If you didn't know the background to this story, the idea behind it is rather daft: Why would American lawmakers push for legislation that allows the importation of drugs often sold by US-based pharmaceutical firms into the US to lower drug prices Stateside? You know the answer to that--American pharmaceutical firms have long used the US market as a large "cash cow" where margins are rather healthier than elsewhere. due to strong patent protection and enforcement. This state of affairs is due to a number of things, epecially strong pharmaceutical lobbying strength and an unwillingness to back away from "neoliberal" pricing schemes that, ironically, contradict the time-tested market principle of bulk discounts.As Sicko director Michael Moore famously observed, most developed countries have state-managed health programs which push for cost concessions (see below for the UK case). Meanwhile, developing countries are becoming more gung-ho in issuing compulsory licenses to enable domestic production of generic copies of patented drugs--especially to combat AIDS.
In any event, it's finally come to pass--at last in the House of Representatives: importation of drugs available for le$$ is being allowed, though a quick veto from President Bush is expected. Is there enough of a margin to override him? I think the margin may be there. Several things have happened that have allowed this to pass: Democrats taking a majority in Congress; lawmakers whose constituencies are especially fed up with being used as "cash cows" for drug firms; even the release of Sicko. It will be an interesting battle for Big Pharma in the next few months. I have previously featured a study that makes recommendations on how the drug industry needs to reform its business model. It seems that there is no better time for it to do so than now, especially when its grip on Washington (White House aside) seems to be fading:
However, the Galen Institute's Joel White highlights safety concerns against seeing drug importation as a cure-all for the disease of high drug prices Stateside. I do agree that it's not the best compromise, but not on safety grounds. Rather, the obvious answer is that lower prices charged Stateside would not force US consumers to "endanger" themselves. White also brings up that currently handy trump card of "China syndrome" for safety risksThe House passed legislation Thursday effectively permitting the importation of lower-cost prescription drugs from places such as Canada, Australia and Europe...
The bill, passed by a 237-18 vote, faces a promised veto from President Bush over its price tag, and the administration also opposes the drug importation provision...
The administration "strongly opposes" the drug provision, which would effectively permit individuals, wholesalers and pharmacists to import lower cost U.S.-made and FDA-approved prescription drugs from Canada and other countries.
The White House says there is no system in place to protect consumers from counterfeit or unsafe drugs, but an administration policy statement stops short of an outright veto threat. [Oh yeah, watch out for those dangerous D-I-Y drugs sold in backward places like Canada, Australia, and Europe.]
"I understand the intention to lower drug prices to the seniors, that is critically important," said Rep. Mike Rogers, R-Mich. "What we're doing is throwing open the gates to every (drug) counterfeiter in the world."
A move supported by drug companies to strike the drug importation provisions from the bill was defeated 283-146.
Supporters of the idea say it would save consumers great sums by allowing them to purchase U.S.-made medications from other countries where they often sell for much lower prices than in the U.S. Under current law, consumers are permitted to buy a 90-day supply in Canada.
Overseas, drugs can cost two-thirds less than they do in the United States, where prices for brand-name drugs are among the highest in the world. In many industrialized countries, prices are lower because they are either controlled or partially controlled by government regulation.
"I would prefer to stand up for my constituents in Missouri as opposed to the pharmaceutical companies keeping competition and low prices out of this country," said Rep. Jo Ann Emerson, R-Mo.
Similar drug importation language has passed the House in recent years but has been forced out by GOP leaders and the White House during House-Senate negotiations...
Despite the assertions of some pro-importation lawmakers who say that the only things endangered by drug importation are the large profits of the drug companies that overprice their medicines in our market, such a bill would actually expose Americans to grave health risks.
As the Food and Drug Administration has declared time and again, it simply can't guarantee the safety of imported drugs. Indeed, the agency doesn't even have the ability to thoroughly vet drug imports at their current levels.
On a typical day at the John F. Kennedy International Airport mail facility, for example, only 500 to 700 of the roughly 40,000 packages suspected of containing drugs are inspected.
