Health Care

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Looking towards Canada: Drug Reimportation may be on the Horizon

Seniors may not be able to afford their medicines, despite the Medicare prescription benefit. The culprit: the rising cost of drugs.

U.S. drug prices are higher than any other country’s, and, clearly, the cost affects all Americans, not just seniors. Medicines can be bought for a fraction of the price in other industrialized nations like Germany, Italy, Great Britain, and Switzerland. For example, the breast cancer drug Tamoxifen costs about $360 per bottle in the U.S., but only $60 in Germany.

The cost discrepancy has caused consumers to pressure Congress to do something, so, they have. On April 21, 2004, a bipartisan group of Senators introduced the Pharmaceutical Market Access and Drug Safety Act of 2004, which will allow drug re-importation from Canada, the European Union, and some other industrialized nations.

Bill details

• The bill permits U.S. residents to bring home as much as 90 days worth of prescription medicines for their own use, but only from FDA-approved pharmacies in Canada or from any pharmacies in Australia, New Zealand, Japan, and the EU.
• 90 days from enactment, the bill will allow pharmacists and drug wholesalers to reimport drugs from Canada, and, after a year, from Australia, New Zealand, Japan, and the EU.
• Pharmacists and wholesalers will have to register with the Food and Drug Administration and pay a fee of 1 percent of the total cost of the drugs reimported. This fee will pay for additional inspectors and customs agents to control drug imports.
• To further ensure the safety of the drugs, pharmacies and wholesalers will have to track how the drugs are handled every step of the way - from manufacturer to store shelf. Legislators are calling this the "chain of custody."
• American pharmaceutical companies who try to restrict reimportation will be punished for violating U.S. antitrust law.

Supporters

A motley group of Senators has backed this bill, with Senator Byron Dorgan (D- North Dakota) at the lead. Co-sponsors include Trent Lott (R-Mississippi), Edward Kennedy (D-Massachusetts), John McCain (R-Arizona), Olympia Snowe (R-Maine), Tom Daschle (D- South Dakota), and Debbie Stabenow (D-Michigan), just to name a few.

The bill has a good chance of passing since it has strong bipartisan backing, but it won’t pass without debate. Senate majority leader Bill Frist (R-Tennessee) is dubious of reimportation; he says that the practice could endanger patients because imported drugs may be counterfeit, diluted, or old. However, Dr. Frist is unlikely to block the bill since he made a deal with Senator Byron Dorgan: Frist promised Dorgan a vote on the measure in exchange for lifting a hold on the nomination of Mark McClellan for administrator of the Centers for Medicare and Medicaid Services.

Opponents

The White House has also argued that reimportation poses a serious health risk. However, the administration softened its position in the months leading up to the introduction of the bill. It is unclear if Bush would sign such legislation or veto it.

Reimportation was specifically banned in the Medicare bill at the insistence of the White House and many Republicans. And though much of the Republican leadership has changed its mind on the matter, many legislators still argue against reimportation.

Some say that reimportation would create a two-tiered system in which people with adequate insurance get FDA-approved medications and those without full benefits get reimported medicines that do not necessarily have the same composition or work in the same way. Similar-not-same medications also pose a challenge to physicians.

The Gannet/Detroit News reports that Tom McGinnis, FDA director of pharmacy affairs, is also worried that pharmacies in rural areas will not be able to afford the 1 percent reimportation fee, so consumers in those communities may be left out.

Other opponents argue that American pharmaceutical companies that lose profits from reimportation are likely to cut their research and development programs, a move that could diminish innovations in medicine.

Drugs are already imported

Senator Kennedy says that the health risk argument against reimportation does not hold water when one considers the current system. Kennedy explained that one-fourth of medicines are already imported to the United States. A large percentage of drug manufacturing is outsourced to plants overseas where wages are cheaper. Current law allows drugs to be imported by the drug companies themselves, which then sell them at high U.S. prices.

Yet some economists, academics, and pharmaceutical industry representatives say that legalizing reimportation will not substantially decrease drug prices in the U.S. Drug companies are not likely to drastically reduce prices in order to compete with Canada and the E.U. and may not ship large quantities of drugs to Canada just to have them shipped back here. Critics doubt that reimportation will save money in the long run.

Let’s remember that the countries that have lower prices have laws that set prices and governments that often choose which medicines and treatments are available. We Americans live in a health system that is primarily a private one and, because the manufacturers of medicines can charge us more, we are actually paying for the research and development of new treatments.

Do you support drug reimportation? Is reimportation just a band-aid on the larger injury of unaffordable health care? Discuss these issues with other WomenMatter readers in one of our online forums. If health care is an important issue for you, sign up for an e alert. And don’t forget to register to vote and to contact your representatives.

Posted on: 5/5/2004

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