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Cheaper Drugs in Foreign Markets Increase the Focus on Domestic Drug Prices

Jennifer Fisher Wilson
[+] Article and Author Information

Potential Financial Conflicts of Interest: None disclosed.


Ann Intern Med. 2004;140(8):677-680. doi:10.7326/0003-4819-140-8-200404200-00044
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In 2003, the U.S. Food and Drug Administration (FDA) staked out postal facilities in major cities across the country for a few days at a time and examined any parcels that appeared to contain drug products. They discovered prescription drugs mailed from all over the world. Later, they released a report detailing what they found: non-FDA-approved, foreign versions of U.S. drugs such as sildenafil, simvastatin, tamoxifen, warfarin, and carbamazepine; controlled substances such as codeine, diazepam, lorazepam, and clonazepam; drugs that require close physician monitoring, such as isotretinoin (which can cause birth defects), lithium (which poses a toxicity risk), and metformin (which requires kidney function monitoring); and foreign versions of 2 asthma medications that had been recalled in some countries because of faulty drug delivery systems. Some drugs arrived damaged, some were packaged in plastic bags or envelopes, while others lacked proper labeling or contained only foreign-language instructions. Most of the drugs came from Canada, but some of the products shipped from Canada came from other foreign suppliers.

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Importation ... too many fleas come with the dog ... and no guarantee of long cost reductions
Posted on April 28, 2004
Robert P Coffey
No Affiliation
Conflict of Interest: None Declared

As a clinical pharmacist with over 20 years of experience, I enjoyed reading your piece in recent Annals "Cheaper drugs in foreign markets increase the focus on domestic drug prices"..I have a few additional comments to offer for consideration:

(1) The real controversy is about value, not just "cost". We must develop more comprehensive economic models which measure and assess the impact of drugs on total cost of care in the US. If we continue to look only within economic silos, relying on compartmentalized cost models, we will not make progress. We will continue to wring out half the cost sponge wondering why it remains soaking wet, with costs still rising. In many instances, drugs as a technology are a good value for the health care dollar we do have to spend. We must be able to distinguish this characteristic. No one can seem to tell me just how much drugs should cost...If you know of anyone who has an answer..I'm anxious to meet them and listen.

(2) We must be careful not to toss baby out with bathwater. As mentioned in your piece, pharmaceutical innovation, and research often leads to greater (and quicker) availability of low cost alternatives to US consumers, including generics. Swinging the pendulum too far in favor of importation can actually weaken this process, and come back to bite us later.

(3) Anything that translates into increased use of generics produces huge savings to consumers. This has been known for years, yet generics remain under-prescribed and overlooked. In contrast to many people's perception, importation is truly a two-way street. The fact that many Canadians come to the US for cheaper prices on generics validates this.

(4) Drug misadventures cost over $200 billion per year in the US. This is as much if not more than we spend on the drugs themselves. Why is this not part of the "cost" discussion? The most expensive drug is the one that patients do not take, or a drug product which causes harm.

(5) Extending across borders puts one more hole in a safety net which is already strained to breaking point. It is becoming increasingly difficult for any single provider to know what patients are actually taking, patients are confused, and with drug therapy becoming more complex, the potential for patients to be harmed by interactions or misadventures is magnified significantly if we extend to providers across international borders.

(6) As mentioned, importation is not a long term solution. As pharmaceutical companies move to limit supplies, we may soon find ourselves competing with Canadians for a finite supply of drug product. Furthermore, also as mentioned in your article, not every branded product on the market imported from Canada remains less costly over time.

(7) In response to increased pressure on supply by American consumers, Canada is importing more from other countries. Many of the countries Canada imports from have serious quality and safety issues that will not get better in the short term, or even in long term.

