White House Promises To Allow Imports, After All
22 CommentsBy Ed Silverman // December 21st, 2009 // 7:53 am
Despite the defeat of two Senate amendments to health care reform that would have allowed imports from Canada and elsewhere, the Obama administration is pledging to make it possible anyway - but not as part of the legislation winding its way through Congress.
The issue was raised by White House advisor David Axelrod this weekend after back-room intrigue surrounding the Senate amendment suggested the Obama administration backpedaled on a campaign pledge in order to secure the support of the pharmaceutical industry for the health care bill (see here). Drugmakers agreed to $80 billion in discounts as part of the deal, but objected to imports.
“Let me be clear. The president supports…safe re-importation of drugs into this country,” he told CNN’s “State of the Union” program. “There’s no reason why Americans should pay a premium for the pharmaceuticals that people in other countries pay less for. The president is committed to moving forward once we resolve the issues that the FDA has. That’s his responsibility, to protect the American people.”
Allowing these cheaper drugs to be sold to Americans could cut revenues for the roughly $315 billion pharmaceutical industry, Reuters reminds us. PhRMA, the FDA and some senators cited safety concerns as a reason for opposing importation.
MsPiggy
“The president is committed to moving forward once we resolve the issues that the FDA has.”
I will not be holding my breath on this happening anytime in the near future. lol…..
Mike
And keep in mind - FDA law and patent law both stand as barriers to importation. The US follows a national patent exhaustion doctrine, so any unauthorized import could be construed as infringement. This is not an issue for granny crossing into Canada to get her meds, but if a company decides it wants to operate an importation business, they could be infringing.
The optics of an infringement suit, however, would be pretty bad . . .
Justice in MI
Mike–Can you clarify? Do you mean importing a drug differently branded or generic that is patent-protected in the U.S., or is there a broader issue? Thanks!
Justice in MI
p.s. Politically, I think we see the wider strategy more clearly–keep reimportation as a separate debate in hope of not “clogging” healthcare reform in its current incarnation.
I assume this will be viewed as a shell game from PhRMA’s perspective, unless there are already negotiations to head that off.
Adam J. Fein
Now that he is President, perhaps Mr. Obama better understands the risks of importation. Axelrod’s statement seems designed to provide political cover for the administration against the pro-importation supporters who don’t really understand the dangers.
I don’t agree with Mike’s comment. The bill explicitly limits manufacturer tactics to stop importation including direct distribution, dual pricing, supply quotas, or quantity allocation. The prohibited practices seem to be modeled on approaches used in the EU.
See my blog post on this topic for details and links to the actual legislation:
http://www.drugchannels.net/2009/12/importation-review-your-agreements.html
Adam
Ronald Klein, RPH
Drug importation from foreign countries is very shortsighted when it comes to National Security. What happens when the friendly country that is selling us drugs becomes unfriendly? Once the pharmaceutical industry in this country is destroyed, the factory cannot just be turned on when there is a shortage.
A foreign country that becomes unfriedly could litterally hold us hostage for necessary medicines, including such staples as antibiotics and cardiovasculars.
The USA has the best quality drugs in the world and our politicians are working to destroy it.
Eric
> RK-What happens when the friendly country that is selling us drugs becomes unfriendly?
What is the probability that Canada, Great Britain, or Japan will become unfriendly to the US?
Also, as someone with an RPH is very likely aware, the vast majority of pharmaceutical manufacturing is located outside the US (Puerto Rico being a notable exception). Ireland is a major manufacturer for many pharmaceuticals.
For the record, I have worked for both Wyeth and Pfizer. Although I still hold stock/options in these companies, I try to speak about them as objectively as possible.
I am curious if you receive any money or other tangible financial support either directly from pharmaceutical companies or organizations that lobby on their behalf.
anonymous
The US holds the best quality drugs in the world? What planet are you from? Seriously?? Drugs are globally made and globally supplied. Very few drugs sold in the US are manufactured here. The factories in the US are already gone.. go visit New Jersey, Indiana, Connecticut.. Please tell me one drug from start to finish made in the US?
