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HEALTH CARE

Apr 24, 2004

HEALTH CARE

Drug Prices Take Center Stage

Facing a groundswell of support from local citizens, municipal
and state governments, a bipartisan group of Senators yesterday agreed to introduce a bill permitting the importation of lower-cost prescription drugs from Canada and other industrialized nations. The FDA last month acknowledged that it would need just $58 million to set up a system to insure imported drugs are safe ?– a bargain compared to the potentially hundreds of millions of dollars U.S. consumers could save on drug prices. The Financial Times notes that the debate over reimportation "may prove a ?”catalyst for changing federal drug-pricing policy " as "the issue has sparked a much wider debate over how drugs are priced in the U.S. " American taxpayers currently fund up to one third of all prescription drug research and development for the pharmaceutical industry, yet are forced to pay the highest prices for medicines in the world. The problem has gotten so bad, that even Sen. Trent Lott, "a conservative friend to the pharmaceutical industry" said he could no longer defend drug prices to his elderly mother .

DON'T GET TOO EXCITED YET: Despite the bipartisan coalition pushing reimportation, the bill may have some very powerful opponents in Congress. The NYT notes that while Senate Majority Leader Bill Frist (R-TN) agreed last month to work with pro-reimportation lawmakers, he "has been leery of such proposals, on the ground that they could endanger patients." But with the FDA unable to produce solid evidence that reimporting drugs from other industrialized countries is dangerous, Frist appears to be using the "safety" red-herring to shill for the drug industry, which opposes the legislation because it would cut into its profits. For his trouble, the pharmaceutical industry has showered Frist with more than $120,000 in campaign contributions since 2000 . Similarly, Sen. Judd Gregg (R-NH) who controls a committee overseeing health policy, plans to introduce an alternate bill after holding hearings next month. With Gregg's campaign pocketing more than $88,000 from the industry , drug companies may seek to use that alternative to water down more legitimate efforts to lower prices. Gregg, however, does face pressure at home : New Hampshire Gov. Craig Benson , a conservative Republican like Gregg, is one of the leading proponents of reimportation.

PAWLENTY STANDS UP FOR CONSUMERS: The St. Paul Pioneer-Press reports that "Anyone doubting these are strange political times should consider: On Thursday, Gov. Tim Pawlenty - a tough-on-crime, pro-business, laissez-faire Republican who launched a Web site showing Minnesotans how to defy the federal government and import drugs from Canada - will tell a major corporation that it makes too much profit. Then, citing moral and economic grounds, he'll ask the company, pharmaceutical giant Pfizer Inc., to make less money." Pawlenty said, "It really torques me off that they are going to such lengths to try and suffocate our little modest efforts to allow reimportation from Canada ." The governor will travel to Pfizer's annual shareholder's meeting in St. Louis on Thursday to speak in support of a religious group's shareholder resolution seeking to limit drug price increases to no more than the annual rate of inflation. For his ongoing efforts, theProgress Report recognized the conservative Pawlenty in its year-end awards edition.

DRUG INDUSTRY CHIEF STILL SPREADING LIES: Nervous that seniors' refusal to continue being fleeced might mean slightly lower profits for the wealthy drug companies, top drug industry lobbyist Alan Holmer has resorted to outright distortions in a campaign of fear and dishonesty. Writing in the Boston Globe, Holmer says consumers and local governments would save as "little as 1% of their total drug costs" from reimportation. But as a study from University of Minnesota Professor Steven Shondlemeyer indicates, American consumers could save up to $38 billion if the United States purchased medicines at Canadian and European prices. The city of Springfield , Massachusetts , alone reported saving $2 million in just nine months of its pilot program to purchase lower-priced drugs from Canada . Holmer instead says the real answer is to simply take the word of the drug companies or chain drug stores: he says consumers should take advantage of drug "company-sponsored discount card programs, or even shop around at different pharmacies" even though those are offered sporadically and without guarantee. He also says seniors will be able to rely on the new Medicare drug cards, even though those also offer no guarantee of lower prices or sustained coverage .

NEW STUDY REFUTES KEY INDUSTRY CLAIM: While the drug industry always claims that lower prices brought on by reimportation will mean less profits and less research and development on new drugs, a new study proves otherwise. According to top Boston University researchers, because reimportation would allow more people to buy drugs who don't buy them now, industry profits and R& D funding could actually rise . Reimportation "raises hope that it is possible to win affordable medications for all Americans at a low added cost?—essentially the cost of manufacturing and distributing more pills?—without harming drug makers' capacity to finance research, or even their profits. It therefore appears that what is politically popular may also be in the interests of patients, payers, and drug makers themselves." (Reprinted from: Louisville/Jefferson County Democratic Party Newsletter ?–Week of April 25, 2004)