Profits - Sole Reason For Blocking Importation Of Cheap Drugs
By Evelyn Pringle - Miamisburg OH USA
Dr Peter Rost has spent 20 years marketing pharmaceuticals. On Feb 16, 2005, he testified before a senate committee on
health, education, labor and pensions, in support of the reimportation of cheaper drugs from other countries.
Currently, Rost is a Vice President with the pharmaceutical giant, Pfizer. He explained to the committee that the views
expressed were his own and did not reflect those of Pfizer.
At one point during his career, Rost was responsible for an entire region in Europe where he gained personal experience
with reimportation. He observed first-hand how the free market works and thinks the industry is making a huge mistake in
opposing drug importation.
In fact, Rost told the committee that there came a time, where he had lots of reimported drugs coming into his market in
Europe, and admitted, "I was not happy about this." However, in order to compete, Rost dropped his own prices, and by
doing so, he said, "I doubled sales and increased my company ranking from No. 19 to No. 7 in less than two years."
There is simply no reason to believe that a free market would not work just as well in the US. The only conceivable
downside is that it might mean a reduction in profits for the pharmaceutical industry. But when it comes to saving
lives, why shouldn't the industry that is the most profitable in the nation be expected to get along with a little less
profits?
Bogus Excuses Over Safety
The biggest argument put forth by Bush and the industry against importation is safety. But in reality, the safety
concern is patently bogus, mainly because the imported drugs are nearly all from the same manufacturers who already
provide drugs to US suppliers.
According to Rost, half of the large drug companies, including Roche, Glaxo, Novartis, Astra-Zeneca, and Sanofi-Aventis,
are currently foreign corporations anyways. He maintains that our government allows these foreign drug makers to charge
more in this country than their own governments allow them to charge, and this is the reason why they fight against
reimportation.
"So what do these foreign companies do?" he said, "They take out big ads in American newspapers, and tell us that
reimportation is not safe," he told the committee, "while they know full well that it’s been done safely and
cost-effectively in their own home markets, in Europe, for over twenty years."
While testifying, Rost responded to an absurd comment about safety made by FDA Commissioner, Lester Crawford, who said
that his main concern about drug reimportation was that al Qaeda might attack the Canadian drug supply.
This fear is totally irrational because according to Rost, "we have thousands of secondary wholesalers that trade drugs.
States license them, not the FDA," he said. Therefore, he explained, "All it takes for a terrorist to become a drug
wholesaler is a $1,000 and a driver's license, according to Aaron Graham, head of security for Purdue Pharma, quoted in
the Providence Journal."
Rost believes drugs coming from other countries may actually be safer than those made in the US. A problem in this
country, Rost advised, "is that our drugs are shipped in big vats to wholesalers, and then poured into smaller,
bulk-size containers, from which tablets are dispensed manually to the patient," which means there are lots of entry
points for a terrorist. In Europe, Rost explained, "drugs are sold in tamper-proof individual bottles or blisters, and
no one touches a drug after it leaves the manufacturer."
He told the committee, "The German Federal Health Ministry has verified that not one single confirmed case of a
counterfeit medicine has ever come through the parallel trade chain," and that "The UK regulatory authority has
described the level of pharmaceutical counterfeiting as “virtually undetectable,” according to European Association of
Euro-Pharmaceutical Companies." he said.
Rost believes reimportation is about a safe drug supply and getting drugs to consumers who can’t afford them. The
"biggest problem we have today is that drugs don’t work if you don’t take them," he warned.
False Assertion - Importation Won't Save Money
During his testimony, Rost told the committee about a 2001 study conducted by the Kaiser Family Foundation that
determined that 15% of uninsured children and 28% of uninsured adults had gone without prescription medication because
of cost, and cited the journal, Diabetes Care in February, 2004, that reported on a study of older adults with diabetes
that found 28% went without food to pay for their medication.
Rost discussed the recently released HHS report that claimed that savings from reimportation would ultimately only
represent a 1% to 2% savings on drug costs, and explained "that if this was true, reimportation of drugs would never
have existed in Europe with much smaller price differentials than the US, and it would never take off in the US," he
said.
Rost also pointed out that if this were true, the industry would not be working so hard to block it. "Why, then, do you
think, the drug industry spends so much time and money fighting reimportation?" he asked, "The answer is that the data
in the HHS report don't support this conclusion," he advised.
