Food and Drug Administration Safety and Innovation Act
Floor Speech
BREAK IN TRANSCRIPT
Mr. SANDERS. Mr. President, this amendment, to my mind, is an extremely important amendment and it has the support of some of the major consumer organizations in our country, including Public Citizen, U.S. PIRG, the Consumer Federation of America, Consumers Union, the National Committee to Preserve Social Security and Medicare, and the National Women's Health Network. These are some of the large consumer organizations in America representing tens of millions of our people.
When we talk about prescription drugs, it is important to understand that in our country we pay by far the highest prices in the world for prescription drugs. That is simply the reality. That causes enormous problems because millions of our people go to the doctor, the doctor writes a prescription, and then the person can't afford to fill that prescription. That is pretty crazy, because doctors are doing the diagnosis, telling the patients what they need; patients can't afford to pay for the drugs because they are the highest prices in the world in this country. This is an issue we have to deal with.
There are a number of reasons why prices in this country are higher than in Canada, Europe, and Scandinavia. Certainly one of them is that we are the only major country on Earth that doesn't have a national health care program so that the government can negotiate prices with the drug companies. So what happens in this country is the drug companies simply charge us what the market will bear--any price they can come up with by which they can make money. The end result is that in 2009, prices in this country were 85 percent higher than Canada, 150 percent higher than France, Italy, Sweden, Switzerland, and so forth and so on.
But the reason drug prices are high in this country is not just that we don't have a national health care program, it is because of the enormous amount of fraud that takes place within the pharmaceutical industry. In fact, every single year the major drug companies are ripping off the American people to the tune of billions of dollars a year because of fraudulent practices.
While I do not have enough time here today to recite every example of fraud that has been caught and prosecuted in the last 10 years. But here is the bottom line--and I am going to list some of the cases of fraud. Virtually every major pharmaceutical company in this country has either been convicted of fraud--i.e., ripping off the Federal Government, State government, or individuals--or else has reached a settlement. We have got to get a handle on this crisis. I am going to bore some people because it is a long list. Sadly, it is a long list. But it is a list that has to get out, and it is an issue we have got to deal with.
Abbott Labs is one of the top 10 pharmaceutical companies in the world. It had $38.8 billion in revenues and $4.7 billion in profits in 2011. Last month, Abbott reached an agreement with the U.S. Department of Justice to pay $1.6 billion for illegally marketing the antiseizure drug Depakote. According to the New York Times:
As part of the agreement, Abbott said that it would pay $800 million to resolve civil cases brought by federal and state authorities, $700 million in criminal penalties and $100 million to states in connection with consumer protection matters.
That was just last month, they are going to pay $1.6 billion.
In 2010, 2 years ago, Abbott and two smaller companies collectively agreed to pay $429 million to settle charges that they deliberately misreported drug pricing in order to hike reimbursements from Medicare and Medicaid. That is Abbott in recent years.
Pfizer is the largest pharmaceutical company in the world, $67.9 billion in revenues and $10 billion in profits in 2011. Pfizer in 2012, this year, allegedly avoided paying hundreds of millions in rebates due to State Medicaid Programs for Prontonix. Pfizer holds four different exclusives for Prontonix. Talks are under way with the U.S. Department of Justice to settle the charges for up to $2 billion for ripping off Medicaid.
In 2009, Pfizer agreed to plead guilty to a felony of ``misbranding Bextra with the intent to defraud or mislead'' and to pay $1 billion to resolve allegations under the civil False Claims Act.
In 2004, a division of Pfizer pled guilty to two felonies and agreed to pay $430 million to settle charges that it fraudulently promoted the drug Neurontin for a string of unapproved uses.
Johnson & Johnson is the second largest pharmaceutical company in the world, which had $65 billion in revenues and almost $10 billion in profits in 2011.
In 2012, this year, Johnson & Johnson illegally marketed Risperdal, an antipsychotic medication, to nursing home patients, and paid over $2 billion in fines, which constituted a mere 6.3 percent of sales revenue from the drugs.
In 2010, two subsidiaries of Johnson & Johnson illegally marketed the epilepsy drug Topamax for off-label psychiatric uses.
