Hearing of Special Committee on Aging - Internet Pharmacy and Drug Importation: Exploring the Risks and Benefits
Hearing of Special Committee on Aging - Internet Pharmacy and Drug Importation: Exploring the Risks and Benefits
Senator Wyden. Thank you, Mr. Chairman. I just want to say it is a thrill to see you, a personal friend and an Oregonian,
with the gavel in your hand. Back when I was director of the Gray Panthers, as you noted, we couldn't even contemplate the
day when an Oregonian would have this kind of clout on issues important to seniors, so we are really thrilled that this day
has come about.
The Chairman. Thank you, Ron.
Senator Wyden. Mr. Chairman and colleagues, I think Senator Smith has chosen an important topic because in my view, current Federal policies for regulating Internet pharmacies and prescription drug imports virtually ensure that many vulnerable
elderly people get ripped off today. Specifically, I believe that becuse the policies for overseeing Internet sales do not
have the muscle to ensure that our country stays in front of the rip-off artists who constantly get more inventive in trying
to come up with ideas to exploit the elderly.
Second, our policy with respect to the importation of pharmaceuticals that can be certified as safe has become so
frustrating that many, particularly our States, have gone off on their own to try to address this issue. It seems to me, our
inability to come up with a coherent national policy again ensures that many older people aren't given the opportunity to
purchase medicines that are affordable.
The other reason that this is such an important hearing is the Wall Street Journal reported yesterday that just in the
last few weeks, pharmaceuticals have spiked again very significantly. They report, for example, Lipitor, the very
popular cholesterol drug, just in the last few weeks has gone up about 5 percent. They note that of the 50 biggest selling medicines 31 had price increases since November.
So I think this question of how we look at the matter of containing pharmaceutical prices is important. Senator Smith
always works in a bipartisan way, and I think he knows that is my interest. Toward that end, Senator Snowe and I will be
introducing legislation next week so that Medicare would be in a position to start using the kind of cost containment tools
that the private sector uses in our country to hold down the cost of medicine.
It is incredible that everybody in the United States who purchases medicine in the private sector, when they purchase a
significant volume and then they look at buying more, they ask, what kind of a discount will you give me? What can I get when I negotiate with you? The Medicare program is, as far as I can tell, one of the few, if not the only, program that isn't using
marketplace forces, isn't using what is available in the private sector to hold down the cost of medicine. Senator Snowe
and I will be going after that in a bipartisan way next week.
Mr. Chairman, again, I look forward to many of these kinds of sessions and particularly the opportunity to work in a
bipartisan fashion on issues that are so important to millions of seniors and their families.
BREAK IN TRANSCRIPT
Senator Wyden. Doctor, thank you, and let me start by seeing if I can give a fairly simple example. I find it
compelling with respect to the case for importation from Canada, because in Canada, they have a lengthy review process
for their pharmaceuticals and many on-line pharmacies there can get certified. They have an actual program for it.
What would be wrong, then, with having a U.S. policy that would allow for U.S. citizens to be directed to those on-line
pharmacies?
Dr. Carmona. Senator, from our standpoint, it is not a right or wrong issue. We were looking at the science to provide
information to you. From our perspective, we have stated that commercial importation could be a viable option. We wanted to
make sure that you all in your deliberations had all of the information as you move forward to decide it.
Senator Wyden. Would you support that policy, you personally? I think what is so striking about this is, and again, it comes back to the town meetings that Senator Smith and I have had, and I have had this in other sessions with other colleagues because this is the area I have tried to specialize in. It seems like every time we bring this issue up, those of us who have worked in a bipartisan way--I was one of those Democrats who voted for the prescription drug bill. I have got the welts on my back to show for it. [Laughter.]
Every time we work with the administration on this issue, the goal posts keep moving and we just never seem to have an
opportunity to get it across.
So would you be supportive personally of a policy related to Canada, that when the drugs went through a lengthy review
process and a pharmacy was certified, it ought to be possible to direct our citizens to those on-line pharmacies should that
be U.S. policy?
Dr. Carmona. Let me say, Senator, that as it relates to any specific policy, before I commit, I would certainly have to
look at it.
Second of all, the goal posts for us are pretty fixed. They are all stated in this report quite emphatically based on the
questions that Congress posed and we answered those. My job as Surgeon General is to ensure the health and safety of the
citizens of the United States, as I know all of you are working in that direction, also. So any policy that you look at that
you would like to move forward, the magnifying glass I will hold to it is, is it safe? Can we certify this policy that every American will be guaranteed safe medications? In that case, if that is your will, I would be happy to support such a policy.
Senator Wyden. Why don't we do it this way. I would like you, if you would, within 30 days, to get back to me and tell
me what, if any, problems you see with respect to the proposal I have made. I have given you a concrete example as it relates
to an area where I think there is lengthy documentation attesting to the safety, that could work and could provide a tangible opportunity to address this issue. If you would, within the next 30 days, simply tell me what, if any, problems you see with that and----
Dr. Carmona. Yes, sir, I would be happy to.
Senator Wyden. Very good. The second area that I want to talk to you about is rip-off artists with respect to Internet
sales of pharmaceuticals and other products to seniors. Who at the Federal level is responsible for being the watchdog against
these rip-off sales in the health care area? I think one of the reasons we have problems and that the bad guys always seem to
be out in front is I can't find who is responsible for making sure that the Internet is not a safe haven for rip-off artists. In your view, who is responsible?
Dr. Carmona. As it relates to the----
Senator Wyden. Health care.