Rost thought it important to explain to the committee that this false conclusion was based on a London School of
Economics study that was sponsored by the drug industry.
While testifying, Rost referred to Table 7.2 in the HHS report that showed US drug prices to be 100% higher than in
Europe, and said, "So the premise of less than 20% savings assumes price gouging by importers and a complete lack of
competition," and added, "Of course, we in the industry know that is not how the free market works."
Bush Put Profits Over Lives
According to Rost, we have 67 million Americans without insurance for prescription drugs in the US. "Many of them don’t
get the drugs they need because they can’t afford them, because drugs cost twice as much in the US as in other
countries," he said.
Drug prices in Canada are significantly lower than in America because, unlike the US, the Canadian government negotiates
for cheaper prices directly with drug companies.
With the exception of a few agencies, Bush won't allow the government to negotiate here, which leads to unequal and
unfair drug costs for ordinary citizens. For instance, Rost told the senate committee that in the US, drug companies
charge high prices to the uninsured, but through rebates, sell the rest of the drugs at the same low prices charged in
other countries. "These are given to those with enough power to negotiate drug prices," Rost claims, "such as the
Department of Veterans Affairs and various pharmacy benefit mangers."
Technically, it is illegal to import prescription drugs into the US from other countries, but the government has never
before enforced the regulation when the drugs were imported specifically for individual use. However, Bush is banding
together with the major drug companies to do it now.
In fact, many believe that Bush is behind the threat by Canada to ban importation to the US. "Canadian Health Minister
Ujjal Dosanjh could issue new rules that would virtually halt drug exports. He would do so by forbidding doctors there
from signing off on US prescriptions unless they actually examined the patients first," according to the Feb 19, 2005,
South Florida Sun-Sentinel.
"He said in a speech that Canada could just not be the drugstore for the United States," said Dosanjh's spokeswoman,
Adele Blanchard," the Sun reports. "The minister said it could lead to shortages [for Canadians]. He also said it is
unethical for Canadian doctors to just countersign prescriptions from an American doctor," according to the Sun.
Canadian pharmacies now supply drugs to about 1.8 million Americans, mostly uninsured elderly or low-income people,
according to David MacKay, executive director of the Canadian International Pharmacy Association, when he testified
before the Canadian Parliament.
However, besides worries over the threats by the Health Minister, Canadian pharmacies are being pressured to stop
importing drugs to Americans, by drugmakers who sent out letters warning of plans to stop the shipment of products to
wholesalers who sell to the pharmacies, according to MacKay.
The Sun reports that drug companies who sent out letters, include Pfizer, Merck, GlaxoSmithKline, and Eli Lilly. As a
result, some common drugs such as the cholesterol drug, Lipitor, are not always available for American buyers, MacKay
reports.
Several South Floridians who buy drugs from Canada, according to the Sun, "said they resent Bush and the drug industry
for allowing drug prices to remain high in this country while trying to keep out cheaper drugs from the north."
Abraham Kaplan, who is a Canadian drug consumer, told the Sun, "I don't think the U.S. should be in the position of
protecting the obscene profits of these big manufacturers."
While it remains to be seen what will happen with Bush in the US, should the Canadian Health Minister, Dosanjh, act to
ban or limit US sales, MacKay told the Sun-Sentinel that his organization, and the province of Manitoba, would likely
fight him in court.
Just in case the plot to block supplies is successful, some Canadian suppliers have already arranged to keep selling to
the US, with the overseas drugs, said Steve Fishman, manager of Prescriptions Direct in Hallandale, according to the
Sun. "Eighty percent of Canada will get shut down if the minister goes forward. The other 20 percent will find
alternative sources to do the same thing that their pharmacies do now," Fishman said.
Rost maintains that "the fight against reimportation is a fight to continue to charge our uninsured, our elderly, our
poor, our weakest, full price, while giving everyone else a rebate," which he says, "is fundamentally unethical."
Rost advised the committee that every day, "Americans die because they can’t afford life-saving drugs, because we want
to protect the profits of foreign corporations. I believe we have to speak out for the people who can’t afford drugs, in
favor of free trade and against a closed market," he said. Blocking reimportation has a high cost, Rost warned, "Not
just in money, but in American lives."