Drug Importation Won’t Save Dollars Or Lives

Drug Importation Won’t Save Dollars Or Lives

A recent oped in The Hill by MedShadow Foundation founder Suzanne Robotti claims that permitting Americans to import prescription drugs from Canada would save dollars and lives.

It would do neither. Prescription drug importation has several notable proponents, like Sens. John McCain (R-Ariz.), Amy Kobuchar (D-Minn.), and Bernie Sanders (I-Vt.), along with President Donald Trump. Without question, all of them sincerely want to make medicines more affordable. But importation wouldn’t save patients much money.

Instead, it would hamstring the Food and Drug Administrations’s (FDA) ability to protect American patients and slow the rate of medical innovation.

Time and time again, the FDA has warned the public that it cannot guarantee the safety of imported drugs. Former Commissioner Margaret Hamburg, for instance, has extensively cautioned against the threat of counterfeit or adulterated medicines from abroad.

In response, many lawmakers now advocate for more limited “re-importation” policies that would permit Americans to purchase price-controlled medicines from Canadian pharmacies only if the drugs were originally manufactured in the United States.

Voilà — the dangerous drugs argument becomes null and void, right?

Not quite. It would be virtually impossible to ensure consumers only buy drugs from “reputable” pharmacies. There are more than 3,400 rogue online pharmacies.And these sites can look quite legitimate — a major online Canadian pharmacy recently smuggled nearly $80 million of unapproved drugs into the United States.

Even if every single imported pill was safe and legitimate, Americans wouldn’t save as much money as re-importation advocates claim. In fact, consumers’ actual savings would be less than one percent of total drug spending according, to the U.S. Department of Health and Human Services.

In part, that’s because Canada would restrict exports to Americans to prevent local medicine shortages.

This has happened before. More than ten years ago, Canadian officials took steps to restrict the flow of drugs to American consumers. The executive director of the Canadian Pharmacists Association explained the decision, stating “Our supply chain is geared up to meet the need of 30 million Canadians, and we don’t have the scale of operation to be able to respond to the likely demand of the U.S. [population].”

Canada’s health minister at the time echoed that sentiment. “To me, it is a matter of common sense that Canada cannot be the drugstore of the United States. Neither American consumers nor Canadian suppliers should have any illusions otherwise,” Ujjal Dosanjh said.

Importing drugs would also endanger Americans’ long-term health by preventing the creation of new lifesaving medicines. American pharmaceutical companies, which are responsible for a majority of drugs being researched and tested today, rely on drug sales to offset their development costs.

Only 20 percent of drugs generate enough revenue to match their development costs.

Allowing drug re-importation would make it much harder to earn a return on investment. If Americans start purchasing drugs at below-market prices, revenues would collapse. Drug developers would have no choice but to throw in the towel on the next line of breakthrough treatments.

That’d be tragic not just for patients, but for society too. Developing cures for diseases like Alzheimer’s — which will cost the nation over a trillion dollars annually by 2050 — is the surest strategy to meaningfully reduce healthcare spending.

American medical innovation — not the re-importation of price-controlled drugs — is the only way to save dollars and lives. Suzanne has it backwards. American lawmakers should work to stop other nations from instituting price controls. Right now, the globe is free-riding off American research and development. If the global marketplace were to pay its fair share, drug prices would drop and innovation would explode.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.