Dr. Carmona. Well, I am saying, as it relates to the health care of the public and the commerce involving drugs and
devices, it would be our Federal Drug Administration who is looking at that. But I think one of the problems--you have hit
the nail on the head, that there are many that take advantage of the Internet. We have found hundreds of websites that
purport to be Canadian websites, some with a stamp of approval saying, ``sanctioned by the FDA,'' who really are nothing more
than somebody in a foreign country placing that in Canada, drugs being shipped from another country, billings going to
someplace in the Caribbean, and so people do take advantage of it.
I agree with you. I think there are multiple jurisdictions there because if you were marketing a product that was not, say, a pharmaceutical, the FDA would have no responsibility. I think then it becomes a trade issue and there are a lot of people who are stakeholders in that endeavor.
Senator Wyden. Do you have the sense that it would increase the measure of safety if we let the pharmacists rather than the individuals drive these retail sales over the Internet? Oregon, for example, has a proposal Senator Smith and I have been
interested in that essentially uses the pharmacist as the hub of the effort to both ensure safety and have oversight. Would
that make for a more compelling case for Internet sales, if you used the pharmacist as the focus rather than the individual
simply going online and searching for what is out there?
Dr. Carmona. Senator, if you are saying American licensed pharmacists working in regulated pharmacies in the United
States who would partner with Internet companies who were FDA-regulated and sanctioned and we had a pedigree on the drugs that could guarantee the safety, I think that would be a viable option.
Senator Wyden. I hope if the administration takes that position that the goal posts won't move again and that we will
have to find yet another way to get over the bar, because I think what our constituents are frustrated about, Oregon has a
proposal right in front of the Federal Government. We haven't been able to even get a meeting with the Federal agencies to
talk about it. Every time we get right up to the football, kind of like the cartoon figure, the football gets snatched away. We
would like to find a way to do this in a bipartisan way.
Thank you, Mr. Chairman.
BREAK IN TRANSCRIPT
Senator Wyden. Thank you, Mr. Chairman. I just wanted to ask one additional question.
I think you heard me, Doctor, go through this problem of the significant price spike we have seen in prescription medicine just in the last few weeks. Lipitor is up 5 percent, for example. Lipitor is a blockbuster drug. Now since you in your testimony talked about the prescription drug bill and its impact on cost containment specifically, I would be interested in your thoughts as to why prescription drugs have spiked up so dramatically in the last few weeks. I wouldn't have asked you this question unless you put the topic in play in your testimony, but I came concerned about the price spike. I noted your comments in your testimony. I would be curious, your thoughts about why prescription drugs have soared yet again in the last few weeks.
Dr. Carmona. The spike that you are speaking of, I am aware of only through the media. We haven't studied that spike. The
question of cost of prescription drugs and why there was a perception of the American public bearing an unfair share of
that cost is one that we did discuss during the task force and received a great deal of testimony from economists as well as
from the drug industry and many stakeholders who had expertise in the area. A lot of it was fueled by the issue of the cost of
research and development, the time it takes from bench to the market for a drug being 15 to 20 years at $800 million per drug
and maybe only 20 percent of the drugs make it, so there is a huge overhead even for your failures. That was one component.
Senator Wyden. But that is year in and year out, Doctor.
Dr. Carmona. Yes.
Senator Wyden. I don't want to belabor this, but I know the Wall Street Journal, has said that possibly one of the factors
in the price spike in the last few weeks has been that companies are maneuvering given the fact that the bill is about to kick in. Do you see that as a factor?
Dr. Carmona. Sir, it very well could be, but I have no knowledge. I would be guessing right now since I have not studied that. The only factual information I could give you is what we have studied within the task force report, which is why I reverted my answer back to what we had found.
Senator Wyden. Your testimony said that the law contains provisions to hold down costs. So you obviously have been
looking at the cost containment issue. What provisions in the law contain costs? I ask you that as somebody who voted for the bill. I would be interested in your thoughts as to what provisions in the law contain costs.
Dr. Carmona. Well, the open market, first of all, is maybe one of the best ways to contain costs and foster competition. So any provisions that we have that would allow for open market competition, I always think would be in the best interest of the American public. When we begin to manipulate markets or have price controls in one sector and not another, it becomes
very difficult then to start comparing. You are comparing apples and oranges.
I mean, it is deceivingly simple to say that let us bring in a drug from Canada because it is cheaper. That is OK, but again, not being the expert but asking the questions at the task force with my task force was, well, what are the implications of not just one but millions of drugs flowing across the border, not just today, but next year and in 10 years? What will happen to our markets? Is this going to hurt us in the long run even though it may help those in need today?
That is the information that we solicited and have in this report. Outside of that, I was not asked to look at or study
those issues, and specifically the spike in the last couple of weeks. I don't have that information, sir.
Senator Wyden. You have got six United States Senators here who are not exactly a price controls caucus. I mean, we are,
all of us, Democrats and Republicans, talking about marketplace approaches, and yet we just don't seem to be able to get
anywhere with the administration in terms of advancing ideas that will allow us to do it. But Senator Snowe and I will be
taking another crack at it next week.
Dr. Carmona. Yes, sir.
Senator Wyden. The Medicare program is not even doing what smart private sector buyers are doing when it buys Medicine. Every private sector buyer who buys in volume says, ``Look, here is an opportunity to get a better deal if I am buying in volume.'' This is not a government program. This is what Weyerhauser does or an auto company does or a hardware store or anybody else. So when you said in your testimony that the law contains provisions to contain that cost, there has been a
price spike in the last few weeks with respect to medicine. I would like to see what we are going to do with it on a bipartisan basis and I hope we can continue to work with you in that regard.
Thank you, Mr. Chairman.
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