Sen. Gorton (R-Wash.) is asking the pharmaceutical industry to come up with a proposal before the April 17 Easter recess to address the international disparity in pharmaceutical prices.

Gorton intends to introduce a bill that would require manufacturers to use the same price in the U.S. as in neighboring markets unless the industry offers an alternative approach.

"I believe it is time to change the law so that Americans are no longer discriminated against with respect to the cost of prescription drugs," Gorton said in a floor statement April 4. "The best way I know to do that is to prevent drug companies from selling any product in Canada or Mexico at a lower price than they sell it for in the U.S."

Gorton said his legislation will follow the spirit of the Robinson-Patman Act, which "simply tells manufacturers that they can't act to undermine one business by selling the same product to a competitor at discounted rates, unless the price difference is due to legitimate quantity discounts."

Gorton's proposal may follow the outline of state bills that attempt to set a "global best price" for pharmaceuticals. Gorton is said to be willing to offer pharmaceutical companies some form of antitrust exemption to allow concerted action against countries where the industry believes prices are too low.

"I am not telling drug companies what price they have to charge for their product," Gorton declared. "I am simply saying that manufacturers can no longer discriminate against American consumers by charging Canadian and Mexican pharmacies lower prices than they charge the rest of the world."

Gorton maintains that he is holding off on introducing the bill in order to provide the industry with a chance to contribute to a workable solution.

Gorton met with Pharmaceutical Research & Manufacturers of America President Alan Holmer and company representatives the week of March 27. After the meeting, Gorton's approach to the price issue took on a different tone in reaction to a subsequent PhRMA campaign to generate opposition to the "Gorton price control bill" on Capitol Hill.

Issuing the ultimatum April 4, Gorton maintained that "several Republican senators have committed to supporting my idea and the Majority Leader has expressed interest. My proposal would most certainly get a hearing and could even pass the Senate this year."

"I suggest that this is serious incentive for the drug companies to develop some ideas," Gorton said. "Otherwise, I am prepared to introduce my proposal prior to the April break." Industry representatives met again with Gorton on April 7.

While Gorton's assertion that an international pricing bill could pass the Senate this year is ambitious, PhRMA is understood to be concerned that other border-state Republicans will be tempted to sign on to international pricing bills.

Sen. Jeffords (R-Vt.) introduced legislation in 1999 that would allow personal importation of prescription drugs from Canada. Rep. Sanders' (I-Vt.) decision not to challenge Jeffords for the Senate seat removed some of the pressure behind Jeffords' interest in the subject.

Another prominent Republican, however, may be forced to become more visible on the pricing issue. Sen. Snowe (R-Me.) faces the attention raised to drug prices by House Democrat Allen who has been a primary sponsor of House pricing bills.

The most significant concern for the pharmaceutical industry from Gorton's bill is that it refutes PhRMA's contention that the issue of drug use by the elderly is an access issue and not a price issue.

"Instead of engaging me in a real discussion about the pricing issue and the vast difference between the cost of drugs in Canada and the cost of drugs here, I learned about the companies' commitment to having drug coverage extended to Medicare beneficiaries," Gorton declared.

"Expanding Medicare coverage will help some people, but it doesn't help everyone, and it seems more like an effort by the drug companies to increase their markets at high prices, as opposed to dealing head on with policies that encourage them to charge Americans more for prescription drugs than they charge people in Canada and around the world."

Sen. Gorton Sets April Deadline For Alternatives To International Pricing Bill

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