Now we go to Merck. Merck is the third largest pharmaceutical company in the world. In 2011, last year, Merck pleaded guilty to a criminal misdemeanor charge for violation of the Food, Drug, and Cosmetic Act, and paid a $950 million settlement for illegally promoting Vioxx for rheumatoid arthritis before that use was approved.
In 2011, Merck will pay the State of Massachusetts $24 million to settle claims that former subsidiary Warrick Pharmaceuticals reported inflated and false prices for asthma medications, causing the State's Medicaid Program to overpay.
In 2008, Merck reached a $670 million settlement for fraud on patients and Medicare/Medicaid, involving a conspiracy with hospitals to give the elderly cheaper drugs but charging them for the more expensive product.
Now we go to GlaxoSmithKline. GlaxoSmithKline is, again, one of the largest pharmaceutical companies in the world. It made profits of almost $44 billion in 2011.
GlaxoSmithKline in 2011 announced that it had reached an ``agreement in principle'' with the U.S. government to pay $3 billion to conclude the company's most significant ongoing Federal Government investigations, specifically illegal sales and marketing practices in Colorado and Massachusetts; overcharging the Medicaid rebate program; and illegal development and marketing of Avandia, a diabetes drug.
In 2006, GlaxoSmithKline agreed to pay $14 million to settle allegations that it engaged in patient fraud.
In 2005, GlaxoSmithKline paid $150 million to settle claims it overcharged the government for two antinausea drugs.
In 2003, GlaxoSmithKline signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid.
And on and on and on it goes.
When we talk about the high cost of health care, when we talk about the fact that the United States has the highest prices in the world for prescription drugs, it is important for us to address the crisis in terms of fraud within the pharmaceutical industry and the fact that virtually every major drug company has been found guilty of fraud or reached a settlement in terms of fraud charges.
In 2010, the pharmaceutical industry achieved a dubious distinction. It surpassed the notoriously corrupt defense contracting industry in defrauding the government. The pharmaceutical industry accounted for nearly half--$1.8 billion of a total of $4.1 billion--of the penalties collected in 2011 by the Department of Justice/Health and Human Services Health Care Fraud and Abuse Control Program.
In 2012--and this is quite amazing--the pharmaceutical industry is expected to pay out up to four times the amount of last year's penalty, between $8 billion to $9 billion in penalties due to pending fraud settlements with the Department of Justice. And those are the penalties for fraud that has been discovered. Who knows what type of fraud is taking place on behalf of the drug companies that has not been discovered.
Let me recapitulate. Virtually every major drug company has either been found guilty of, or settled charges of, significant fraud over the last 10 years.
The question arises--and this is an important question--is fraud within
the pharmaceutical industry the exception or, is it, simply put, their business model? Is fraud the business model of the pharmaceutical industry, which thinks that in most cases they can get away with the fraud, make huge profits and, in some cases when they get caught, they will in fact pay a penalty but the penalty will in no way match the kinds of huge profits they are making from their fraudulent activity?
The question the Senate has got to address is, Do we look away from this issue, do we ignore this issue, or do we finally address the very important issue of fraud within the pharmaceutical industry, fraud being practiced by virtually every drug company in our country?
It is obvious to anyone paying attention to the prevalence of pharmaceutical industry fraud that our punishments are not enough to address this problem, because apparently the drug companies are not too intimidated by the laws on the books. They think it makes business sense for them to continue going forward on their fraudulent activities.
The amendment I am offering would send a strong and clear message to the drug industry: Illegal behavior will not be rewarded with continued government-granted monopolies. There are some things--patients' safety, the devotion of scarce public resources to provide health care to needy patients--that are more important than drug company profits.
This amendment is designed to effectively deter pharmaceutical fraud by making government-granted monopolies contingent on good corporate behavior. I think that is the least we can do.
This amendment would penalize any instance of pharmaceutical fraud resulting in a civil or criminal judgment or a settlement with an acknowledgement of fault by revoking any applicable data or marketing exclusivity for the particular drug or product involved in the fraud.
giving pharmaceutical companies another factor to consider, when weighing whether to violate the law in their sales or billing practices.
If a company violated Federal or State law by inflating the price of a drug in Medicare or Medicaid billing or illegally marketing a medication, under my amendment that company would lose the remainder of any exclusivity period for that medication. Companies would be required to self-report qualifying violations to the FDA within 30 days.
