The Maryland Public Policy Institute
Baltimore Mayor Martin O’Malley announced recently in his gubernatorial campaign that he will consider buying prescription drugs from Canada and abroad as a way to reduce health care costs for Marylanders. But that policy can potentially harm both consumers and the economics of drug creation and sale in the United States.
Those unsolicited and poorly worded offers for Cialis and Viagra in our e-mail inboxes say it all.
Drug re-importation is one situation where the invisible hand will not solve the problem. The key prefix is the “re-” in reimportation. The United States develops, creates and produces the bulk of the world’s drugs. Foreign governments legally purchase drugs from American companies at discount prices and then set their own prices at home (translation: price controls). Were Maryland to allow drug re-importation, American firms would continue to assume the worldwide burden of drug research and development but at a profit margin that did not take those efforts into account.
And how does Mayor O’Malley plan to ensure that drugs coming in are safe? This policy move cannot just be made in isolation. Federal approval is required. Further, when American-produced prescription drugs make their way back into this country, they will have passed through multiple hands, increasing the risk of tampering and counterfeiting.
To guarantee drug safety, the Food and Drug Administration would have to investigate (and test) drugs for tampering and counterfeiting, which would create a heavier government and taxpayer burden and ultimately a less favorable environment for the creation of effective medicines. The FDA does not regulate drugs obtained in foreign markets, and describes the medical and economic drawbacks of using these drugs on its Web site.
Randall W. Lutter, Ph.D., FDA’s associate commissioner for policy and planning told this to would-be re-importer Steven M. Saxe, director of the Washington State Board of Pharmacy: “FDA is very concerned about the safety risks associated with the importation of prescription drugs from foreign countries. In our experience, many drugs obtained from foreign sources that are represented as U.S.-approved prescription drugs are of unknown origin and quality.”
By law, if a prescription drug is originally manufactured in this country and exported, only the United States manufacturer may import the drug back into the United States.
In order for O’Malley to push through what he proposes, he would need to obtain a waiver from the FDA, which is unlikely due to the agency’s consistent refusal to approve such applications elsewhere in the United States.
The FDA is aware of patients’ concerns about access to effective, low-cost medication. Lutter said the FDA is working to change “our regulations to reduce litigation that unnecessarily delays access to more affordable generic drugs, and doubling the annual number of generic drug approvals over the last five years.” As an alternative, in the meantime, numerous direct patient assistance programs exist to help mitigate costs for consumers, such as those administered by Lilly, Pfizer and the Partnership for Prescription Assistance in Maryland.
Living in America is a trade-off where the prescription drug market is concerned and not necessarily a good one. We have a broad range of effective, cutting-edge choices, but many essential medications are pricey because we shoulder the majority of research and development worldwide. As a result, right or wrong, we aren’t just paying for the pill itself; we also pay for its years of testing and research and for pills that never reach the market.
But buying medicine from abroad is not the answer. The regulatory machinery that would be required to ensure the safety of imported medicine would be expensive, lengthy to create and erase any potential price benefits. The problem of high drug prices can only begin to be solved when other countries start to devote more funds to research and development and pharmaceutical companies here price brand-name prescriptions more consistently.
Alison Lake is managing editor at The Maryland Public Policy Institute and can be reached at firstname.lastname@example.org.