Cheaper Drugs, Inevitably

The concession this week by Health and Human Services Secretary Tommy Thompson that legalizing drug imports appeared inevitable should have emboldened 18 state attorneys general to ask for permission for their states to import drugs from more than just Canada. The prescription drug market is a worldwide phenomenon. Any country that can demonstrate adequate safety oversight for their pharmaceutical industry will attract U.S. business inevitably, as the secretary observed.

Not that there’s anything wrong with the AGs’ request for formal approval for states to import drugs the same way individuals have been importing them for several years. Maine Attorney General Steven Rowe is among the group that wants the secretary to “act immediately to help our citizens with affordable prescription drugs while ensuring drug safety.” The secretary needn’t limit himself to Canada to accomplish this – a changing world market with prices much lower than those found here becomes ever more tempting as U.S. prices rise. Thomas Ryan, the chief executive of CVS Pharmacy, made headlines this week when he became the first pharmaceutical industry executive to support drug importation.

“Millions of Americans already have opted to import drugs because they can’t afford not to,” he said. “We owe it to them to face this issue head on and not look the other way.”

Through a combination of higher prices, new, more expensive drugs replacing older ones and increased use, the prescription-drug costs have risen 10 percent a year since 1995, building pressure on consumers to find less expensive alternatives. Federal officials project that seniors without drug coverage will spend an average of $1,400 each for medications this year. At the same time, the Internet and northern states’ experience with Canadian drug prices have shown U.S. consumers that these alternatives exist and can be safe. The debate over a Medicare drug benefit and the subsequent passage of a major bill that precluded price negotiation may have signaled to consumers that they would not be getting help from Congress unless they demanded it.

Congress is beginning to listen. Sen. Olympia Snowe, to her credit a longtime champion of lower drug prices, has two bills currently that try to lower prices. One, a popular measure with a wide range of co-signers (both Sens. Ted Kennedy and Trent Lott are co-sponsors), would expand the rules for importing lower-cost drugs and establishes a procedure for ensuring their safety. It is a needed bill, but should be a temporary one.

A second bill, which she is co-sponsoring with Sen. Ron Wyden, is less popular but provides a better long-term answer. The Medicare Enhancements for Needed Drugs Act also makes drug importation easier, but it also repeals the Medicare prohibition on price negotiations. This is a major step because it recognizes, as most countries have, that affordable prescription drugs are an essential part of medical care. It reduces the issue of drug importation because it reduces the disparity between prices here and abroad. Rep. Tom Allen has been trying for years to persuade the House to support similar legislation.

This change is as inevitable as the imports Secretary Thompson concedes. The question is whether Congress is going to lead or follow the public on it.