This lesson plan was developed by staff members of the Globalization101.org project of the Center for Strategic and International Studies in Washington, D.C. To learn more about this free resource, please visit: www.globalization101.org.

For a copy of this Lesson Plan in Microsoft Word click here.


Introduction

In this lesson, students will learn about the issue of prescription drug prices in the United States. They will learn how globalization impacts the available remedies to lower the costs to American consumers. They will learn how various interest groups and international agreements impact the decision-making process and the alternatives available to the U.S. government. The students will participate in a mock U.S. Senate Commerce Committee hearing designed to give students practical experience, while applying their newly researched information.


Student Objectives

Unit Objectives

Your State Standard

To use the format of a Senate Committee hearing to consider the issue of prescription drug prices in the U.S. To increase knowledge of Congress and the lawmaking process. To work in cooperative groups and effectively assert a particular point of view. To evaluate the interdependent relationship of U.S. politics and government to world affairs. To understand the power of interest groups and lobbyists in the lawmaking process.

Click here for updated State Standards

Materials

1. Handout 1 (Role-Playing Instructions).
2. Handout 2 (Research Information).
3. Student's own research for the Role-playing exercise
4. Health Issue Brief:
   • Introduction: How Does Globalization Relate to Health?
   • The Global Public Health System
   • HIV/AIDS
5. News analysis on Drug Importation and its Impact on the World Pharmaceutical Market.
6. News analisis on Developed Countries Agree to Increase Access to HIV/AIDS Drugs for Poor Nations
7. Introduction to Supply and Demand (Introduction and Parts 1-4)

Time Required

2-3 Classes: (excluding research for role-playing exercise)


Procedure

Preparation Before Class

Students should read the following materials prior to the first class:

1. Health Issue Brief:
   • Introduction: How Does Globalization Relate to Health?
   • The Global Public Health System
   • HIV/AIDS
   
   
   
2. Introduction to Supply and Demand (Introduction and Parts 1-4)
   
   
3. News analisis on Developed Countries Agree to Increase Access to HIV/AIDS Drugs for Poor Nations

Introductory Discussion

1. The discussion should be focused on the following topics:
   
   
   • The relationship between disease and globalization
     
     
   • The impact of supply and demand on prescription drug prices
     
     
   • The role of international organizations in providing affordable health care in developing countries. (teacher notes: See the News Analysis: Developed Countries Agree to Increase Access to HIV/AIDS Drugs for Poor Nations)
     
     
   • The role of international agreements, such as the WTO TRIPS Agreement on domestic regulation of international trade. (teacher notes: WTO TRIPS agreement that creates a global standard for the time period for patents, as well as other rules on intellectual property government for all members (148) of the WTO. For more information click here).
   
   
   
2. The discussion should flush out a basic understanding of globalization, the relationship between pharmaceutical companies and developing countries, and a general understanding of the restrictions that the TRIPS Agreement places on the United States Congress to legislate on issues affecting international trade.
   
   
   Discussion Question #1: Ask the students, "What is globalization?" (teacher notes: This is an open-ended question geared to push the students to think about issues that affect people outside of the United States. Refer to this website for more information). After the students have offered their answers, or to aid the students in discussing the topic, either write or read the following definition of globalization: "Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology."
   
   Discussion Question #2: "What is international trade and how does globalization affect the cost of prescription drugs around the world?" The goal of this question is for students to grasp the concept of comparative advantage and the reasons why the same good can have different costs depending on the country. (teacher notes: Depending on student exposure to economics, refer to the Trade Issue Brief for a discussion of comparative advantage). Should prescription drug prices be equal throughout the world? For example, should citizens in the United States pay the same price for prescription drugs as citizens in Ethiopia, who earn less than $1 a day? Is this fair?
   
   Discussion Question #3: "If you were the President of the United States, how would you resolve the high cost of prescription drug prices in the U.S.?" (teacher notes: challenge the students' proposals. Follow up with questions, such as, "how would you pay for a nationalized health care system?" or "what about the impact on the drug manufacturers who will lose money on developing drugs if price controls are imposed?")
   
   
   
3. After students have gained a deeper understanding of international trade, the issue of prescription drugs should be introduced. The students should first read the Prescription Drug News Analysis on the globalization101.org website, "Drug Importation and its Impact on the World Pharmaceutical Market".
   
