Can reimporting medicines lower prices?

September 1, 1999

Pharmaceutical Representative

Legislators are considering a bill that would allow wholesale and retail pharmacies to reimport drugs from countries where they are sold more cheaply.

Legislators are considering a bill that would allow wholesale and retail pharmacies to reimport drugs from countries where they are sold more cheaply. Currently, only pharmaceutical manufacturers are allowed to reimport their products from other countries.

"Drug prices in our neighboring countries to the north and south are much, much lower than in the United States," said Rep. Bernie Sanders (I-VT), co-sponsor of the International Prescription Drug Parity Act. "It is absurd that elderly Americans are forced to travel across the border in order to purchase the exact same prescription drugs – often developed in this country on the taxpayer's dollar – to get a substantially lower price."

Sanders said he hoped the bill would provide opportunities for pharmacies to provide lower cost drugs for U.S. citizens. "We hear a lot about 'free trade' when it benefits big business. What about making this new global marketplace pay off for the average American citizen, the senior citizens living on a fixed income?" he asked. "It is just not right for pharmaceutical companies to be charging our citizens one price and people in other countries another price. This legislation works to level the playing field."

According to a letter written by former FDA commissioner David Kessler, however, reimportation would not necessarily lower prices. "Prices to consumers are generally not lowered as a result of diversion," he said. "Rather, the prices go to various middle men, here and abroad, while consumers bear the risk."

Priced accordingly

The decision to sell drugs more cheaply to other countries is not arbitrary, according to the Pharmaceutical Research and Manufacturers of America, Washington. It hinges on the legal and economic conditions of each market. "It's a matter of responding to the marketplace in each case," said Jeff Trewhitt, spokesperson for PhRMA. "There are all kinds of factors that come into play."

According to Trewhitt, these factors include different exchange rates, economic conditions, dosing regimens and medical practices.

In Mexico, for example, pharmaceutical companies must sell their drugs at lower cost because the Mexican economy is not as strong as that of the United States. "The average Mexican makes about $5,000 a year and the average American [makes] somewhere between $25,000 and $35,000 a year, so you price accordingly," said Trewhitt. Even though the price of pharmaceuticals is lower in Mexico, the cost of drugs has the same impact on a Mexican citizen as it does on an American citizen, he said.

Price controls imposed by the governments of individual countries can also play a role in determining how much a pharmaceutical company charges for prescription medicines. Such is the case in Canada, where the government mandates price controls at the federal and provincial level.

According to a letter to fellow congressmen sent by Sanders and two other co-sponsors of the bill, new legislation would "allow American distributors and pharmacists to reimport prescription drugs into the U.S. as long as the drugs met strict safety standards." But, despite this reassurance and the fact that the bill would require records identifying each shipment to insure that it has met "good manufacturing practice and other standards," those opposed have still expressed concern over how effectively these standards will be enforced if the bill passes.

"You don't know the transportation conditions or the storage conditions in other countries," said Trewhitt. "Were the temperatures accurate? Were the storage conditions responsible? These are legitimate safety questions." Trewhitt also added that the bill lacks safeguards protecting against counterfeit medicines being imported. "It is a risky bill that ought to be summarily rejected," he said. PR

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