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Why We Pay So Much For Drugs
How the clamor for cheap Canadian imports is heating up the 2004 campaign and giving Washington a headache
Helen Clark of Kennebunk, Maine, is a smuggler of sorts. At 77, the retired registered nurse doesn't look the part. She still does volunteer work—administering flu shots, cutting toenails and organizing blood drives—at the Southern Maine Medical Center, where she worked for more than four decades, first in the maternity ward and later in the operating room.
Clark is a model of frugality as well. She and her husband Dorrance raised 10 children on modest salaries. When he developed lung cancer in 1991, she stopped working to care for him until he died. She has lived in the same house since she was 1 year old. She seldom buys anything for herself, reuses already reused sewing material and carefully budgets her food money. "You plan out what you can afford," she says.
What has turned Clark into a renegade bargain hunter is the price of her medications. Like many other elderly people, she takes multiple prescription drugs for several conditions, including high blood pressure, elevated cholesterol and glaucoma. To make the money stretch, she joins other seniors in her state on overnight bus trips to St. Stephen, N.B., just across the border from Calais, Maine. On average, name-brand prescription drugs in Canada cost an estimated 40% less than they do in the U.S. On a trip last November, Clark did even better than that, buying a six-month supply of medications for a little more than $1,000, a cache that she estimates would have cost about $3,000 in Maine for the same drugs. One of them is Lipitor, the expensive, heavily marketed cholesterol-lowering drug developed by Pfizer. "Lipitor is my biggest savings," Clark says. "For a six-month supply, it's $1,900 in the U.S. I paid $500 [in Canada]." At U.S. prices, she couldn't afford her total drug bill and would have to pick and choose which conditions to treat.
Yet what Clark and others are doing is technically illegal, since the U.S. forbids the import of prescription drugs by anyone other than the original U.S. manufacturer, and even then only when the drugs meet all the approval requirements of the U.S. Food and Drug Administration (FDA). The FDA contends it is looking out for consumer safety, but in fact a growing volume of prescription drugs sold in the U.S. is made overseas and brought in by domestic manufacturers. What's really being protected, critics say, is the pharmaceutical industry. It has a powerful partner in the FDA, which over the past year has conducted widely publicized seizures of prescription drugs shipped into the U.S. from Canada, Mexico and elsewhere that it maintains could be harmful to consumers. The most recent disclosure came last week, when the FDA revealed a blitz inspection of medicine being imported from Canada that turned up five packages of an asthma medication, Serevent, that had been recalled in Canada because of a manufacturing defect.
While there is no doubt that counterfeit and adulterated medicines—some potentially injurious, possibly even lethal—are sold over the Internet by unscrupulous vendors, a TIME investigation suggests the FDA's actions against Canadian imports have been part of a concerted campaign to simultaneously discredit its counterpart agency in Canada, provoke fear among American consumers who buy their drugs there, blunt an exploding political movement among local and state governments to begin wholesale drug buys in Canada and ultimately preserve the inflated prices charged U.S. consumers and taxpayers.
This story continued on TIME.com...
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PhRMA Follies
IS IT ILLEGAL? No. Is it unethical? By the standards of Congress,
probably not. Nevertheless, rumors -- and his office insists that they
are still only rumors -- that the Pharmaceutical Research and
Manufacturers of America has offered Rep. W.J. "Billy" Tauzin (R-La.) an
unusually large sum to become its president are making many queasy this
week. Mr. Tauzin, a 12-term veteran of Congress and chairman of the
House Energy and Commerce Committee, is certainly entitled, at age 60,
to resign and do something a bit less stressful. But while no law
prevents him from accepting an employment offer from the pharmaceutical
lobby, the fact remains that he has spent the better part of the past
year presiding over the passage of a Medicare pharmaceutical drugs bill,
presumably on behalf of the American people. For Mr. Tauzin to leave so
soon afterward to work for the pharmaceutical association, whose
companies reaped substantial benefits from that bill, provides a
particularly pungent example of how quickly the "revolving door" between
Congress and K Street is now revolving and how lucrative this game has
become for its participants.
No one is suggesting that Mr. Tauzin was offered this job during the
Medicare debate. Drug companies in any case were already among his
biggest campaign supporters (and indeed among the largest donors to all
congressional campaigns). But when revisions to the law are proposed --
and they will be -- it will certainly be useful for the pharmaceutical
lobby to have one of the bill's godfathers as its paid advocate,
particularly if, as another unconfirmed rumor has it, Mr. Tauzin takes
the offer immediately, rather than serving the remainder of his term. In
that case, he will soon be in a tricky position, because federal law
would prohibit him from lobbying Congress (but not the White House)
about anything for the next year. Again, his staff insists that he fully
intends to play by the rules -- resign his committee chairmanship,
recuse himself from relevant issues, possibly resign from the House
altogether, if necessary. But even if he never breaks the rules, Mr.
Tauzin's decision to take the job would be another disappointing
illustration of the many ways members of Congress keep finding to lower
their standing in the eyes of the public.
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