Viagra.
So help me understand: Taxpayers fund much of the basic research
that produces new drugs. You are granted generous tax subsidies for your
own research. You charge outrageous prices to taxpayers to buy your drugs.
You tell taxpayers you can't do any more research if your prices drop to the
same levels as citizens in every other country in the world pay. You devote
huge amounts to promote lifestyle drugs. And you earn windfall profits.
It's becoming increasingly difficult for you to convince the
American people that prices can't come down to more reasonable levels
without bankrupting you.
You certainly have not missed an opportunity to tell your side of
the story -- I give you credit for that. Your lobbying efforts are
extraordinarily effective, as good or better than those of the National
Rifle Association and the managed care industry. You give lots of money at
campaign time to people who sit on all the right committees in Congress.
You back organizations that purport to express the views of patients and
researchers, but actually just parrot your views. You know how to work the
system.
But Congress also hears from constituents who take on part time jobs
to pay for one drug and who cut their dosage in half so it will last twice
as long.
Despite your well oiled lobbying machine, despite your scare
tactics, something will be done to bring down the cost of prescription
drugs. It's just a matter of what.
Here is one solution. Trust me, you're not going to like it.
I've introduced a bill that would permit competitors to enter the
market for drugs that are unreasonably priced, whether the drug's patent has
expired or not. The patent holder would receive royalties for being the
first on the market, and Americans would receive a price break fueled by
competition. The bill would also require drug companies to publicly disclose
audited financial information justifying the prices they charge.
The goal of these two provisions is simple: force the drug industry
to pay attention to the havoc you are wreaking on the lives of people like
my friend in Elyria. If drug prices are where they need to be, prove it to
us. Explain why royalties paid by competing companies would be insufficient
to fund the portion of research and development you actually pay for.
Explain why investing in consumer advertising for a product ostensibly
chosen by doctors, not consumers, is more important than investing in
research and development. Explain why prescription drug prices in the
United States are almost twice as high as those in Canada.
Please. Just tell us.
Brown, a Democrat from Lorain, Ohio, is the ranking member of
the Commerce Health and Environment Subcommittee and is the
author of Congress from the Inside: Observations
from the Majority and the Minority
--
--------------------
James Love, Consumer Project on Technology
love@cptech.org, http://www.cptech.org
P.O. Box 19367, Washington, DC 20036
v. 202.387.8030, f. 202.234.5176
--
Send mail for the `E-Drug' conference to `e-drug@usa.healthnet.org'.
Mail administrative requests to `majordomo@usa.healthnet.org'.
For additional assistance, send mail to: `owner-e-drug@usa.healthnet.org'.