Federal Task Force Holds Fourth Meeting on Reimportation of Prescription Drugs
The Canadian pharmacy system cannot support the "huge demand for cheaper drugs" from U.S. residents, Canadian pharmacy groups testified on Tuesday at the fourth meeting of the federal Task Force on Drug Importation, Dow Jones/Wall Street Journal reports (Middleton, Dow Jones/Wall Street Journal, 4/27). The 13-member task force has held a series of meetings as part of a study -- mandated by the new Medicare law -- on the safety of reimportation and the effect of the practice on prescription drug development. Task force members, who were appointed by HHS Secretary Tommy Thompson, can consult with other federal officials and will hold a total of six "listening sessions" with consumer advocates, health care purchasers, providers, health care industry representatives, international stakeholders and the public. In the first meeting, consumer advocates testified that the United States could establish a safe reimportation system. In the second meeting, pharmaceutical company executives testified that reimportation would reduce the incentive for companies to invest in new medications and allow more counterfeit treatments to enter the United States. In the third meeting, the public testified about the effects of reimportation. The task force must report the results of the study to Congress by Dec. 1, although Thompson has said that he hopes to complete the study by mid-summer (California Healthline, 4/15).
Ronald Guse of the Manitoba Pharmaceutical Association said that reimportation of prescription drugs to the United States "will harm and has harmed the healthcare system in Canada." However, he added that "we have to recognize there is a certain amount of pressure in our country for this commercial activity to continue." CMS Administrator Mark McClellan asked whether U.S. and Canadian officials could partner to find "a safe solution that won't harm patients in either country," Dow Jones/Journal reports. He added, "In the U.S., there are real concerns about differences in the costs of brand-name medicines. In Canada, most generic medicines are significantly more expensive than in the U.S. and they're not as widely used as they are in the U.S. Maybe there is something we can learn from each other." Barbara Wells of the Canadian National Association of Pharmacy Regulatory Authorities said that Canadian and U.S. officials must partner to protect residents of both nations. "Canada gets less than 5% of pharmaceuticals in world, and United States gets 50%," Wells said, adding that in the long term, reimportation "is not in the consumers' best interest" because the practice would endanger the Canadian prescription drug supply. Iain Cockburn of Boston University testified that reimportation would "reduce the incentives for drug manufacturers to develop and produce innovative drugs," Dow Jones/Journal reports. Cockburn also said that reimportation would lead to a "substantial weakening, if not collapse, on the international patent system" because in the event that Canada faces a prescription drug shortage, the nation could declare an emergency and remove patent rights for medications. "There is a real possibility that Canada will pass the buck to another country further down the income chain. It's contagious," he said, adding, "We're deluding ourselves if we think Canada will respond passively. They may ban exports to United States" (Dow Jones/Wall Street Journal, 4/27).
The United States must convince other nations to remove price controls on prescription drugs to "reward the innovation that produces new medicines," rather than allow U.S. residents to reimport medications from those nations, witnesses testified at a hearing on Tuesday of two Senate Finance subcommittees, CongressDaily reports. Deputy Trade Representative Josette Shiner said that a recent trade agreement with Australia "can really lay the groundwork" for similar discussions with other nations. Shiner said that although in many nations "the social good of rewarding innovation bumps into the social good of providing affordable health care" through price controls, the United States must convince other nations that proper prescription drug prices are a "win-win" in which "everyone has an interest in access to affordable new medicines." Commerce Department Undersecretary Grant Aldonas said that he hopes the United States can convince some other nations to end price controls because "the Europeans have become aware that they are driving the research-based industry out of their countries" and to the United States, "the only country where they can generate a return on the huge investment" required to develop new medications (Rovner, CongressDaily, 4/27). Aldonas also said that the legalization of reimportation would lead to a "disinvestment in the United States, a loss of employment opportunities and frankly, a loss of an industry that is a huge multiplier" in terms of benefits to the U.S. economy (Reuters, 4/27). However, Aldonas said that higher prescription drug prices in other nations may not result in lower prices in the United States, but he added that higher prices would "enhance competition worldwide, which could lead prices to drop," the AP/Wall Street Journal reports. Although most witnesses opposed reimportation and price controls, Gerard Anderson, a professor of medicine at Johns Hopkins University, said that the U.S. government should use prescription drugs prices in other countries as a "benchmark for the prices it pays for pharmaceuticals, especially for Medicare," the AP/Journal reports (AP/Wall Street Journal, 4/27).
Sen. John Breaux (D-La.) said, "This is not so much a fight against domestic producers as a fight against foreign governments that fix prices" (Reuters, 4/27). Breaux added that "there's no question the rest of the world is sticking it to us" through price controls that force U.S. residents to subsidize a large part of cost of prescription drug research and development (CongressDaily, 4/27). Sen. Jon Kyl (R-Ariz.) said, "The answer in the United States is not that we should adopt price controls," adding, "We should work with other countries to reduce or eliminate price controls." Sen. Max Baucus (D-Mont.) agreed with Kyl, but he added that "leaving drug pricing policy entirely to drug manufacturers may not be the best idea either. The market has not contained prices that private plans and employers pay for drugs here in the United States" (Corbett Dooren, Dow Jones Newswire, 4/27). Sen. Rick Santorum (R-Pa.) said in the event that the United States cannot convince other nations to end price controls, the "prairie populist fire" of reimportation would continue in Congress. The hearing was held jointly by the Subcommittee on Health Care and the Subcommittee on International Trade (CongressDaily, 4/27).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.