Support grows on Hill to allow drug imports

Efforts to legalize the importation of prescription drugs are gaining traction on Capitol Hill, despite opposition from the Bush administration, as lawmakers look to woo seniors worried about the soaring cost of medications.

The Republican chairman of a key Senate committee introduced a measure yesterday that would allow individuals and pharmacies to import FDA-approved drugs from Canada and as many as 15 European Union countries.


Sen. Judd Gregg of New Hampshire, chairman of the Senate Health, Education, Labor and Pensions panel, is the third Senate GOP committee chairman to sign onto legislation that would open the U.S. border to drugs from countries that control the price of medication.

Finance Chairman Charles E. Grassley of Iowa and Commerce Chairman John McCain of Arizona are sponsoring similar drug-importation bills. McCain is part of a bipartisan group of sponsors, who include Senate Democratic leader Tom Daschle of South Dakota and former Senate Republican leader Trent Lott of Mississippi, whose legislation would allow drug imports from 25 industrialized nations, provided manufacturers in those countries are approved by the Food and Drug Administration and use counterfeit-resistant packaging.


Drug importation is widely seen as a politically potent issue among seniors, who take the most prescription medications and bear the brunt of rocketing drug costs in the United States. Because of price controls, prescription drugs in Canada can cost half as much as they do at U.S. pharmacies.

Studies released last week by two nonpartisan consumer groups showed U.S. prices for prescription drugs far outpacing the rate of general inflation.

AARP, the nation's largest advocacy group for older Americans, showed prices for medications most commonly prescribed for seniors have risen 27.6 percent in the past four years, almost triple the inflation rate. A report by the health-care advocacy group Families USA reached similar conclusions.

Consumer advocates and others who back legalized drug importation are expressing hope that election-year pressure might convince lawmakers to pass a bill this year.

"We've got a groundswell of support around the country now," said Kirsten Sloan, AARP's national coordinator for health issues. "There's pressure building from constituents back home for action on this issue this year."

The House of Representatives has passed drug importation bills twice previously, only to have the proposal die in the Senate. Before Congress left for its Memorial Day recess last month, 228 House members, including 78 Republicans, asked Senate Majority Leader Bill Frist to bring the importation measure up for a Senate floor vote by July 4. The Tennessee Republican had promised previously that he would allow a vote on drug importation sometime this year as part of a deal for Senate confirmation of Mark McClellan to head the Centers for Medicare and Medicaid Services. For his part, Gregg said his health committee would vote on his importation bill by the end of July.

To be sure, no one expects a smooth ride into law for an importation measure, given the continued strong opposition from the White House and the powerful pharmaceutical manufacturers' lobby.

"I wouldn't bet my house on it," said Ron Pollack, executive director of Families USA.


Pollack predicted that House Speaker Dennis J. Hastert of Illinois and House Majority Leader Tom DeLay of Texas would block attempts to bring a bill to a vote in the House. "I think this is a very steep, uphill climb," Pollack said.

The House passed a bill legalizing importation of drugs from Canada by a 243-186 margin last July. The House GOP leadership agreed then to allow a vote in an effort to win the support of Rep. Jo Ann Emerson, a Missouri Republican, for the broader Medicare reform bill. The importation measure that cleared the House was identical to that sponsored in the Senate this year by the bipartisan group that includes McCain, Daschle and Lott.

Veto threatened

President Bush has threatened to veto any proposed changes to the Medicare Modernization Act, which he signed into law last year. The law added a prescription drug benefit to the primary health care insurance program for seniors starting in 2006 and authorized a Medicare-sponsored discount card program that began June 1. But the law also bars drug importation without the approval of Health and Human Services Secretary Tommy G. Thompson.

Drugmakers and the Bush administration maintain that importing drugs would have a minimal impact on domestic pharmaceutical prices while opening the borders to potentially dangerous counterfeit drugs.

Moreover, they argue, importing drugs from countries that control prices would undermine the free market American economy that picks up the tab for $32 billion a year in pharmaceutical research and development.


A task force appointed by Thompson is studying whether importation could be conducted safely and assessing its possible impact on medical costs and Americans' health.

The panel is expected to release its report this summer.

While the drug importation issue has been bouncing around Capitol Hill for the past two years, some states have moved forward on their importation programs in hopes of cutting spending on drugs they buy for the poor in the Medicaid program and for government employees and retirees.

Minnesota and Wisconsin, for example, have incurred the wrath of federal regulators by providing links to Canadian pharmacies on their Web sites, allowing state employees to spend less and saving the states money.

Meanwhile, Illinois, Iowa, New Hampshire and North Dakota are seeking waivers under the Medicare law from Thompson for drug importation programs.

A measure to seek an HHS waiver for a Maryland program passed the state Senate this year but died in the House of Delegates.


Discounts, free drugs

Drug manufacturers took aim last week at congressional efforts to legalize importation. Policy analysts for the Pharmaceutical Research and Manufacturers of America, the industry's Washington-based trade group, said low-income seniors who do not have prescription benefits could save more using industry-sponsored discount and free-drug programs than by using Canadian pharmacies.

Lori Reilly, the group's deputy vice president for policy, said 6.2 million low-income Americans got free drugs last year from pharmaceutical makers' Medicare assistance programs. By using domestic drug programs, she said, seniors can save on shipping and handling fees and avoid potential risks of counterfeit medications.

Reilly also cited a Congressional Budget Office study that concluded last month that U.S. consumers would save 1 percent, or $40 billion over the next 10 years, if importation of medications was legalized. If the legalization was limited to Canadian imports, the report said, the savings would be "negligible."

Substantial change

But Stephen W. Schondelmeyer, an expert in pharmaceutical industry economics at the University of Minnesota and a co-author of the AARP drug price inflation study, said legalizing drug imports from the European Union and Canada had the potential to not only widen U.S. consumers' access to lower-priced drugs but also help put some downward pressure on domestic prices at a crucial time for the pharmaceutical industry.


"Overall, the Medicare prescription drug coverage is the most substantial change we're going to see in the pharmaceutical industry in a century," Schondelmeyer said in an interview. "This is a very dynamic market. Everything's in flux and everybody's re-evaluating.

"In this dynamic market, legalized importation is not a final, absolute answer, but it's another piece of the puzzle," Schondelmeyer said.