Bill allowing drug imports would cut cost

WASHINGTON – The prices Americans pay for prescription drugs would fall – though not to the levels of Canada or Europe – if the government let consumers buy medications abroad, lawmakers were told Wednesday.

For a decade, a bipartisan cadre of lawmakers has tried to give U.S. consumers legal access to drugs imported from Canada, Australia, New Zealand, Japan and countries in Europe. They say foreign prices can be half or a quarter what Americans pay for the same drugs.

But permitting those drugs to be imported would cut U.S. prices by only 12 to 20 percent, Stephen Schondelmeyer, a University of Minnesota pharmaceutical economist, told a Senate subcommittee Wednesday.

Schondelmeyer said imported drugs would slow the rate of growth in U.S. drug prices, currently the highest in the world. The United States accounts for $200 billion a year in prescription drug sales, or just over half the world total.

With Congress now in Democratic control, lawmakers backing identical drug importation legislation in both the Senate and House hope it will fare better than it has in the past.

The bill would give the Food and Drug Administration the authority and money to register drug exporters and importers and vouch for the drugs they handle through inspections and other measures, lawmakers said.

Still, it faces stiff opposition, including from the pharmaceutical industry and the FDA. Representatives of both warned Wednesday the legislation could expose consumers to a deluge of fake or otherwise dangerous drugs from abroad.

“One day we will rue the day we opened up that flood. One day, the deaths will pile up like they’ve piled up elsewhere,” said former Rep. Billy Tauzin, R-La., president and chief executive of the industry group Pharmaceutical Research and Manufacturers of America. At one point during the hearing, Tauzin cited “Borat’s Kazakhstan” – the character is fictional, but the country’s not – as a place rife with counterfeit drugs.

Randall Lutter, the FDA’s acting deputy commissioner for policy, trotted out multiple examples of the dangers of imported drugs, including the recent case of some U.S. consumers who thought they were buying sleep aids, antidepressants and other drugs over the Internet but instead were shipped a powerful anti-psychotic.

“FDA remains deeply concerned about unapproved, imported pharmaceuticals whose safety and effectiveness cannot be assured because they originate outside the closed legal structure and regulatory system we are fortunate to have in the United States,” Lutter told senators.

Sens. Byron Dorgan, D-N.D., South Carolina Republican Sen. Jim DeMint and others expressed disappointment in Lutter’s testimony after the FDA official told the committee he’d only been briefed on the legislation but had not read it.

“I really don’t understand why we’re hearing today, you know, bureaucratic intransigence on coming up with a way to make it happen,” Sen. Olympia Snowe, R-Maine, said during the hearing of the Senate Commerce Committee’s subcommittee on trade. “Where is the can-do spirit instead of the can’t-do?”

John Vernon of the University of Connecticut’s school of business and a part-time FDA adviser, warned the subcommittee that the effect of allowing cheaper, imported drugs on the market could be harmful in the long run. That’s because lower prices could reduce the incentive for pharmaceutical companies to invest in the research and development that leads to new drugs, Vernon said.