20 May 2004
U.S. Senate to Hear Testimony on Importing Drugs From Canada.
May 20 (Bloomberg) -- U.S. senators will hear testimony today about the safety of importing drugs from Canada as support grows among Republican and Democratic lawmakers to legalize purchases from countries where drug prices are lower.
Senators including Republicans Judd Gregg of New Hampshire and Charles Grassley of Iowa, and a group led by North Dakota Democrat Byron Dorgan and Maine Republican Olympia Snowe are pressing to legalize imports to reduce medical costs for state employees, retirement programs and the elderly.
U.S. President George Bush, who opposes drug importation, may end up signing a bill that sanctions buying of medications from Canada, where price controls hurt drugmakers' profits. Health and Human Services Secretary Tommy Thompson has said he would recommend against a Bush veto on Canadian imports.
Refusing to sign an import bill would give Bush ``all the headaches he can handle until election day,'' Jeffery Weekly, vice president for equities at G7 Group, a policy analysis firm in Washington, said in a telephone interview. ``The political implications of doing nothing in this area are starting to be seen as unpalatable.''
The administration and manufacturers, including Pfizer Inc., the world's largest, say imports would open the $216 billion-a- year U.S. wholesale drug market to counterfeit medications. Gregg, who's holding the hearings, said his bill will focus on protecting the safety of the U.S. drug supply.
The U.S. Food and Drug Administration has begun estimating the cost implications of an import program, said William Hubbard, the agency's associate director of policy.
``The administration would have to study closely any bill that emerges -- study it very thoroughly,'' said Trent Duffy, a White House spokesman, in a telephone interview. ``The principle priority of the president is to ensure the safety of the American people.''
Drug Company Donations
Senator John Kerry of Massachusetts, the presumed Democratic nominee for president, has said he supports drug imports.
Kerry's campaign has received $71,000 from Pfizer and other makers of drug and health products as of March 24, according to the Center for Responsive Politics. The same groups donated $708,000 to Bush, and Pfizer chief executive Hank McKinnel alone has raised $100,000 for the incumbent.
``If the president is in bad shape in his re-election campaign, he would have to take less of a hard line'' on imports, said Paul Heldman a policy analyst at Schwab Washington Research Group.
Drugmakers lose about a third of their profit when customers switch to Canadian sources, according to Alan Sager, a health economist at Boston University. GlaxoSmithKline, Eli Lilly & Co. and Astrazeneca Plc limit their supplies to Canadian wholesalers and pharmacies. Pfizer has shut off supplies to Canadian drug sellers that export their products to the U.S.
Under the Dorgan bill in the Senate, companies that blocked or limited supplies to Canada would lose tax exemptions.
Formidable Challenge
The FDA prohibits companies and individuals from buying drugs overseas for resale, although it hasn't enforced its rules when individuals buy medications for personal use.
Fending off legalized drug importation presents a ``formidable challenge'' to drugmakers, said Jeff Trewhitt, a spokesman for the Washington-based industry group Pharmaceutical Research and Manufacturers of America. He has been meeting with newspaper editorial boards to encourage their opposition to imports.
``We're going to do everything we can to emphasize the pitfalls of importation,'' Trewhitt said in a telephone interview.
The House of Representatives passed a measure in July that would allow drug imports from Canada and other countries. The shipments may save $638 billion for seniors who don't have insurance coverage, out of the $1.8 trillion they spend annually for drugs, said Representative Gil Gutknecht, a Minnesota Republican and the bill's chief sponsor, at the time.
Iowa's Push
Lawmakers in at least half the states have filed proposals to import drugs. After congressional approval of a measure removing the need for FDA permission, Iowa may put its plan into motion within three to six months, said Roger Munns, a spokesman for the state Department of Human Services.
Iowa Governor Tom Vilsack, a Democrat, has asked the FDA to permit him to license drug distributors in Canada to supply Iowa pharmacists. The state's proposal to allow about 35,000 state employees, retirees and dependents to buy medications from over the border would save the state $10 million, according to Munns.
Health officials in Minnesota, Illinois and North Dakota have asked the FDA for waivers to permit retirees, state employees and the uninsured to buy drugs from Canada. Officials in Oregon are preparing to do so.
``The governor wants to offer an affordable and safe way to buy prescription drugs,'' Bruce Goldberg, 48, administrator for the Oregon office of health policy and research, said in a telephone interview.
Safety Issue
The prospect of legalized importation has increased states and cities interest in drugs from Canada, said Tony Howard, president of CanaRx Services, Inc., the Tecumseh, Ontario, pharmacy that supplies drugs to city employees in Springfield, Massachusetts. City officials say the program has saved Springfield about $2 million since it began last year.
``We have a flood of potential new customers right now,'' Howard said in a telephone interview.
While the Dorgan-Snowe measure would also allow drug imports from countries in Europe, New Hampshire Senator Gregg said he is proposing importation from Canada alone until the safety of purchases from other nations can be assured.
Countries such as Greece and Portugal ``don't have the effective enforcement of standards that we require in the U.S.,'' Gregg said in a telephone interview. The other bills don't give the FDA adequate authority or resources to inspect pharmacies in other counties, he said.
To contact the reporter on this story: John Lauerman in Boston at .
To contact the editor responsible for this story: Robert Simison in Washington at
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