Push for drug reimportation gains steam

Despite safety concerns, states desperate for solutions to budget shortfalls are exploring reimportation as a cost-saving strategy.

By Joel B. Finkelstein, amednews staff. Oct. 13, 2003.

Washington -- Support for drug reimportation has grown in Congress and has spread to several states. But proponents still have much to overcome, including substantial safety concerns and opposition from the Bush administration.

"American consumers are held captive in a market that forces them to pay four, five, six ... even 10 times as much for the same prescription drugs as our friends in Canada and Europe," said Rep. Gil Gutknecht (R, Minn.), author of the Pharmaceutical Market Access Act.

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The measure's co-sponsor, Rep. Rahm Emanuel (D, Ill.), recently sent a letter signed by 142 members of Congress to the lawmakers negotiating a Medicare reform package urging them to include House reimportation provisions in the final legislation.

"Already, between 1 million and 10 million Americans buy their drugs from Canada on a regular basis. They often pay half the price, or even less, for the exact same drugs they can buy in the United States," Emanuel said at a recent press conference. "I want someone to explain to me why people from around the world come to America for their medical care, but Americans need to travel around the world for their medications."

But the Health and Human Services Dept. says reimportation of U.S.-made prescription drugs from Canada or other developed countries increases the risk of U.S. consumers getting tainted or ineffective medications.

"We don't have the authority or the resources right now to assure the safety of drugs that don't get imported through legal channels into the United States," said Food and Drug Administration Commissioner Mark McClellan, MD, PhD.

1 million to 10 million Americans regularly buy drugs from Canada.

Legislation to legalize reimportation has been passed by Congress before but has never been implemented because of the FDA's safety concerns. Earlier laws required the agency to certify that reimported drugs posed "no additional risk" to consumers.

"For manufacturers and distribution systems that don't want or don't need to comply with U.S. regulations, we can't assure safety right now, and that's a real concern under current law," said Dr. McClellan. "Hopefully, we can find better solutions."

Sponsors of the latest bill say they have solved this problem by mandating counterfeit-resistant labels to ensure the safety of reimported drugs. Recent revisions to the legislation have also dropped the requirement for the FDA to certify the safety of these drugs, effectively circumventing the agency's qualms.

Citing safety concerns, the pharmaceutical industry and some physician groups, including the AMA, have opposed attempts to legalize or legitimize drug reimportation.

The AARP, however, has expressed restrained support for federal reimportation legislation.

"Reimportation is not a panacea for the problem of soaring drug costs," AARP CEO William Novelli wrote in a letter to the bill's sponsors. "But it does hold the potential to place some downward pressure on the double-digit increases in costs that Americans face each year."

States are a new front

Governors and legislatures in a half-dozen states have entered the fray with proposals to stretch their budgets by reimporting cheaper prescription drugs from Canada as part of their employee health benefits programs. As of press time, the governors of Minnesota, Illinois and Massachusetts had asked their states' health agencies to examine options for reimporting drugs.

"If there's a way to do something to make prescription drugs more affordable, we have to explore that option," said Illinois Gov. Rod R. Blagojevich. "Prescription drugs from Canada are identical to the prescription drugs we purchase here in every single way but one -- the price."

The governors of Michigan, Iowa and Ohio are also reportedly considering measures to reimport drugs from Canada.

Meanwhile, the Massachusetts Legislature has been considering a bill to establish a state-run pharmacy benefit manager to reimport drugs from Canada. After a legal analysis, the bill was amended to direct the proposed benefit manager to advise and guide state residents in purchasing drugs from Canada without actually acting as an intermediary.

The Maine and Vermont legislatures have passed measures to request that GlaxoSmithKline not boycott Canadian pharmacies that sell mail-order prescription drugs to their residents.

By contrast, North Carolina and Oklahoma have been cracking down on companies that reimport drugs from Canada. And New Jersey's Legislature passed a law explicitly barring anyone from mailing reimported drugs into the state.

Paying a fair share

The higher price Americans pay for prescription drugs really should not come as a surprise to anyone, said Devon Herrick, an economist with the National Center for Policy Analysis.

It's well known that U.S. consumers bear the brunt of high research costs, but drugmakers have come under fire recently because of the large amounts of money they spend promoting their drugs, he said.

Herrick noted that some of those promotional dollars pay for free samples provided to doctors and handed out to millions of American patients.

Still, Americans don't like the idea that Canadians and Europeans are getting a deal at their expense, Herrick said. "There is not really anything you can do about it if you want innovative drugs to be available," he added.

But the popularity of reimportation seems to be largely buoyed by that sense of unfairness.

"I have long said Americans should pay our fair share, but we shouldn't be forced to subsidize the starving Swiss," Gutknecht said.

Herrick pointed out that price controls may mean that Europeans pay less for prescription drugs, but it also means that some new and life-saving drugs are simply unavailable to those same patients.

The real answer to high drug prices is for Americans to become better consumers, he said. And that starts with their physicians offering them both brand-name and generic alternatives that may better fit their budgets.