May 24, 2018
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Drug Distraction

The wrangling over importing prescription drugs from Canada to lower prices was an interesting sideshow to the larger health care overhaul debate. It also encapsulated the problem of looking for convoluted short-term fixes to the shortcoming of the American medical system rather than dealing with those problems head-on.

Last week, Sen. Byron Dorgan, a North Dakota Democrat, introduced legislation to allow consumers to buy drugs from several other countries. As a safeguard, only medication approved by the U.S. Food and Drug Administration and produced in facilities approved by the FDA could be purchased by U.S. residents. The measure was co-sponsored by Sen. Olympia Snowe.

Sen. Dorgan estimated the legislation would save consumers about $100 billion over the next decade. The FDA, however, warned that safety concerns had yet to be addressed.

The measure was rejected Tuesday night, although lawmakers are still talking about ways to lower prescription drug prices.

The legislation was strongly opposed by the pharmaceutical industry lobbying group PhRMA, which has pledged its support health care reform to the White House, but threatened to withdraw its support over the drug importation issue. PhRMA agreed to help lower health care costs by absorbing $80 billion in discounts over the next decade. But, as Sen. Snowe repeatedly points out, this is a tiny fraction of the overall spending on medication in the U.S.

“As we confront the ever-increasing cost of health care … the imperative is clear that we must address rising costs, or affordable access to coverage simply cannot be achieved and sustained,” Sen. Snowe said recently.

Allowing consumers to buy drugs from Canada, Australia and other countries — where they are less expensive because prices are negotiated as part of national health care systems — is an indirect way to lower costs. A more direct way would be to have the federal government negotiate here, too.

The federal government already negotiates prices for medications for veterans and some cancer patients, as every other developed country does. However, Congress nearly a decade ago passed a Medicare reform that forbids the federal government from negotiating lower drug prices.

As a result Americans pay about twice as much for many commonly used prescription medications. Increasingly, state and local governments are buying these medications from Canada, often as part of regional buying consortiums.

Lowering drug prices should be part of comprehensive health care reform, but importation is not the most direct fix. It could, however, be a useful stopgap until lawmakers are ready to consider legislation allowing drug price negotiations.

Likewise, having the federal personnel office negotiate health care plans that would be available to the public, a major component of the bill being debated in the Senate, is a positive step, but an indirect way to ensure consumers have access to lower priced policies. Why not simply allow people to buy the same plans currently available to federal employees?

Whether it is drug prices or health insurance or medical care, the federal government has the strongest hand to play when it comes to negotiating prices. It is a hand that should be played as it is in every other developed country.

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