Time to Stop Drug Reimportation

COMMENTARY Health Care Reform

Time to Stop Drug Reimportation

Aug 25th, 2004 3 min read
Nina Owcharenko Schaefer

Senior Research Fellow, Health Policy

Nina Owcharenko Schaefer is well known as a champion of patient choice and robust competition in America’s health insurance markets.
So the governor of Illinois plans to help residents of his state buy prescription drugs from other countries. And he's only the latest politician to join a movement toward "reimportation" that's popped up in other places nationwide.

It may seem like a good idea: help cash-strapped patients, particularly seniors, knock 30 percent or more off the price of drugs purchased in the United States. And as the governor, Democrat Rod Blagojevic, claimed in announcing the program, the federal government has failed to act on this increasingly significant problem.

Actually, the federal government has acted. Congress passed the Medicare Modernization Act of 2003, which, for now, gives seniors drug discount cards that reduce out-of-pocket expenses for some by as much as 70 percent.

Moreover, the governor's approach is penny-wise, pound-foolish. Our pharmaceutical industry is the envy of the world precisely because we don't take shortcuts, such as importing drugs. We don't let governments control research budgets. (Of 47 "blockbuster" drugs studied for a 2001 report, just four had significant National Institutes of Health funding, and most of that was through universities.) We don't let government set prices for drugs, and we don't begrudge drug companies their earnings for performing what's unarguably their most important function -- developing products that alleviate our pain or cure our maladies.

If the Food and Drug Administration allows Gov. Blagojevic's program to go forward, a few residents of Illinois will reap some savings. But not as much as many might expect, according to the Congressional Budget Office. The CBO estimates policies similar to that proposed by Gov. Blagojevic would result in savings of only about 1 percent and that, before long, prices will rise in the foreign countries from which Illinois residents would obtain their drugs, wiping out most, if not all, of hoped-for savings.

What happens if drug companies begin to limit drug supplies to these other countries? Some already have told Canadian pharmaceutical distributors the drugs they sell there are not intended for resale elsewhere, and at least one official in Ireland has expressed concern over the effects this will have on their patients. How far are we from having countries prohibit the sale of their drugs to patients outside their borders?

One can argue, of course, that even temporary savings are good. But what if, as many suspect, this is but a first step toward importing price controls for drugs made and sold in America? The proposal by Gov. Blagojevic and other local, state and federal efforts will not spur the innovation needed to keep our drug industry on top and our patients first in line for new treatments and cures for their ailments.

Supporters of importation may roll their eyes when safety concerns are raised, but the FDA -- widely viewed as a level-headed agency -- has been quite vocal in its concern over the safety of imported drugs. It refuses to guarantee they are safe and, apparently, with good reason.

In an independent fact-finding mission at the Kennedy Airport Mail Facility in New York found that of the 40,000 packages believed to be carrying drugs that arrive there daily, only about 500-700 were inspected. Many were found to be past their expiration dates or improperly packaged, which calls into question their effectiveness. This process of shipping drugs around the world also increases the chances of tampering.

If these imported drugs are safe, why do Canada, the "Canadian pharmacies" on the Internet and the states and localities that allow importation all disclaim any responsibility for their safety? Indeed, does Gov. Blagojevic plan to have the state of Illinois ensure the safety of the reimported drugs he proposes to legalize? If not, why not?

Gov. Blagojevic is right about one thing: The current system is far from perfect. But drug companies already lower their prices for poorer countries and also provide low-income individuals in this country access to their medicines -- yet still ensure that research on new drugs continues apace.

No one supports a pity party for the pharmaceutical industry. But it's only right that we protect the quality of drugs for American consumers and ensure drug makers the rightful fruits of their labors so they'll continue to have the incentive to do the important work we all count on them to do.

Nina Owcharenko is a senior policy analyst in the Center for Health Policy Studies at The Heritage Foundation.

Distributed nationally on the Knight-Ridder Tribune wire

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