(8) Safety is a valid concern. Looking at the results of two major enforcement initiatives between ICE team and FDA this past year should give us all cause for concern. Furthermore, technologies which may be employed to deter (but never completely prevent) counterfeiting will carry additional cost, which will most likely be passed on to consumers at some point downstream in the supply chain. There's almost no technology which cannot be duplicated, or defeated by people with criminal intent, or by sophisticated terrorist networks. Terrorists only have to get it right once, even if there's only a small window of opportunity open to them. What we don't know we don't know, and fail to stop could have catastrophic consequences in the US as well as other countries. Terrorists are not going away, and they see counterfeiting as an opportunity to fund their endeavors. They often are well financed, persistent, and are technologically up to speed in many areas. How lucky do we feel?

(9) Do we wish to treat drugs like we would any other consumer good or commodity? If so, and assuming importation is a path to savings with no negative economic consequences,why can't I go to a third world country and purchase an SUV, wide-screen TV, or any other consumer good for a fraction of what it would cost in the US (without paying tariff's or additional fees)? manufacturers are certainly benefiting financially from outsourcing and going "global", why can't I get a break and have access to similar opportunities?

(10) If it does make good economic sense to keep revenues, and jobs in this country, why is no one talking about the devastating impact wholesale importation would have on 200,000 US pharmacists, especially since importation will not produce a long term solution anyway?

(11) If we make a wholesale (and hasty) move toward importation, there are valid concerns about who's at the other end of the supply chain handling and dispensing the medications, and under what conditions. Although websites and advertisements show reassuring pictures displaying a friendly Canadian pharmacist behind the counter, there's no guarantee as to how or who has been handling or dispensing drugs, especially if imported from other countries throughout the world.

Summary: I'm all for more affordable drug therapy, but in my opinion, there are just too many fleas that come with the importation dog... also too many additional disconnects in an already fractured safety net. Although financially and politically expedient in short run, we can, and must do better. The patients we serve deserve a long term solution that will not destabilize the entire equilibrium, and consumers also need to adjust their expectations, and realize that drugs will not be provided for free, or a zero co-pay. It's astonishing to me that many patients willingly spend thousands of cash dollars on cigarettes, alcohol, fast food, casinos, lottery, as well as for unproven herbals, vitamins, diet fads and other expensive products while at the same time bemoaning the cost of co- pays for drugs which have been scientifically proven to reduce the incidence of catastrophic events, and save lives. I guess we have to take a decision to think smarter before we can be educated about making better choices...

Sincerely ,

Robert P. Coffey MS, Pharm D., BCPS Clinical Pharmacist Lowell Michigan

Conflict of Interest:

(I am not speaking on behalf of any of these organizations) HMO P&T Committee (Priority Health) Michigan Medicaid Formulary Committee Consultant - All Pharma Honorarium - Sanofi Executive Board - Michigan Pharmacy Association

Lowering Retail Drug Prices without Importing Cheaper Drugs
Posted on May 12, 2004
Marcus M. Reidenberg
Weill Medical College of Cornell Univ.
Conflict of Interest: None Declared

The usual price quoted for many drugs in the U.S. is the price charged an individual by a retail pharmacy. Organizations such as hospitals, H.M.O.'s, and the federal government receive substantially discounted prices (1). The average cost of medicines in the U.S. is much less than the retail price used for comparison with prices in foreign countries. Danson (2) has found that average prices in the U.S., allowing for discounts, are similar to prices in other industrialized countries if income differences are considered. If there were a requirement for uniform pricing of drug products to all purchasers in the U.S., then the price to the individual retail purchaser could be lowered while maintaining the revenue from the drug to the manufacturer which is presumably needed to maintain new drug R&D programs. A uniform price would have all purchasers sharing in the research costs rather than having the weakest of the purchasers paying the most. 1. Reidenberg MM. An open invitation for an explanation about how drug prices are set. Clin Pharmacol ther 2001; 70:205-7 2.Danson PM, Furulawa MF. prices and availability of pharmaceuticals. Http://knowledge.wharton.upenn.edu/papers/1210.pdf accessed 5/5/04

Conflict of Interest:

None declared

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