Although HHS Secretary Tommy Thompson was wise to withdraw his appointment of the top critic of reimporting Canadian drugs to lead a study of the practice, the real story is that the panel is focusing on the wrong issue. Instead, Congress should establish a task force to come up with a rational solution to high U.S. drug prices.
The Canadian drug import issue is political dynamite, as Thompson found out when he briefly named Food and Drug Administration Commissioner Mark McClellan to lead the new commission, only to drop that plan under bipartisan pressure from Congress. Thompson also backpedaled on his tough stance against reimportation, saying he might support it with strict controls, including vigorous inspections.
The moves removed a roadblock to McClellan's nomination as CMS administrator, though he too faced more scrutiny of his role as the leading critic of drug imports as a threat to patient safety. To date, McClellan hasn't come up with any examples of patients being harmed by the practice, but he is right in asserting that it violates current laws.
This stand, however, only underscores that this administration has done everything asked of it by the pharmaceutical industry, Washington's best-funded lobby. Not only did it ensure that no drug price controls were included in the Medicare reform bill last year, it also has been foot-dragging on a waiver request by Michigan and Vermont to pool their Medicaid drug programs to negotiate lower prices.
For consumers, it makes sense in this climate to bend the rules to get the best deal. They have found Canadian prices 30% to 80% lower for brand-name drugs. Now cities and states are jumping into the game, using their Web sites to steer consumers to approved online Canadian pharmacies. The city of Springfield, Mass., has saved millions having its employees buy their drugs through its importing program.
The pharmaceutical industry is pushing back in a big way. Half a dozen drug companies have threatened to cut off the supply lines to Canadian pharmacies that resell to U.S. patients.
Now many in Congress from both parties want to make this whole crazy thing legal, which opens up the prospect of a majority of pharmaceutical sales going from U.S. manufacturers to Canada and back again.
Canadian drug reimportation may make sense in the short term but it is a last resort, not sane public policy. What the sponsors are saying is that they won't stand up to pharmaceutical companies here but with a wink and a nod will allow reimportation from there.
What would be wrong with that? One issue is that U.S. drug prices underwrite lower costs elsewhere in the world, where governments have been able to keep prices low enough so their citizens can afford life-saving medicines.
The higher prices we pay also cover the costs of research and development of new life-saving drugs, which can run to hundreds of millions of dollars per drug, studies have shown. At least that is the persuasive argument the drug industry has been making all these years. What is much less clear is exactly what relationship there is between our prices and the real costs of R&D. Just as there are studies of the true cost of new drugs, there are reports of drug industry price gouging and its machinations to keep drugs from going generic.
What is needed is a true test of the pricing argument, through a commission hearing testimony from the drug companies, independent scientists, medical policy experts and consumer groups.
The drug companies have a vested interest in supporting such a process. Otherwise, Canada may become their best customer.
What do you think?
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