ILWU WARRIOR
AN INJURY TO ONE IS AN INJURY TO ALL
SUPPLEMENTAL WASHINGTON REPORT
LINDSAY MCLAUGHLIN, LEGISLATIVE DIRECTOR
BRIAN DAVIDSON, LEGISLATIVE ASSISTANT
VOLUME 5, NUMBER 5
June 24, 2004
Drug Reimportation
Senators Lott, Snowe, Chafee and McCain joined Senators Dorgan and Kennedy to introduce a bipartisan bill, S. 2328, the Pharmaceutical Market Access and Drug Safety Act of 2004. It allows U.S. consumers, pharmacists and wholesalers to import FDA-approved drugs from Canada (upon enactment) and European Union countries and others (one year later). Drugs in Canada and other countries sell for 35 to 55 percent less than U.S. prices. This bill, which the AFL-CIO supports, includes important safety requirements and protections against drug companies using loopholes to restrict the sale of drugs to the U.S. The bill will be taken up by Committee some time after the July 4th recess. HELP Committee Chairman Senator Judd Gregg has a competing partisan bill that may be marked up in competition with S.2328.
Over the last year, support for a reimportation law has been building, as voters have identified this as a key issue. A group of House Republicans made reimportation a central issue during the Medicare prescription drug debate last year, and a number of state officials struggling with escalating drug costs, including both Democrats and Republicans, have indicated their support for such a measure. It is not clear what action, if any, the Senate will take on the bills before them.
As explained by Carl Levin, Democratic Senator from Michigan, If John Smith walks into a pharmacy in Detroit today to buy 10 mg of a gastrointestinal drug, Prilosec, he is going to pay about $126. However, if John crosses the Ambassador Bridge and buys the same amount of Prilosec from a drug store in Windsor, he will pay about $71. If Jane Jones stops by a pharmacy near Tiger Stadium to get a month's supply of Lipitor (an anticholesterol drug), she will pay about $74. But if Jane drives through the Detroit-Windsor tunnel to Ontario, she can buy the same supply of Lipitor for $41 in Windsor. As a matter of fact, on average, prescription drugs in the U.S. are priced 34% higher than the exact same products in Canada.
And it's not only Canada. A recent study showed that the same drug that costs $1.00 in the U.S. costs only 69 cents in the United Kingdom, 65 cents in Germany, 55 cents in France and 52 cents in Italy. Americans pay more for prescription drugs than citizens of any other country on the planet, as prescription drugs are growing in importance as an essential element of medical treatment. Some prescription drugs have even replaced the need for an operation that may have been commonplace 30 years ago. By paying such high prices, Americans end up bearing the brunt of the costs of the important research and development that go into creating the wonder drugs upon which so much of the world now relies. This obvious price discrimination against Americans by our own drug companies has got to stop.
One study recently estimated that U.S. citizens would have saved $38.4 billion in 2001 alone if they had been able to buy medications at Canadian prices. And, while it is technically illegal unless a person can obtain a federal waiver, thousands of Americans each year get their prescription drugs from Canada. It is also illegal for U.S.- licensed pharmacists and drug wholesalers to import FDA-approved medicine into the U.S.
According to a report this month by Fortune Magazine, once again, pharmaceutical companies are the nation's most profitable industry with a whopping 18.5% in profits, and under the current pricing system, this multibillion dollar industry has the American consumer to thank for that.
Drug reimportation is not the ultimate solution to the issue of Americans subsidizing the research and development costs of the pharmaceutical industry worldwide. However, it is a way to try to get drug companies to the bargaining table to address the price inequities that exist. The Senate should take action on drug reimportation legislation this year and level the playing field for the average American consumer.
SAMPLE LETTER SENT BY INTERNATIONAL PRESIDENT SPINOSA TO SENATORS ON June 24, 2004
On behalf of the International Longshore and Warehouse Union (ILWU), I urge you to co-sponsor S. 2328, the Pharmaceutical Market Access and Drug Safety Act of 2004. If you have already co-sponsored the bill, I would like to take this opportunity to thank you and ask that you fully support the legislation and work towards its final passage.
I understand that Senator Judd Gregg, Chairman of the Health, Education, Labor, and Pensions Committee, is supportive of drug importation and intends to mark-up his legislation (S.2493) after the recess. Chairman Gregg’s bill has a number of major problems that I believe will thwart the ability of seniors, employers, pharmacies, and insurers to gain access to safe, affordable imported prescription drugs. Instead, the ILWU urges you to support and co-sponsor S. 2328, the bipartisan importation bill.
