Senator Patrick Leahy Joins In Introducing Bill
To Preserve Prescription Drug Discounts
For Americans From Canadian Distributors

WASHINGTON (Thur., Feb. 27) – Senator Patrick Leahy (D-Vt.) Thursday joined Senator Russell Feingold (D-Wis.) in introducing a bill intended to convince major drug manufacturers to continue to allow discounts for American consumers who buy prescription drugs from Canadian pharmacies. 

The Preserving Prescription Drug Discounts Act is a response to pharmaceutical giant GlaxoSmithKline’s announcement that it will no longer supply Canadian pharmacies that sell discounted prescription drugs to Vermonters and other American consumers.  It would disallow pharmaceutical companies that discriminate against Canadian pharmacies to claim tax deductions related to research and development. 

“Glaxo’s policy would punish American consumers, and it is not a policy that American taxpayers should support with government benefits like these tax credits,” said Leahy on the Senate floor Wednesday evening.  Leahy’s full statement delivered on the Senate Floor is attached.

Today Leahy met with Cheryl Rivers, executive director of the National Legislative Association on Prescription Drug Prices, to receive a resolution passed by the Vermont State Legislature warning GlaxoSmithKline that it may loose a portion of its Vermont market if it discontinues supplying Canadian pharmacies.

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Statement of Senator Patrick Leahy
Preserving Prescription Drug Discounts Act
February 26, 2003

Mr. President, tomorrow, Senator Feingold will introduce the Preserving Prescription Drug Discounts Act, and I am pleased to be an original cosponsor of this important legislation. 

This bill will address an issue of great concern to me and to so many Vermonters:  an American drug company’s threat to stop doing business with Canadian pharmacies.  This legislation is a response to the announcement by pharmaceutical giant GlaxoSmithKline that it will stop supplying Canadian pharmacies that provide American consumers the same discount that Canadians receive.

It is a sad commentary that in the richest, most powerful nation on earth, so many of our citizens are forced to choose between buying necessities such as food and heat, and the prescription drugs they need to live healthy, productive lives.  Many Vermonters in these difficult circumstances cross the border into Canada to purchase prescription drugs at dramatically lower prices – in some cases saving up to 80 percent.  Others gain access to these lower-priced drugs through the Internet.  There is a need for lower cost prescription drugs and it is unconscionable that at a time when pharmaceutical industry profits are soaring – a company such as Glaxo would target these most vulnerable consumers in order to protect their very large bottom line.

Vermont is so often at the forefront of developing innovative strategies to combat rising health care costs.  Just recently, Vermont announced it will partner with Michigan and Wisconsin to buy prescription drugs in bulk.  This strategy will save the residents of these three states millions of dollars – a step in the right direction toward making prescription drugs more affordable for our citizens.  Unfortunately for these same consumers, Glaxo’s new policy represents a giant step backward.

Both chambers of the Vermont State Legislature have responded swiftly to Glaxo’s troubling plan by passing resolutions strongly urging the company to reverse its policy.  The Vermont lawmakers even went so far as to suggest they may consider requiring all of Glaxo’s prescriptions to be considered through a review process before they could be prescribed through some state-funded programs. 

The Preserving Prescription Drug Discounts Act that my friend Senator Feingold will introduce tomorrow goes one step farther than the Vermont House’s recommendation.  Under this bill, companies that discriminate against Canadian pharmacies that pass along discounts to American consumers would not be allowed to deduct expenses related to research and development from their taxes.  Glaxo’s policy would punish American consumers, and it is not a policy that American taxpayers should support with government benefits such as tax credits.  It is my hope that quick passage of this measure will prompt Glaxo to reconsider its policy, and that other companies will think twice before copying it.

We have a responsibility to take the steps necessary to ensure that our citizens have access to the health care – including prescriptions drugs – that they need and deserve.  Among other issues, I have worked over the years to ease access to generic drugs, to ensure privacy for individual’s medical records and to continue to work to ensure that our seniors and individuals with disabilities will soon have a voluntary prescription drug benefit as part of the Medicare. 

The health care challenges facing our nation are complex and the solutions are not easy.  While it may take some time to find the necessary solutions to these challenges, in the meantime we must embrace the issues that we can promptly address.  That is what the Preserving Prescription Drug Discounts Act will do, and I hope my colleagues will join me in supporting Senator Feingold when he introduces this legislation tomorrow.

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