Lower Drug Prices

If federal lawmakers needed further evidence that they did only part of the job in providing a Medicare drug benefit, they got is last week. First, a national survey released Tuesday found that nearly half of seniors polled had a negative view of the law and more than half said the drug cards that became effective this summer “are not worth the trouble.” The same day, the state of Vermont took the unprecedented step of saying it intends to sue the Food and Drug Administration for denying its request to import cheaper drugs from Canada for its state workers and, ultimately, its citizens.

The answer to both is simple – allow drug importation. But, that is only an interim measure. It makes no sense to sell drugs made by U.S. companies to Canada for a lower price (because their government negotiated a lower price) and then to import those drugs into the United States. It makes much more sense for the U.S. government to negotiate a lower price in the first place. That is what all other developed countries do and what the Department of Health and Human Services recently announced it would do for cancer drugs for Medicare patients. Instead of following this logical route, the Medicare reform bill passed last year barred the federal government from negotiating drug prices.

Because time is short in this session of Congress to undertake such a change, allowing drug imports is a good first step. With a growing number of states and cities suggesting they will buy drugs from Canada, legalizing this practice makes sense. Vermont officials said they expected to save about 5 percent of the $18 million the state now spends on prescriptions for state employees. Illinois, too, has been denied FDA approval to import Canadian drugs for its employees. Gov. Rod Blagojevich estimated his state could save $91 million by buying drugs across the border, although his state does not plan to proceed without federal approval. New Hampshire plans to import Canadian drugs for retired state employees, prison inmates and Medicaid recipients, but the program has not begun.

Despite the movement to import drugs, the FDA maintains that the safety of imported drugs cannot be insured. Unless the media has completely missed a rash of deaths for bad prescription drugs in Canada, this argument is a non-starter.

Among the 47 percent of seniors who had an unfavorable impression of the law in the Kaiser Family Foundation and Harvard School of Public Health survey, the most frequently cited reason is that it does not provide enough help with drug costs. The second most cited reason is that the law is too complicated. Thirdly, seniors said the law will benefit private health plans and pharmaceutical more than the people on Medicare.

Two bills currently in Congress would allow drug importation. A bill that combines the best of both measures should be passed.