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Debunking the Myths of Drug Importation
Debunking the Myths of Drug Importation
Washington lawmakers in both the House and Senate have introduced measures to allow Americans to import prescription drugs from other countries.
Pundits and politicians on both sides of the aisle continue to debate the measures. Opponents warn of the dangers of drug importation, while advocates promise lower drug prices. With these competing assertions, it's time to distinguish the myths from the facts:
MYTH NO. 1: Drugs imported from Canada and Europe are just as safe as those purchased in the United States.
Although consumers may think that imported drugs come from Canada, Britain, or other Western European nations, it's impossible to definitively verify an imported drug's country of origin.
In the European Union, products pass freely from one member nation to another - through a system called "parallel trade."
Further, each time a drug passes from one country to the next, it can be opened, possibly inspected, and then re-packaged - leading to mistakes, possible contamination, and even substitution of counterfeit drugs.
MYTH NO. 2: If a drug is imported from Canada or Europe, it won't be a counterfeit.
Because drugs are constantly opened and re-packaged in the European parallel trade system, significant opportunities exist for counterfeiters to introduce their fake products into the legitimate supply chain. And because counterfeiting already is a widespread problem, it makes little sense to open new opportunities for these drugs to enter the supply chain.
The World Health Organization currently estimates that 10 percent of the global drug supply is counterfeit. According to the Food and Drug Administration, that number can be as high as 50 percent in some countries. And by 2010, trade in counterfeit drugs is expected to reach $75 billion - more than one-quarter of the amount that the U.S. spent on prescription drugs last year. Counterfeiting clearly is a concern for American consumers, and allowing imported drugs into the United States will only exacerbate the problem.
MYTH NO. 3: Importation will make prescription drugs cheaper.
Despite the assertions of many politicians, there is no evidence that importation will save American consumers any money. The nonpartisan Congressional Budget Office has estimated that drug importation will lead to savings of one percent over ten years on drug spending at best. In fact, a recent London School of Economics study showed that foreign resellers would reap most of the benefits from importation, not American consumers. In other words, the theoretically lower drug prices would be cancelled out by the middle-man's markup.
MYTH NO. 4: Foreign drugs are cheaper than American drugs.
Consumers in foreign countries do pay less for some brand-name drugs, but that's because their governments have instituted price controls on medicines.
Price controls may sound like a good idea, but they always come with serious unintended consequences, including restricted supplies, rationing, and inhibiting research on new medicines. In most countries with price controls, new drugs generally aren't available until they've been on the market for several years. And even then, the drugs may be rationed, forcing patients to wait for the drugs they need - and patients are sometimes denied the new treatments entirely. Price controls are not the answer - either imposing them directly in the U.S. or importing them from abroad.
U.S. consumers have many in America than anywhere else in the world, and generics account for more than 53 percent of prescriptions filled in the United States.
Further, the new Medicare prescription drug benefit is saving seniors an average of $1,200 a year on medicines. And virtually all of the pharmaceutical companies have programs to help consumers with low and moderate incomes to obtain their drugs at little or no costs. American consumers have no need to risk taking imported drugs that could be contaminated, counterfeit, or unsafe.
MYTH NO. 5: Importation of prescription drugs is simply a free-trade issue. How can a person support free trade and oppose the free flow of drug products across borders?
For a free market to work, businesses must have the right to negotiate the sale of their products.
The proposed importation legislation, however, includes a "forced sale" provision that would require American pharmaceutical companies to sell nearly unlimited quantities of their products to foreign distributors at prices mandated by foreign governments.
In effect, forced sale just gives a windfall to foreign resellers while penalizing American drug companies and their shareholders. And it would dry up research on tomorrow's drugs. Such a system is a far cry from free trade.
FACT: Importation will do little more than import foreign price controls while exposing American consumers to unnecessary and dangerous risks.
Grace-Marie Turner is president of the Galen Institute, a non-profit research organization in Alexandria, VA, that focuses on free-market ideas for health reform. She can be reached at firstname.lastname@example.org
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