Poison pill could be among drug imports
In recent testimony before Congress, Food and Drug Administration Commissioner Margaret Hamburg reiterated the agency’s opposition to the importation of prescription drugs from foreign shores. “There are genuine safety concerns,” she explained.
For years, lawmakers on both sides of the aisle have supported legislation to legalize foreign drug importation. Yet FDA officials under both Republican and Democratic administrations have resisted such efforts.
Why the consistent opposition to a policy that many believe will dramatically lower health costs?
Simple: FDA regulators have seen the evidence on drug importation, and it shows that buying drugs from overseas endangers lives.
The argument in favor of drug importation goes like this: With health costs on the rise, why deny Americans access to the cheaper drugs being sold in places like Canada and Europe? Such access, after all, will improve health outcomes by giving low-income Americans better access to needed medicines.
This line of reasoning is as straightforward as it is incorrect. Drug importation could actually harm health outcomes, as pharmaceuticals that originate overseas are of dubious quality.
In Europe, for instance, counterfeit drugs represent a $14.3 billion-a-year industry.
Dropping the ban on drug importation won’t just put lives in jeopardy; it will also stunt research into future cures. Drugs are cheaper in countries like Canada because of government-imposed price controls. Importing these price controls would make the business of drug research unprofitable.
Sad as it may seem, it’s simply not worth it for pharmaceutical companies to invest more than $1 billion to develop a new treatment for Alzheimer’s disease, for instance, if there’s little hope of recouping that money.
What about the potential cost savings of importing foreign drugs? This, too, is widely misunderstood. In 2004, the Congressional Budget Office estimated that importation would “reduce total drug spending by $40 billion over 10 years, or by about 1 percent.” The most recent CBO 10-year savings estimate for such a policy is $19 billion, less than half the initial projection.
So far, those lawmakers aware of the high risk of importing drugs have successfully defeated efforts to legalize the practice. Just this past December, the Senate voted down an amendment, introduced by Sen. Byron Dorgan (D-N.D.), that would have permitted Americans to buy drugs from overseas.
And yet, as Hamburg’s testimony demonstrated, the issue continues to resurface. It’s a good thing that FDA regulators understand that the costs of legalizing drug importation are astronomical, and that the benefits are almost nonexistent.
Sally C. Pipes is president and CEO of the Pacific Research Institute.