Here are some reasons the ILWU supports the bipartisan Dorgan-Snowe legislation over the Gregg approach. The Gregg bill:
Fails to accommodate for attempts by the pharmaceutical companies to undermine importation by making minor, non-clinical changes to drugs sold in other countries. Thus, a drug company could alter the packaging or even just the color of a pill for sale in Canada, making those drugs technically not FDA-approved and therefore ineligible for importation. The bipartisan Dorgan-Snowe bill accommodates for such alterations so that affected drugs can still be imported.
Does not prevent pharmaceutical companies from writing into their contracts with foreign pharmacies provisions that prevent those pharmacies from selling to customers in the United States. The bipartisan Dorgan-Snowe bill prohibits drug companies from using their contracts with foreign purchasers to hinder the free-trade of pharmaceuticals.
Calls on the Department of Health and Human Services to prohibit the importation of drugs from certain countries, including Canada, if it finds that such drugs pose an “increased risk” to the public health. This seemingly innocuous provision is nearly identical to current law, which states that drugs can only be imported if HHS certifies that the practice will not pose an “additional risk” to the public health. HHS has used this overly-stringent provision to prohibit importation thus far, and the Gregg bill, in essence, continues to allow HHS to prohibit it.
These aspects of the Gregg bill pose the largest, but not the only, obstacles to the safe importation of prescription drugs. In fact, other parts of his bill actually limit the ability of the FDA to ensure the safety of imported drugs. Please reviews the fact sheets attached that fully explain the differences in these two bills.
Patients, pharmacies, employers, and insurance companies have rightly clamored for relief from the high cost of prescription drugs. The Gregg bill, however, will not deliver for them. We strongly urge you to reject this flawed legislation and instead co-sponsor S. 2328, bipartisan legislation that will provide immediate, real relief to all Americans.
WHY THE GREGG BILL IS A BAD APPROACH
Patients in the United States pay much more for prescription drugs than patients in any other country. Americans pay sixty percent more than the British or Swiss, two-thirds more than Canadians, 80% more than Germans, and twice as much as Italians. Drug companies can import FDA approved drugs manufactured in FDA approved plants, but American patients are banned from buying these drugs from abroad, even if they were originally manufactured in the United States and then shipped abroad. This legal double standard allows drug companies to maintain artificially high prices for American consumers, while charging much lower prices abroad.
A legitimate drug importation bill would end this legal double standard, so that Americans can purchase FDA approved drugs at more reasonable foreign prices from foreign wholesalers or pharmacies. Any such bill must be accompanied by strong safety requirements to assure that any drugs imported from abroad—whether originally manufactured in the United States or not—are FDA approved and manufactured in FDA approved plants.
The Gregg-Smith “Safe IMPORT Act” can’t pass the truth in advertising test. It is a political fig-leaf, not a solution. It pretends to give patients access to imported drugs, but the reality is that drug companies are still left in control. Consumers will have no greater access to lower priced drugs than they do today. The bill unlocks the legal gate that prevents importation—and then hands the key over to drug companies, who will promptly lock it again. In addition, the safety regimen the bill puts in place has serious loopholes that would still leave patients vulnerable to counterfeit or unapproved drugs shipped from overseas.
Drug companies still in control—no relief for American consumers
Legalizing importation of drugs from abroad provides no help to patients unless there are lower-priced drugs available for them to buy. Drug companies are already acting to cut off supplies of drugs to Canadian pharmacies and wholesalers unless they agree not to resell the product in the U.S. Canadian health authorities have indicated that if drug companies restrict supplies to Canada, they may need to act to bar exports in order to insure that there is an adequate supply for Canadians.
The Gregg bill provides no limitations on drug companies’ ability to control the supply of drugs available for importation at lower foreign prices. The result is that every drug company will limit supply or insist on contractual arrangements that will block U.S. consumers from taking advantage of lower foreign prices. As the Canadian International Pharmacy Association, the group of Canadian pharmacies that currently supplies lower-priced drugs to Americans, stated, “If left unchecked manufacturers will inevitably choke off the entire drug supply to our pharmacies which means 2 Million American patients will go without their medications with few alternative options . . . The program this Bill (Gregg-Smith) proposes is meaningless and impractical if not downright impossible… Even Canadians know when we are being set up to fail.”
The Gregg bill limits importation to drugs from Canada for at least the first three years. After that, the Secretary of HHS may choose but is not required to expand the program to other countries. Even if drug companies were prohibited from discriminating against Canadian pharmacies or wholesalers that exported to the United States, there simply is not a large enough supply of drugs going to Canada to make lower priced drugs available to Americans on a significant scale. That is why the Congressional Budget Office stated that, “Expanded parallel trade with Canada by itself would offer sharply limited prospects for aggregate savings given the small size of the drug market in Canada.” Conditioning imports on a Secretarial certification of safety is a discredited strategy, even if Americans could wait three years for relief from high drug prices.