   
4. After reading the Prescription Drug News Analysis and prior to beginning the Role-Playing exercise, the teacher should introduce the pharmaceutical issues under contention to the students. These issues are:
   
   
   
   • The safety of imported drugs
   • U.S. compliance with the WTO TRIPS Agreement
   • U.S. patent law, and
   • The impact that importation from Canada may have on the global prescription drug market
   
   
   
5. The teacher should distribute Handout 1 to the students and divide the class into their respective groups for the exercise. To divide the groups, the teacher can allow the students to draw numbers from a hat, and then choose the group that they wish to represent based on priority.

Student Research

The teacher should reserve at least one-class period for the students to do research. Ideally, the school will have available computers for each group to conduct their research either in the classroom, library, or computer lab. The students should focus on the information contained in Handout 2 as a starting point for their research.


Role-Playing Exercise (See Handout 1 and Handout 2)

The class will participate in a mock Senate Commerce Committee hearing on the issue of prescription drug prices and the proposal to allow importation of prescription drugs from Canada. The purpose of this exercise is to provide students with practical experience and knowledge of the legislative process in the United States and to gain this knowledge through a global context.

The students will be divided into a maximum of 7 groups. There will be a group of Senators (3 to 5 students) and up to 6 interest groups (2-3 students each) representing various positions in the debate concerning ways to reduce the cost of prescription drugs in the United States.

The 6 interest groups:

1. The Food and Drug Administration
2. American Medical Association
3. Health Canada
4. American Association of Retired Persons
5. Governors Association
6. Pharmaceutical Industry
   
   

The 6 interest groups will present an oral argument either in favor or against allowing prescription drugs to be imported from Canada. Each group will have 2-5 minutes to give their presentation to the Senators.

The group of Senators will represent the current makeup in the Senate with the Republican Senators constituting the majority of the group (2 Republicans and 1 Democrat or 3 Republicans and 2 Democrats). One of the Republican Senators will be the Chairman of the Senate Commerce Committee and be responsible for the actual conduct of the hearing.

After all the interest groups have presented their arguments, the Senators will ask questions to each group. These questions will direct the group representatives to elaborate on or defend their stated positions in the oral argument.

At the conclusion of the hearing the interest groups will write a 2-4-page report on the hearing. The report should contain the proposals that were offered, the implications of the various proposals, and their recommendation to lower prescription drug prices in the United States. This report is to be written from a neutral perspective. The students are no longer representing the interest groups.

The Senators will write a report explaining their recommendations for lowering prescription drug prices. This report should identify the reason for adopting or not adopting each of the suggestions that were proposed at the hearing. If the Senators are unable to come to a unanimous conclusion, then the Senators will write a majority opinion and a minority opinion. This report should be 2-4 pages in total.


Conclusion

After the hearing and the Senate report, the class should discuss the impact of globalization on the cost of prescription drug prices in the United States. The students should come together and identify the following issues raised during the Senate hearing:

1. The oversight function of the FDA in approving drugs for the U.S. population
2. The purpose of the patent protection period for pharmaceutical companies to develop drugs
3. The impact of shortening the patent period on the TRIPS Agreement and any related impact on the global fight against HIV/AIDS in Africa.
4. The affect of allowing U.S. imports of lower-cost drugs from Canada on the global price of prescription drugs.
5. The benefits and costs of government nationalization of the prescription drug market compared to private industry.

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Globalization101.org
Lesson Plan on Prescription Drug Prices
Handout 1

Role-Playing Instructions

Senate Commerce Committee Hearing: The class will conduct a mock U.S. Senate Commerce Committee hearing on the issue of prescription drug prices and the proposal to allow importation of prescription drugs from Canada.

The students will be divided into a maximum of 7 groups. There will be a group of Senators (3 to 5 students) and up to 6 interest groups (2-3 students each) representing various positions in the debate concerning ways to reduce the cost of prescription drugs in the United States.

The 6 interest groups:

1. The Food and Drug Administration
2. American Medical Association
3. Health Canada
4. American Association of Retired Persons
5. Governors Association
6. Pharmaceutical Industry
   
   

The 6 interest groups will present an oral argument either in favor or against allowing prescription drugs to be imported from Canada. Each group will have 2-5 minutes to give their presentation to the Senators.

The group of Senators will represent the current makeup in the Senate with the Republican Senators constituting the majority of the group (2 Republicans and 1 Democrat or 3 Republicans and 2 Democrats). One of the Republican Senators will be the Chairman of the Senate Commerce Committee and be responsible for the actual conduct of the hearing.

