Rx DRUG COSTS: Editorials Weigh in on Legislation
As Congress considers legislation to allow wholesalers and pharmacists to reimport less expensive, U.S.-made drugs from abroad, several newspaper editorials and columnists have weighed in on the issue:
- New York Times: The savings generated from reimportation legislation are likely "to be smaller than sponsors expect because there are many ways the manufacturers can minimize impact," an editorial says. For example, drug makers could "raise their prices abroad, cutting the price differential;" restrict exports so that foreign countries only have enough drugs for their own use; or "change the dimension of the pills sold abroad so they are no longer the same as the drugs that are approved for sale in this country," raising the cost of regulation. The editorial adds that if the plan lowers pharmaceutical companies' profit margins, "there is some risk that manufacturers might cut their research budgets for new drugs." However, such a risk "seems small because the incentive to discover new drugs would remain substantial," and the editorial concludes that the legislation is "worth trying for the simple reason that American patients now bear the brunt of development costs for drugs that are used worldwide" (New York Times, 9/29);
- Washington Post: The editorial calls the reimportation measure a "phony drug bill" that is "unlikely to do much." According to the editorial, neither party "favors or believes in" the bill, but neither "is prepared for political reasons to oppose" it. Furthermore, even if the bill passes, "the problem of affordability will remain." The editorial states that the government "ought to help make [prescription drugs] available to people who need but can't afford them." Direct purchase of drugs by the government is risky without price controls and unpopular among the drug industry, but the idea of creating a "system of private intermediaries to buy and dispense" prescription drugs ... [is] at least grounds for a serious discussion," the editorial says. The reimportation bill, the editorial concludes, "is not even close to serious, except, perhaps, charitably as a symbol of the problem that it fails to solve" (Washington Post, 10/1);
- Chicago Tribune: The editorial supports the drug reimportation bill, but expresses concern that it may not "achieve what backers predict will be a 30%-50% drop in drug prices, at least without some negative consequences." While the editorial dismisses the argument made by pharmaceutical companies that reimportation will pose a safety risk to consumers, it says that in response to lifting the reimport ban, drug manufacturers may tighten the supply of exported drugs "to reduce what is available for reimportation -- thus limiting supplies elsewhere and, in fact, driving prices outside the U.S. higher" (Chicago Tribune, 10/1).
- Los Angeles Times: The reimportation bill, while a "roundabout and imperfect way of lowering U.S. prescription drug prices," is "also the most meaningful drug reform that can be hoped for in this Congress, where partisan bickering has blunted more sweeping reforms." The editorial states that drug companies could attempt to "undermine" the effect of the reimportation bill, but says, "[S]trong arm tactics could backfire, hurting drug companies economically through the loss of wholesale consumers that shift to other makers' products and politically by spurring consumers to demand what the industry fears most: price controls dictated by the federal government" (Los Angeles Times, 10/2);
- William Raspberry, Washington Post columnist: Raspberry interviews one of the original proponents of reimportation, Rep. Bernie Sanders (I-Vt.). Sanders provides anecdotes of how much more Americans pay for drugs than consumers in other countries and says that "pharmacies should be able to purchase these drugs the same way other companies purchase shoes, slacks or washing machines." Asked by Raspberry if the reimportation issue will "derail legislation" for a Medicare prescription drug benefit, Sanders says, "Even if we were able through my bill to lower the cost of prescription drugs 30%-50%, we would still need the prescription drug benefit." He adds that the reimportation bill would actually facilitate provision of a drug benefit because the legislation would save Medicare money on drugs. Sanders said that the pharmaceutical industry is the biggest obstacle to the legislation: "They have 300 paid lobbyists and funneled $6 million to the Republicans and $3 million to the Democrats. That's $9 million in political contributions we're going up against," Sanders says (Raspberry, Washington Post, 9/29).
Pfizer Ad Defends Industry
Drug maker Pfizer took out an advertisement in Friday's Washington Times featuring an essay from Alex Tabarrok, research director at The Independent Institute in Oakland, Calif., who disputes government studies that found Americans pay more for prescription drugs. Tabarrok writes that "government studies surveyed only a handful of drugs" and did not factor in the quantity of drugs consumed. Selling drugs for less in other countries, Tabarrok says, is ultimately a benefit to U.S. consumers, because it allows consumers in other countries to contribute toward research and development. "Put simply," Tabarrok writes, "if firms had to charge a single low price throughout the world, ... consumers in less-developed countries could not afford to buy any new drugs, and U.S. consumers would pay all of the R&D costs." He concludes that allowing companies to charge different prices for different markers "benefits consumers everywhere" (Washington Times 9/29).