The Lincoln Plawg - the blog with footnotes

Politics and law from a British perspective (hence Politics LAW BloG): ''People who like this sort of thing...'' as the Great Man said

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Saturday, May 01, 2004

Pharma Wars: Part the Umpteenth

Last time, Big Pharma managed a nice piece of divide and rule on Congressional Democrats, and secured themselves a solid win in the form of HR 1 (April 17).

Now, one or two Dems (with RINO support [1]) are seeking a little relief for hard-pressed users of prescription drugs bought at the top-dollar prices prevalent in the US: S 2328, short title (!) the Pharmaceutical Market Access and Drug Safety Act of 2004, introduced on April 21.

The idea of S2328 (Boston Globe April 21) is to allow the importation of drugs from jurisdictions - Canada primarily - where the prices are government-controlled.

Covering much the same territory is S 2307 of Finance Committee Chairman Chuck Grassley (R-IA), introduced on April 8, and (apparently to come) a bill from Judd Gregg (R-NH), Chairman of the Health Committee.

The overall tone of the Globe piece is relatively upbeat - with Frist's mouthpiece saying the GOP leadership is
...looking at different ways to make it safe. If they are able to do that, I think you will see it move forward.

(Sounds compassionate, in no way pre-empts squelching the bills in due course.)

An LA Times editorial (April 27) has a less hopeful tone: for instance, it says Gregg
opposes much of [S 2328's] wording.

I suspect that, in an election year, opponents of drug importation would not have to strive too officiously to keep bills from getting reported out. It's the symbolism that counts.

In addition, the Congressional Budget Office has just published a short paper (April 29 - PDF) which concludes that
permitting the importation of foreign-distributed prescription drugs would produce at most a modest reduction in prescription drug spending in the United States. H.R. 2427, for example, which would have permitted importation from a broad set of industrialized countries, was estimated to reduce total drug spending by $40 billion over 10 years, or by about 1 percent. Permitting importation only from Canada would produce a negligible reduction in drug spending.

(HR 2427 was a bill passed by the House in 2003 and strangled by the Senate Health Committee.)

So, I'm forced to enquire, where's the beef? If the benefit to be derived from the broader scheme of importation is a mere 1% of drug spending, why the hoo ha?

Now, cost structures being what (I imagine) they are, almost all of any reduction in drug spending would come straight off net earnings; and $4 billion a year is not chickenfeed even for Big Pharma - not all of which is American, of course.

The CBO paper is largely speculative: but it does point, for instance, to the ways in which Big Pharma could balk an importation scheme. By threatening the supply of putative exporting countries; by moving production to facilities not registered with the FDA; by using patent law to prevent importation [2].

A case of the méchant animal [3], then; perhaps resistance is futile. Worthwhile pushing things a bit further, perhaps, even if only to raise morale dumped in the toilet by the sad doings on passage of HR 1.

  1. And Trent Lott's - what's up with that?

  2. Citing the 2001 Jazz Photo Corporation case - around which I have no intention of getting my head, unless absolutely necessary.

  3. For the history of
    Cet animal est très méchant
    Quand on l'attaque il se défend
    see my November 12 2003 piece.


There's a whole lot going on. (Who knew?) In no particular order:

Our old friends (remember Karen Ryan?) Health and Human Services have the HHS Task Force on Drug Importation which is in the middle of a schedule of hearings.

The effect of importation on pharmaceutical company profits is paradoxical. According to a study (PDF) published on April 15 by the Boston University School of Public Health, imports from Canada would actually increase profits, if more than around 44% of imports were new sales. (Boston Globe piece thereon.) Pharma stocks, apparently, are risky but due a rally.

A seemingly upbeat Wall Street Journal piece (April 13) noted. HHS Secretary Tommy Thompson wants his Task Force to report by mid-summer.

John Kerry is in favour, according to his site. And a Harris Poll (April 28 - PDF) shows an 84:7 margin in favour of drug importation. But - despite the fact that Kerry supports, and Bush opposes, the idea - only 40% say Kerry is likely to make drugs more affordable, if elected: 26% say Bush would do so, for crying out loud. (I heard there was some sort of election going on...)

The role of the AARP - the biggest organisation of seniors (or the noisiest, perhaps?) - may be important. Its lobbying for the Medicare was, I seem to remember, pretty important in getting the bill through. And now it is backing importation.

Apparently, according to the WaPo piece, the business is also tied up with the nomination of FDA Commissioner Mark McClellan (related to Scott?) to head Medicare.

A 2003 piece on HR 2427 by Rep Joseph Pitts gives a flavour of opposition rhetoric; and the drug stores' response to the HHS Task Force.

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