Let me conclude by saying this: Our people are paying the highest prices----
BREAK IN TRANSCRIPT
Mr. SANDERS. Mr. President, this amendment, to my mind, is an extremely important amendment and it has the support of some of the major consumer organizations in our country, including Public Citizen, U.S. PIRG, the Consumer Federation of America, Consumers Union, the National Committee to Preserve Social Security and Medicare, and the National Women's Health Network. These are some of the large consumer organizations in America representing tens of millions of our people.
When we talk about prescription drugs, it is important to understand that in our country we pay by far the highest prices in the world for prescription drugs. That is simply the reality. That causes enormous problems because millions of our people go to the doctor, the doctor writes a prescription, and then the person can't afford to fill that prescription. That is pretty crazy, because doctors are doing the diagnosis, telling the patients what they need; patients can't afford to pay for the drugs because they are the highest prices in the world in this country. This is an issue we have to deal with.
There are a number of reasons why prices in this country are higher than in Canada, Europe, and Scandinavia. Certainly one of them is that we are the only major country on Earth that doesn't have a national health care program so that the government can negotiate prices with the drug companies. So what happens in this country is the drug companies simply charge us what the market will bear--any price they can come up with by which they can make money. The end result is that in 2009, prices in this country were 85 percent higher than Canada, 150 percent higher than France, Italy, Sweden, Switzerland, and so forth and so on.
But the reason drug prices are high in this country is not just that we don't have a national health care program, it is because of the enormous amount of fraud that takes place within the pharmaceutical industry. In fact, every single year the major drug companies are ripping off the American people to the tune of billions of dollars a year because of fraudulent practices.
While I do not have enough time here today to recite every example of fraud that has been caught and prosecuted in the last 10 years. But here is the bottom line--and I am going to list some of the cases of fraud. Virtually every major pharmaceutical company in this country has either been convicted of fraud--i.e., ripping off the Federal Government, State government, or individuals--or else has reached a settlement. We have got to get a handle on this crisis. I am going to bore some people because it is a long list. Sadly, it is a long list. But it is a list that has to get out, and it is an issue we have got to deal with.
Abbott Labs is one of the top 10 pharmaceutical companies in the world. It had $38.8 billion in revenues and $4.7 billion in profits in 2011. Last month, Abbott reached an agreement with the U.S. Department of Justice to pay $1.6 billion for illegally marketing the antiseizure drug Depakote. According to the New York Times:
As part of the agreement, Abbott said that it would pay $800 million to resolve civil cases brought by federal and state authorities, $700 million in criminal penalties and $100 million to states in connection with consumer protection matters.
That was just last month, they are going to pay $1.6 billion.
In 2010, 2 years ago, Abbott and two smaller companies collectively agreed to pay $429 million to settle charges that they deliberately misreported drug pricing in order to hike reimbursements from Medicare and Medicaid. That is Abbott in recent years.
Pfizer is the largest pharmaceutical company in the world, $67.9 billion in revenues and $10 billion in profits in 2011. Pfizer in 2012, this year, allegedly avoided paying hundreds of millions in rebates due to State Medicaid Programs for Prontonix. Pfizer holds four different exclusives for Prontonix. Talks are under way with the U.S. Department of Justice to settle the charges for up to $2 billion for ripping off Medicaid.
In 2009, Pfizer agreed to plead guilty to a felony of ``misbranding Bextra with the intent to defraud or mislead'' and to pay $1 billion to resolve allegations under the civil False Claims Act.
In 2004, a division of Pfizer pled guilty to two felonies and agreed to pay $430 million to settle charges that it fraudulently promoted the drug Neurontin for a string of unapproved uses.
Johnson & Johnson is the second largest pharmaceutical company in the world, which had $65 billion in revenues and almost $10 billion in profits in 2011.
In 2012, this year, Johnson & Johnson illegally marketed Risperdal, an antipsychotic medication, to nursing home patients, and paid over $2 billion in fines, which constituted a mere 6.3 percent of sales revenue from the drugs.
In 2010, two subsidiaries of Johnson & Johnson illegally marketed the epilepsy drug Topamax for off-label psychiatric uses.
Now we go to Merck. Merck is the third largest pharmaceutical company in the world. In 2011, last year, Merck pleaded guilty to a criminal misdemeanor charge for violation of the Food, Drug, and Cosmetic Act, and paid a $950 million settlement for illegally promoting Vioxx for rheumatoid arthritis before that use was approved.