The argument of the Gregg bill sponsors that the Canadian supply could be expanded by transshipment from Europe doesn’t stand up to scrutiny. As the Canadian International Pharmacy Association stated, “Under Canadian law, specifically the Food and Drug Act, it is illegal for any entity to trans-ship drugs in finished dosage form from a foreign country into Canada even if it is designated for export only. Even though the Gregg Bill would allow for that in terms of entry into the U.S. it still doesn’t change the Canadian law. Trans-shipments are illegal in Canada.” Moreover, there is nothing in the Gregg bill that would prevent drug companies from putting the same restrictions on sales by European wholesalers that they are already putting on sales by Canadian pharmacies: no drug supply unless the wholesaler assures that the drugs won’t end up in the U.S. market.
The Gregg bill delays legal importation even from Canada for a year. While the bill does allow people to cross the border and legally bring back drugs for their own use, this is not a meaningful liberalization. Although this is technically illegal today, FDA and Customs exercise their enforcement discretion to allow it. The more important traffic in mail-order and internet ordered drugs would remain illegal for one year after the bill is passed.
The Gregg bill does nothing to address the more subtle ways in which the drug companies could prevent drugs from being imported or reimported into the U.S. at lower foreign prices. Safety under any drug importation bill is assured by the requirement that only FDA approved drugs manufactured in FDA approved plants may be imported. Without legal safeguards, drug manufacturers can easily use this safety requirement to subvert the law. For example, they could set up a separate plant for drugs to be sold in Europe or Canada. Even if the drug was identical to the U.S. drug, it would no longer be manufactured in a U.S. approved plant and would therefore not be eligible for import. Or a drug manufacturer could make a small change in a drug—changing the color of the pill, for example. They could get approval for the changed drug from the European approval authority and sell the changed drug in Europe, but never seek and therefore never receive FDA approval. The drug would then no longer be an FDA approved drug, even though it would be the same drug that the FDA approved in all the ways that would affect patient safety or effectiveness.
Loopholes and inadequacies in the Gregg bill would still leave American consumers vulnerable to importation of counterfeit and unapproved drugs
There are two keys to assuring that imported drugs are safe and effective. First, the legislation must set up a process to assure that the pill that leaves the plant is FDA approved and that the plant is FDA-inspected. Second, there must be safeguards to ensure that a counterfeit or unapproved drug is not introduced into the supply chain between the plant and the consumer. The Gregg bill has weaknesses on both counts.
The Gregg bill does not assure that pills imported under its program are manufactured in an FDA approved plant. While the bill imposes this requirement in theory, it provides no mechanism by which importers or foreign wholesalers could determine whether or not a drug offered for export is manufactured in an FDA approved plant.
The Gregg bill does not assure that pills imported under its program will be FDA-approved. As in the case of manufacturing, the bill imposes this requirement in theory, but it provides no mechanism by which importers or foreign wholesalers could determine whether or not a drug offered for export is FDA-approved.
The Gregg bill’s pedigree requirement to prevent counterfeit pills being introduced into the chain of custody is weak.
--Instead of providing rigorous and routine inspections of importers and exporters to verify the chain of custody, as the bipartisan bill does, the Gregg bill only allows inspection if the FDA “has reason to believe” that an imported drug “presents a risk to public health.”
--The Gregg bill gives the FDA no authority to investigate the pedigree up the chain of custody if it suspects counterfeiting has occurred. Only inspection of the paper documentation by the firm that actually imports the drug—not all the firms that might have handled it before the ultimate sale—is authorized.
--The FDA is not given any authority to inspect the pedigree of mail-order drugs sent to individuals.
--There is no requirement for anti-counterfeiting technology to distinguish drugs sent legally to individuals from those sent illegally.
WHAT TO DO
Contract your Senator and ask them to Co-Sponsor and support S. 2328, the Pharmaceutical Market Access and Drug Safety Act of 2004.
The following Senators are already co-sponsors of the legislation and should be thanked and asked to fight for the legislation:
Senator Boxer
Senator Feinstein
Senator Inouye
The rest can be asked to co-sponsor S.2328.
ALASKA Senator Ted Stevens (202) 224-3004
Senator Lisa Murkowski (202) 224-6665
CALIFORNIA
Senator Dianne Feinstein (202) 224-3841
Senator Barbara Boxer (202) 224-3553
HAWAII
Senator Daniel Inouye (202) 224-3934
Senator Daniel Akaka (202) 224-6361
OREGON
Senator Gordon Smith (202) 224-3753
Senator Ron Wyden (202) 224-5244
WASHINGTON
Senator Patty Murray (202) 224-2621
Senator Maria Cantwell (202) 224-3441
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