23 August 2004

End to ban on reimported drugs is good medicine

The state of Illinois is about to become a federal lawbreaker -- and proud of it.

Last week, it announced that in September it will help residents buy medicine from pre-screened pharmacies in Canada and Europe. That violates a ban against reimporting U.S.-made drugs from other countries. But when a prescription drug for heartburn, Aciphex, costs more than twice as much in the USA as it does in Ireland, Illinois figures being a scofflaw is worth it.

Illinois represents the most brazen defiance to date of the federal ban, imposed because of safety concerns about reimported medicines. Its action shows how far politicians and consumers will go to cope with sky-high prescription drug bills at home. The steep difference in costs explains why seniors ride buses to Canada and Mexico to buy medicines, Canadian mail-order pharmacies thrive and other states have helped residents buy drugs abroad, but not as extensively as Illinois intends.

An end to the ban is overdue. Although federal officials have threatened to punish violators of the ban, they've been reluctant to act. Now, support for the ban is cracking -- and none too soon. President Bush said last week that he'd reconsider the ban if assured about safety issues, Democratic opponent John Kerry wants the ban lifted immediately, and Congress is weighing legislation to lift the restriction.

While eliminating the ban alone would not solve the problem of high drug costs, it could reduce U.S. prices by prompting the pharmaceutical industry to curb artificially low prices for drugs in foreign markets.

Drugs are cheaper abroad because government price controls keep other nations from paying their fair share of research-and-development (R&D) costs for new medicines -- $800 million a drug on average, according to the drug industry. The U.S. pays higher prices to subsidize breakthrough drugs that other countries can buy on the cheap.

Ending the reimportation ban could reduce the advantage other nations enjoy:

·Drugmakers can be tougher in negotiating with foreign purchasers so the buyers pay a greater share of R&D costs. Right now, these nations get a free ride because Americans pay more. The reimportation ban stops drugmakers from testing what other countries will pay, notes Roger Pilon of the Cato Institute, a free-market think tank.

·Pharmaceutical companies fear that unless they sell at the lower prices demanded by foreign governments, those countries will steal their patents and let generic manufacturers sell copycat drugs for far less. While some experts believe that fear is exaggerated, the U.S. government should police international trade agreements to ensure that patents are protected.

Before lifting the ban, the U.S. Food and Drug Administration says it wants to be sure that reimportation would not pose new safety risks, which it claims are greater than widely acknowledged by critics of the ban.

While safety concerns must be addressed, the evidence of risks is small. Congressional hearings last year found few adverse health reactions blamed on Canadian imports.

A ban that keeps drugs expensive here so the rest of the world can get discounts is a bad deal for Americans. Letting the free market work makes a lot more sense.

USA Today
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