In 2011, Merck will pay the State of Massachusetts $24 million to settle claims that former subsidiary Warrick Pharmaceuticals reported inflated and false prices for asthma medications, causing the State's Medicaid Program to overpay.
In 2008, Merck reached a $670 million settlement for fraud on patients and Medicare/Medicaid, involving a conspiracy with hospitals to give the elderly cheaper drugs but charging them for the more expensive product.
Now we go to GlaxoSmithKline. GlaxoSmithKline is, again, one of the largest pharmaceutical companies in the world. It made profits of almost $44 billion in 2011.
GlaxoSmithKline in 2011 announced that it had reached an ``agreement in principle'' with the U.S. government to pay $3 billion to conclude the company's most significant ongoing Federal Government investigations, specifically illegal sales and marketing practices in Colorado and Massachusetts; overcharging the Medicaid rebate program; and illegal development and marketing of Avandia, a diabetes drug.
In 2006, GlaxoSmithKline agreed to pay $14 million to settle allegations that it engaged in patient fraud.
In 2005, GlaxoSmithKline paid $150 million to settle claims it overcharged the government for two antinausea drugs.
In 2003, GlaxoSmithKline signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid.
And on and on and on it goes.
When we talk about the high cost of health care, when we talk about the fact that the United States has the highest prices in the world for prescription drugs, it is important for us to address the crisis in terms of fraud within the pharmaceutical industry and the fact that virtually every major drug company has been found guilty of fraud or reached a settlement in terms of fraud charges.
In 2010, the pharmaceutical industry achieved a dubious distinction. It surpassed the notoriously corrupt defense contracting industry in defrauding the government. The pharmaceutical industry accounted for nearly half--$1.8 billion of a total of $4.1 billion--of the penalties collected in 2011 by the Department of Justice/Health and Human Services Health Care Fraud and Abuse Control Program.
In 2012--and this is quite amazing--the pharmaceutical industry is expected to pay out up to four times the amount of last year's penalty, between $8 billion to $9 billion in penalties due to pending fraud settlements with the Department of Justice. And those are the penalties for fraud that has been discovered. Who knows what type of fraud is taking place on behalf of the drug companies that has not been discovered.
Let me recapitulate. Virtually every major drug company has either been found guilty of, or settled charges of, significant fraud over the last 10 years.
The question arises--and this is an important question--is fraud within
the pharmaceutical industry the exception or, is it, simply put, their business model? Is fraud the business model of the pharmaceutical industry, which thinks that in most cases they can get away with the fraud, make huge profits and, in some cases when they get caught, they will in fact pay a penalty but the penalty will in no way match the kinds of huge profits they are making from their fraudulent activity?
The question the Senate has got to address is, Do we look away from this issue, do we ignore this issue, or do we finally address the very important issue of fraud within the pharmaceutical industry, fraud being practiced by virtually every drug company in our country?
It is obvious to anyone paying attention to the prevalence of pharmaceutical industry fraud that our punishments are not enough to address this problem, because apparently the drug companies are not too intimidated by the laws on the books. They think it makes business sense for them to continue going forward on their fraudulent activities.
The amendment I am offering would send a strong and clear message to the drug industry: Illegal behavior will not be rewarded with continued government-granted monopolies. There are some things--patients' safety, the devotion of scarce public resources to provide health care to needy patients--that are more important than drug company profits.
This amendment is designed to effectively deter pharmaceutical fraud by making government-granted monopolies contingent on good corporate behavior. I think that is the least we can do.
This amendment would penalize any instance of pharmaceutical fraud resulting in a civil or criminal judgment or a settlement with an acknowledgement of fault by revoking any applicable data or marketing exclusivity for the particular drug or product involved in the fraud.
giving pharmaceutical companies another factor to consider, when weighing whether to violate the law in their sales or billing practices.
If a company violated Federal or State law by inflating the price of a drug in Medicare or Medicaid billing or illegally marketing a medication, under my amendment that company would lose the remainder of any exclusivity period for that medication. Companies would be required to self-report qualifying violations to the FDA within 30 days.
Let me conclude by saying this: Our people are paying the highest prices----
BREAK IN TRANSCRIPT
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