Canadian Prescription

Posted July 28, 2009, at 6:27 p.m.

Importing drugs from Canada as a means of spurring competition to reduce prescription medication costs is a tiny, but needed, part of the larger health care reform puzzle.

An amendment passed by the Senate earlier this month sent the message that there is congressional support for importation, but didn’t really change the rules governing drugs crossing the border.

A bill, introduced in years past by Sens. Olympia Snowe and Byron Dorgan, a North Dakota Democrat, would set up a system to import drugs from Canada safely. The Congressional Budget Office estimated importation could save at least $50 billion over 10 years. The savings would grow if U.S. companies lower their prices to compete with the imports.

The senators have been assured their bill will be considered by the Senate this year.

Because the Canadian government regulates drug prices as part of its national health care system, prices are often half that in the United States for the same medication. An estimated $1 billion worth of prescription drugs are sent from Canada to the United States each year.

Under current law, U.S. residents can return with a three-month supply of drugs purchased in Canada. Groups in Maine and other border states have long organized bus trips to Canada so seniors and others could buy drugs there.

Despite the fact that Americans buy some drugs in Canada and a large volume over the Internet, critics of allowing more importation — mainly drug makers — warn that counterfeit and dangerous drugs could be sold. There is no evidence that drugs sold in Canada are less safe than those sold in the U.S.

And a 2004 report by the U.S. Government Accountability Office found that prescription drugs it ordered from Canadian Internet pharmacies were correctly formulated, packaged and delivered.

Negotiating or setting drug prices has, so far, been a nonstarter politically, so lawmakers resort to an alternate scheme such as importation.

Clearly, there are savings to be had when it comes to prescription medications. Last month, the Pharmaceutical Research and Manufacturers of America, or PhRMA, said it would contribute $80 billion over the next 10 years to improve drug benefits for seniors under Medicare.

“The fact is, that while the announced savings are substantial, they amount to less than 4 percent of our nation’s annual prescription drug spending, and when you consider that other developed nations pay 35 to 55 percent less for their medications, it certainly doesn’t close the gap much,” Sen. Snowe said of the announcement. Plus, she pointed out, if more seniors are able to buy medications due to other fixes in Medicare, the savings offered by PhRMA will be more than offset by new drug sales.

The bottom line is that it is the job of the U.S. government and Congress, not that of Canada, to safeguard American lives and health by making drugs more affordable.

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