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HOUSE OF REPRESENTATIVES             H.R. NO.              
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE  RESOLUTION
  REQUESTING AN EXAMINATION OF POSSIBLE STATE ACTIONS TO CONTROL
    EXCESS PROFITEERING BY PHARMACEUTICAL COMPANIES.



 1        WHEREAS, the pharmaceutical industry is an enormously
 2   lucrative one, the most profitable industry in the United
 3   States according to Fortune Magazine and the New York Times,
 4   providing the nation and the world with indispensable products
 5   essential to modern health; and
 6   
 7        WHEREAS, the pharmaceutical industry, although a health
 8   industry, is also in the business of making a profit; and
 9   
10        WHEREAS, new drugs can be extremely costly, and there have
11   been allegations for years that the pharmaceutical companies
12   are making a profit on the backs of the medically-needed, such
13   as the accusations a decade ago, as reported in the political
14   newsletter CounterPunch, that Burroughs-Wellcome/Glaxo that it
15   was making an unfair profit in the billions on AZT, a drug to
16   treat AIDS; and
17   
18        WHEREAS, the same allegations are being made today, such
19   as the current attempts, as reported in the New York Times in
20   November 1999, by Schering-Plough to add an extra three years'
21   extension on the patent for its prescription antihistamine
22   Claritin, which costs up to $2.50 per dose but could be
23   produced generically for 50 cents per dose, and, according to
24   the New York Times, a three-year extension of just this one
25   drug will cost consumers an extra $7,000,000,000; and
26   
27        WHEREAS, the National Institute of Health Care Management
28   reports that for every dollar spent on drug costs, half of that
29   was spent on advertising, driving up the costs of drugs; and
30   
31        WHEREAS, Time magazine reports that, by one estimate, drug
32   prices have risen approximately 12.2% annually since 1993,
33   while total health care costs have only risen at a rate of
34   5.1%, or less than half as much; and
35   
36        WHEREAS, the extremely high costs of drugs is a serious
37   problem for older consumers:  the recent report from the
38   Auditor, Actuarial Study and Operational Audit of the Hawaii
39   Public Employees Health Fund recommended that one solution to
40   reducing the amount of accrued liabilities in the health fund

 
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 1   is by setting an annual maximum on prescription drug benefits
 2   for retirees; and
 3   
 4        WHEREAS, the Auditor's report painted an alarming picture
 5   of skyrocketing health cost projections for the future; and
 6   
 7        WHEREAS, Americans are turning to other countries to try
 8   to obtain legal prescription drugs, as countries such as Canada
 9   and Mexico have far lower drug prices than America does; and
10   
11        WHEREAS, the State of Hawaii, in order to control
12   prescription drug costs, needs to investigate ways of curbing
13   this excess profiteering by drug companies so that drug prices
14   can come down to reasonable and affordable levels; now,
15   therefore,
16   
17        BE IT RESOLVED by the House of Representatives of the
18   Twentieth Legislature of the State of Hawaii, Regular Session
19   of 2000, that the Attorney General is requested to examine
20   possible state actions, including legal or statutory actions,
21   that the State can take to control excess costs by
22   pharmaceutical companies; and
23   
24        BE IT FURTHER RESOLVED that the Attorney General is
25   requested to report findings and recommendations to the
26   Legislature no later than twenty days before the convening of
27   the Regular Session of 2001; and
28   
29        BE IT FURTHER RESOLVED that a certified copy of this
30   Resolution be transmitted to the Attorney General.
31   
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35                         OFFERED BY:  ____________________________