I’m not saying it isn’t a public health concern. As witnessed by our recent vaccine shortage and the US paying for vaccine manufacturing plants for NOvartis and Sanofi-Aventis (NOTE: NOT US COMPANIES) in North Carolina.
I am saying that horse left the barn decades ago and the public let Wall Street and the drug manufacturers do it.
Anne PME
The US is already being ‘held hostage’ by BRIC countries.
China produces much of the world’s penicillin API. Without the API, you cannot produce finished doses of penicillin. FDA has two inspectors in China to cover these and all other FDA overseen products. If you look at the rate of quality issues and counterfeiting in China, it is higher than in other countries.
India has the rights to and/or produces API for many cephlosporins and cardiovasculars. FDA opened an office in Mumbai last year right around the time of the Mumbai attack.
Although the FDA has changed the procedures surrounding co. response to FDA Warning Letters, I have not seen many FDA Warning Letters to pharmaceutical companies not involved with bogus H1N1 claims for the last several months.
David Axelrod has spent his career as a political consultant. Dr. Margret Hamburg is a medical doctor and leading expert in bioweapons, She is more likely to know what she is talking about than a career political consultant like David Axelrod whose job entails making political deals and scoring votes.
Rio Hawk
Am I the only person in the world that understands the true problem with re-importation? The US(and other) pharma companies price drugs for other countries based on poverty levels and national laws governing pricing. When prices are set, the losses to third world counties and those with national pricing restrictions are recouped by increasing prices to elsewhere–primarily to US consumers. IF re-importation from those countries is allowed, the entire pricing structure will have to be revamped. The losers will be the developing countries. The concept of the US taking care of the world will collapse and prices to damn near everybody will rise–with the possible exception of the US which could benefit from the price equalization. Why does our president not seem to understand this?
free market system
there is a reason americans should pay more than some other countries. it’s the same reason americans pay more for some other items than in other countries. are we going to price fix everything for our manufacturers to the lowest price in the world?
the reason you don’t fix prices is that this is the greatest country in the world and it got that way with a free market system.
why should drugs be treated differently than anything else?
this is great way to stop almost, not all, but almost all innovation in the industry. and the hilarious thing that these idiots don’t get, is that innovation in the drug industry is one of the BEST ways to reduce overall healthcare spending. Reduce incentives to make new drugs means losing out on opportunities to reduce healthcare costs. people complain about $25 copay but it actually saves thousands of dollars in some cases. Drugs aren’t the problem. they are part of the answer. they should be supported not denounced. but because lawmakers want re-elected more than they want to do the right thing, they cater to old, insane people who tend to vote.
Betsy
Anonymous says, “Very few drugs sold in the US are manufactured here.” RIGHT! I repeat, then, what I said earlier this week. Big Pharma outsources the manufacturing of many of its products in order to save money, and it says that we shouldn’t re-import those drugs. OF COURSE NOT. If we re-import them, then we pay less for them, and Big Pharma outsourced them to save money to begin with, so they SURELY DON’T WANT US TO PAY LESS FOR THESE DRUGS BY BUYING THEM FROM THEIR OUTSOURCED SOURCES, RIGHT?
JaT
Fear not, pharma. This will likely go back to business-as-usual as soon as the votes are secured for the final health care reform draft. Some were very POed when the bipartisan Dorgan amendment went down. Something had to be done.
Ben Nelson got his medicaid bill paid by fed indefinitely.
Mary Landrieu got 300mil for LA.
Vermont’s Sanders won 10-14billion???
Massachusetts got additional money.
Joe Lieberman got rid of government run insurance (do we even know what the benefit will be anymore?).
Florida got protection for medicare advantage,
as did Pennsylvania,
as did New York.
A few states got higher reimbursement rates for doctors.
I predict that the states that didn’t get special consideration are going to have an itty bitty problem with it all.
You know, the working people that get to foot the bill for working people in other states. It isn’t exactly redistribution of wealth.
The whole thing is a sham. Of course, pharma, you contributed to the sham. You’ll be safe.
Doc
We will see how smart phrma is, they gave alot of money to push through O’s plan. Now he can argue that with 30 million more elidgible, phrma can afford to allow imports.