And, according to a 2004 study, many of the packages that are inspected contain drugs that violate FDA safety standards. This includes expired medicines, counterfeit drugs and insecure packaging.
In other words, thousands of drugs not approved by the FDA already are making their way into the United States. If drug importation is legalized, many more unsafe foreign drugs will wind up in our medicine cabinets.
Meanwhile, even though the volume of imported drugs has more than tripled over the last several years, the number of drug inspectors has grown by just 10 percent, according to a study conducted by CongressDaily.
So if Congress formally legalizes drug importation, the already vast gap between drug imports and inspectors would widen.
Advocates of drug importation dismiss this fear by noting that the legislation under consideration by Congress would permit Americans to buy drugs only from "safe" countries such as Canada, France and the United Kingdom.
But the reality is not so simple.
First, because the FDA can inspect only a fraction of the foreign packages entering the United States each year, it would not be able to guarantee that the drugs Americans imported actually came from those countries. It is easy for sellers, especially online pharmacies, to misrepresent where they are based and where the drugs they sell are made.
A few years ago, for instance, the FDA purchased several "FDA-approved" drugs from a Web site that claimed to be "located in and operated out" of Canada. But after receiving the drugs, the agency concluded that neither the dispensers nor the drugs themselves were Canadian. Worse, they all failed most of the FDA's purity, potency and dissolution tests.
Further, the World Health Organization estimates that 50 percent of medicines sold through rogue Web sites are counterfeit. Counterfeit medicines range from pills containing no active ingredients to those containing highly toxic substances that can harm patients by failing to treat serious conditions and, in some cases, killing.
Second, it would be nearly impossible to determine whether a drug bought from London or Paris was actually manufactured there. This is because of the European Union's system of "parallel trade," under which goods, including prescription drugs, can be moved freely - and more or less anonymously - from one member state to another. So drugs purchased in Britain could have originated in a country with less stringent safety standards, such as Latvia or Cyprus.
For example, a large shipment of fake pharmaceuticals was stopped in the United Kingdom earlier this year, according to a report from the European Union's tax and customs commissioner. The fake drugs had originated in China and passed through the United Arab Emirates before British officials halted their journey to the intended destination, the Bahamas.
Given such complex shipping routes and myriad trade agreements, it would be nearly impossible for the strained U.S. customs service and the FDA to accurately track the details of every single drug shipment entering the country...
On every front, the health risks posed by drug importation are substantial. Instead of trying to legalize drug importation, Congress should clamp down on the unsafe imports already making their way here.
Lastly, here is a Reuters article depicting how the UK is renegotiating drug prices with reluctant Big Pharma. Was Michael Moore right about state-run systems? I will not wade into that territory, but I do suspect that it matters a lot how they're run. Note though how Big Pharma is increasingly under siege from every direction. If you're interested, you can read more about the UK's Pharmaceutical Price Regulation Scheme and current efforts to reform it that have led to this action. No rest for the wicked? Read on:
The British government is to renegotiate an agreement with drug companies on medicine pricing to ensure taxpayers get value for money, officials said on Thursday.
Health minister Alan Johnson plans to reopen talks on the current five-year deal covering sales of drugs to the state health service, which was due to run until 2010.
International drug firms operating in Britain, including global leader Pfizer (PFE.N: Quote, Profile, Research), said renegotiating the scheme now would bring instability and was bad for patients and business.
The move is the latest example of governments around the world studying ways to rein in the cost of drugs as medical advances and ageing populations strain healthcare budgets.
It follows a report by Britain's consumer watchdog, the Office of Fair Trading (OFT), which called in February for a radical overhaul of the current Pharmaceutical Price Regulation Scheme (PPRS) and a shift to a more value-based approach.
The OFT estimated the National Health Service could save around 500 million pounds ($1 billion) a year by scrapping the existing system that regulates profits but gives firms a free hand to set initial prices. Instead, it should adopt a system in which prices are based on therapeutic benefits, the OFT said.
"We agree with the OFT that it is time to develop a pricing system which is fit for purpose for the 21st century," Competitiveness Minister Stephen Timms said in a statement.