After all the interest groups have presented their arguments, the Senators will ask questions to each group. These questions will direct the group representatives to elaborate on or defend their stated positions in the oral argument.

At the conclusion of the hearing the interest groups will write a 2-4-page report on the hearing. The report should contain the proposals that were offered, the implications of the various proposals, and their recommendation to lower prescription drug prices in the United States. This report is to be written from a neutral perspective. The students are no longer representing the interest groups.

The Senators will write a report explaining their recommendations for lowering the prescription drug prices. This report should identify the reason for adopting or not adopting each of the suggestions that were proposed at the hearing. If the Senators are unable to come to a unanimous conclusion, then the Senators will write a majority opinion and a minority opinion. This report should be 2-4 pages.

Return to Materials

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Globalization101.org
Lesson Plan on Prescription Drug Prices
Handout 2

Research Information

Once students are assigned their respective groups they should meet with their group members and decide their research strategy. All research materials are available online and students are encouraged to explore different resources. Below are the outlines of the main arguments that provide a starting ground for student research:

1. Food and Drug Administration (FDA): The FDA is most concerned with the safety and reliability of imported drugs since it is the FDA's responsibility to approve all drugs entering the U.S. market. The FDA is not opposed to generic drugs so long as the FDA approves them.
   
   
   Students can begin their research at the Food and Drug Administration website.
   
   
   
2. American Medical Association (AMA): The AMA is concerned about patient safety, but also the affordability of prescription drugs. The AMA supports legislation that would allow generic drugs to enter the market quicker than is currently allowed under U.S. patent law.
   
   
   Students can begin their research at the American Medical Association website.
   
   
   
3. Pharmaceutical Industry (Phrma): Phrma recognizes the concern among U.S. citizens that prescription drug prices are high. However, the prices are at such a level to recoup the research and development costs of these drugs. Phrma is concerned that a lower patent period will lessen the motivation to develop new drugs because the costs may not be recoverable.
   
   
   Students can begin their research at the Pharmaceutical Research and Manufacturers of America website.
   
   
   
4. American Association for Retired Persons (AARP): The AARP is concerned that its members are unable to afford the prescription drugs that they need to survive. The AARP is in favor of importing drugs from Canada and lowering the patent period for the pharmaceutical companies. While they are concerned about the safety and effectiveness of the imported drugs, they are more concerned about availability.
   
   
   Students can begin their research at the American Association for Retired Persons website.
   
   
   
5. Health Canada (HC): HC is testifying to promote the effectiveness of the approval process for prescription drugs in the Canadian market. HC is also concerned about the effect that legislation allowing importation of prescription drugs from Canada may have on their prescription drug supply. HC does not have much influence with Congress since there is no American constituency that they represent.
   
   
   Students can begin their research at the Health Canada website.
   
   
   
6. Governors Association: For this group, the students should select 1-3 states that currently import drugs from Canada. The Governors are in favor of importation. The Governors have negotiated deals with the Canadian pharmaceutical companies to allow inspections of the facilities to ensure that safety standards are met.
   
   
   Students can begin their research at the National Governors Association website.
   
   
7. Senators: The Senators need to develop questions to ask the interest groups after the oral arguments are presented. The questions should revolve around the effect of allowing importation on the safety of the drugs, the effect on the prices of prescription drugs, and the effect on the patent protection period and reconciling any changes with the WTO TRIPS Agreement.
   In general, the Republican Senators are protective of the pharmaceutical companies and concerned about the safety of imported drugs. The Democratic Senators are generally supportive of drug importation and are concerned that Americans are unable to afford the health care that they need. These are only generalities and do not need to be adopted by the individual Senators. Ideally, the Senators will enter the hearing with an open mind, looking to protect the best interests of the American people.
   
   
   Students can begin their research at the Senate Committee on Health, Education, Labor & Pensions. However, the Senators should utilize the additional resources below to effectively understand the arguments of the interest groups.

Each group must research the issue of drug importation and explore the possible alternatives relevant to their position. The following websites may be useful along with the websites already listed above:

• News analysis on Drug Importation and its Impact on the World Pharmaceutical Market
• News analysis Developed Countries Agree to Increase Access to HIV/AIDS Drugs for Poor Nations
• Globalization101.org "Useful Links"
• Article on WTO Debates Patents and Drugs Issue
• Text of the World Trade Organization TRIPS Agreement.

  Return to Materials

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For a copy of this Lesson Plan in Microsoft Word click here.

Contributed by Center for Strategic & International Studies (CSIS) and Globalization101.org.

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