He is dedicated to imports, just a matter of time.
Adam J. Fein
The issue has nothing at all to do with the location of the manufacturing facility. The problems start because independent wholesalers and pharmacies can buy, repackage, and resell the products.
This trading activity a.k.a. “parallel trade,” creates openings for counterfeits/mishandled products to enter the supply chain. It also can create shortages if your country happens to be “low cost” based on current exchange rates.
A recent news story: “Europe Awash in Counterfeit Drugs”
http://www.businessweek.com/globalbiz/content/dec2009/gb2009128_347306.htm
Adam
diane dalton
And with this so goes more jobs down the drain. The pharmaceutical
industry has trimmed over 100,000 jobs this year because of this. It
costs more in the long run to pay everyones unemployment benefits,
its killing our economy and continues to decline real estate values when
so many middle class americans continue to loose jobs. The savings
on these drugs reimported will not offset the deepening job cuts!!!
Kurt
The drug industry screwed itself when it gave price concessions to foreign countries. Now they are paying the price.
Anne PME
Following up on what I think Adam Fein is trying to say, reimportation further convolutes the supply chain and will likely lead to even higher rates of drug diversion, adulteration and counterfeiting.
Pharmaceutical companies likely outsource not only to cut costs, but b/c they have to have an increased presence in emerging markets and decreased exposure to the declining US market.
While I am not an attorney, Adam Fein’s post and other information appears to indicate that reimported medicines like these may be viewed by oversight and enforcement officials as diverted drugs. Diverted drugs are not legal dispenses under any state or federal regulations that I am aware of. Note that prescription medicines obtained for personal use under FDA compassionate or personal use may be legally reimported into the US.
Drugs are PERISHABLE…they DO NOT IMPROVE with age, increased exposure to tampering, or increased exposure to adulterating elements like heat, freezing temperatures, humidity or other types of mishandling. Increasing exposure to these adulterating elements will likely result in greater numbers of life saving medicine to becoming ineffective or potentially toxic – for example tetracycline ABX may become nephrotoxic when adulterated.
Increasing the time that a prescription drug spends in shipping channels increases not only risk of spoilage; it also increases things like liability costs, accounting costs and booking and reporting costs.
I fail to see how the US can decrease the price of drugs and cost of health care by increasing the risk and cost of getting FDA approved prescription drugs to my pharmacy.
We have very real problems in this country with drug pricing and access that congress and the white house need to admit to and take steps to successfully resolve. Instead, it appears as though we – all of us here in the US- are trying to pass them off by outsourcing them.
vince
Predicted date of FDA being able to assure drug safety on imports or even non-imports. Shortly after the first snowball fight in hell.
Mike
Here’s the deal with patent infringement after importation:
35 USC 271(a) - “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”
TRIPS Article 27 (in part) - “Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.”
TRIPS doesn’t speak to whether a country must adopt a national, regional, or global patent exhaustion doctrine (the doctrine saying that once a product is sold, patent rights on that product are exhausted - i.e. the patent owner can’t sue for infringement when a re-seller sells a product without authorization). The US (unlike Europe) follows a NATIONAL patent exhaustion doctrine. A product sold in Canada hasn’t exhausted patent rights in the US.
So - if a bill would exclude drugs from national patent exhaustion, that bill would be in violation of TRIPS. It would discriminate against pharmaceutical patents.
Of course, this wouldn’t be the first time the US violated TRIPS . . . but still.
Barb
Well, you can’t trust Obama, can you? First he cuts a deal with big pharma, and then he goes back on his word with pharma. . he is making an enemy out of everyone. . . Like Joe Wilson said: You Lie!!!
Barb
The drug industry was mandated by socialist medicine to give those prices! Good grief, does no one see that the pharma industry is going down the tubes, and patients will ultimately suffer with no new products! Do you really want your product coming from who knows where???? Why do you think that the gov’t is seizing all sorts of medicine coming into our country? — they are counterfeit, or don’t have active ingredient in it? You are willing to take a chance with your health and not know what in the world you are getting??