Non-Environmental Cost-Benefit News

In 2003, Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Pub. L. 108-173, which for the first time provided a prescription drug benefit for seniors and people with disabilities. The MMA also contained provisions that would permit the importation of prescription drugs into the U.S. if the Secretary of the Department of Health and Human Services (HHS) certifies that drugs imported from Canada pose no additional risk to public health and safety and that such imports would provide significant cost savings to American consumers. The
MMA also requires the Secretary to conduct a
study on the importation of drugs. The conference
agreement for MMA included eleven issues for
consideration.

Legalizing prescription drug imports from Canada would threaten the health of Americans, provide meagre savings and create a regulatory nightmare, the Bush administration has concluded.

U.S. Surgeon-General Richard Carmona argued in a report that the risks of legalizing imports far outweigh the benefits. ''It would be extraordinarily difficult and costly for personal importation to be implemented in a way that ensures the safety and effectiveness of the imported drugs.''

The 145-page report, released yesterday by the Department of Health and Human Services, is a blow to proponents of legalizing drug imports, including many members of the U.S. Congress, who have long argued that doing so would temper soaring costs.

During the election campaign, President George W. Bush appeared to open the door to drug imports from Canada, on the condition that authorities could ensure the safety of those drugs.

But Mr. Carmona said -- in a report that largely reflects drug firms' views -- that keeping the drug chain safe would be difficult for the Food and Drug Administration.

The Bush administration has so far done little to stem a growing illegal trade that now tops $1.5-billion (U.S.) a year. The report estimates that about half of the illegal prescription drug imports now come from Canada.

Congress ordered up the report in 2003 as part of the legislation that added part prescription drug coverage to the government-funded Medicare scheme. Congress initially voted to legalize imports, but the measure was stripped from the final law in favour of more detailed study of the costs and benefits.

Among the more interesting findings in the report is Mr. Carmona's conclusion that the savings attributed to imports have been vastly exaggerated. Proponents of legalization like to cite savings of up to 80 per cent on many popular drugs.

But the report said that simply isn't true, and that the savings are exaggerated. Prices of 22 best-selling drugs -- including Zoloft, Paxil, Celebrex and Nexium -- are just 37 per cent less at Canadian-based Internet pharmacies than at competing U.S. vendors.

What's more, the report found that generic drugs are 32 per cent cheaper in the United States than in Canada.

Instead of illegally importing drugs, Carmona urged Americans to shop around for the best prices at home and always ask doctors or pharmacists for generic alternatives.

Among the report's findings:Savings would represent a small percentage of Americans' total drug costs.Importing drugs is fraught with risk, including buying bogus, dangerous and unregulated drugs.Legalizing imports would slow the development of new drugs.Washington would likely face legal and constitutional challenges from the drug industry if it sanctioned imports.Legalizing imports raises liability problems throughout the distribution chain, which could ultimately push up the cost of imports.

U.S. Department of Health and Human Services