Tuesday, August 17, 2004
Illinois to test the reimportation waters
[Don Babwin, "Ill. Gov. Unveils Online Pharmacy Network," Associated Press, The Wichita Eagle, 17 August 2004.]
Illinois will join the ranks of northern states actively facilitating prescription drug reimportation under a new plan unveiled today. Will the federal government step in? Will U.S. drug comapnies further restrict supplies to Canada? Will other states follow suit? There's only one way to find out, Illinois Governor Rod Blagojevich has apparently decided:
Ignoring a federal ban on prescription drug imports, Illinois' governor announced Tuesday that the state would have an online clearinghouse running within a month to help residents purchase drugs from Canada, Ireland and the United Kingdom.
The state won't import the drugs itself, but plans to contract with a Canadian company to connect state residents with foreign pharmacies that have been approved by state health inspectors.
"We have taken every possible step we could think of to convince the FDA, and convince the Congress, and anyone and everyone who will listen, that people across Illinois, and across our country, deserve access to safe and lower cost prescription drugs," Gov. Rod Blagojevich said. "The federal government has failed to act. So it's time that we do."
Prescription drugs are often cheaper in Canada and other countries because of government price controls. The Food and Drug Administration opposes allowing prescription drug imports because it says it cannot guarantee the drugs' safety.
Federal officials earlier rejected an Illinois request to set up a pilot program to buy drugs from Canada. The governor's new plan would be an "aggressive expansion," said William Hubbard, FDA associate commissioner for policy and planning.
"The drugs that would be accessed from this program would be illegal and we would have serious concerns because the drugs wouldn't be regulated by an American health authority," Hubbard said.
Blagojevich has said safeguards could be built in to any program, including limiting the imports to only refills of already approved prescriptions.
The savings would be high, he said. A study Blagojevich commissioned last year found Illinois would save $91 million if state employees and retirees bought drugs from Canada. If all Illinois residents used the program, the first year of saving could reach $1.9 billion, he said.
By also tapping into pharmacies in Europe, the proposed network would go beyond those in Minnesota and Wisconsin, where Web sites help residents buy prescription drugs from Canada.
Generic drugs, narcotics or drugs that can spoil during shipping would be excluded from the program. And each pharmacy used would be certified by the state and subject to the same inspections and regulations used in Illinois, Blagojevich said.
Eventually, the governor hopes to encourage state employees and retirees to use the system by offering to waive their insurance copay, Blagojevich spokeswoman Abby Ottenhoff said.
"We can't keep asking the 500,000 senior citizens who live in Illinois and lack prescription drug coverage to keep deciding, 'Do I pay for my medicine or do I pay for my groceries?'" Blagojevich said. "These are real choices people have to make every single day."
The problem here is that prescription drugs from Canada are a different animal than say, foreign steel or farm produce. While in both cases consumers experience a benefit in the form of lower prices in the short term, the long term affects are where they grow apart.
In the case of steel or agriculture "dumping" (the latter of which the U.S. has a reputation for elsewhere), another country is doing either one of two things. For one, they may simply have an advantage in that particular area either due to technology or natural resources. In this situation, it makes economic sense to purchase those goods which would be far more expensive to manufacture here. The second possibility is that through some nationalized policy, another country is subsidizing the production of a product or good and therefore is able to sell it for less here. Here, that country has chosen to give consumers in the U.S. a gift at the expense of their economy and their taxpayers. Doesn't make a lot of sense for them, but who are we to argue?
The difference with drugs is that the bulk of them are not foreign goods. These are products that U.S. firms have manufactured, then sent to another country. At that point, the other country (Canada, for instance) passes a law which basically says, "Lower your prices or we'll start making generic copies of all of your products," and extorts a lower price out of American companies. Then, Americans get wind of these lower prices and say, "Gee, Canadians get all the advantages of socialism, why can't we? What's the harm?" and begin chartering buses and hopping online to buy their drugs.
Again, the short-term consequence will be the same, which is why politicians are so into the idea - they generally love short-term "fixes." Over the long-term, though, such actions will take their toll on U.S. companies employing U.S. workers to create innovations that are first available in the U.S.
A better action aould be to push other countries to stop taking advantage of our technology through "pirate legislation" like that in Canada. Maybe then those countries can begin creating their own pharmaceuticals and international price competition can be restored.
[Don Babwin, "Ill. Gov. Unveils Online Pharmacy Network," Associated Press, The Wichita Eagle, 17 August 2004.]
Illinois will join the ranks of northern states actively facilitating prescription drug reimportation under a new plan unveiled today. Will the federal government step in? Will U.S. drug comapnies further restrict supplies to Canada? Will other states follow suit? There's only one way to find out, Illinois Governor Rod Blagojevich has apparently decided:
Ignoring a federal ban on prescription drug imports, Illinois' governor announced Tuesday that the state would have an online clearinghouse running within a month to help residents purchase drugs from Canada, Ireland and the United Kingdom.
The state won't import the drugs itself, but plans to contract with a Canadian company to connect state residents with foreign pharmacies that have been approved by state health inspectors.
"We have taken every possible step we could think of to convince the FDA, and convince the Congress, and anyone and everyone who will listen, that people across Illinois, and across our country, deserve access to safe and lower cost prescription drugs," Gov. Rod Blagojevich said. "The federal government has failed to act. So it's time that we do."
Prescription drugs are often cheaper in Canada and other countries because of government price controls. The Food and Drug Administration opposes allowing prescription drug imports because it says it cannot guarantee the drugs' safety.
Federal officials earlier rejected an Illinois request to set up a pilot program to buy drugs from Canada. The governor's new plan would be an "aggressive expansion," said William Hubbard, FDA associate commissioner for policy and planning.
"The drugs that would be accessed from this program would be illegal and we would have serious concerns because the drugs wouldn't be regulated by an American health authority," Hubbard said.
Blagojevich has said safeguards could be built in to any program, including limiting the imports to only refills of already approved prescriptions.
The savings would be high, he said. A study Blagojevich commissioned last year found Illinois would save $91 million if state employees and retirees bought drugs from Canada. If all Illinois residents used the program, the first year of saving could reach $1.9 billion, he said.
By also tapping into pharmacies in Europe, the proposed network would go beyond those in Minnesota and Wisconsin, where Web sites help residents buy prescription drugs from Canada.
Generic drugs, narcotics or drugs that can spoil during shipping would be excluded from the program. And each pharmacy used would be certified by the state and subject to the same inspections and regulations used in Illinois, Blagojevich said.
Eventually, the governor hopes to encourage state employees and retirees to use the system by offering to waive their insurance copay, Blagojevich spokeswoman Abby Ottenhoff said.
"We can't keep asking the 500,000 senior citizens who live in Illinois and lack prescription drug coverage to keep deciding, 'Do I pay for my medicine or do I pay for my groceries?'" Blagojevich said. "These are real choices people have to make every single day."
The problem here is that prescription drugs from Canada are a different animal than say, foreign steel or farm produce. While in both cases consumers experience a benefit in the form of lower prices in the short term, the long term affects are where they grow apart.
In the case of steel or agriculture "dumping" (the latter of which the U.S. has a reputation for elsewhere), another country is doing either one of two things. For one, they may simply have an advantage in that particular area either due to technology or natural resources. In this situation, it makes economic sense to purchase those goods which would be far more expensive to manufacture here. The second possibility is that through some nationalized policy, another country is subsidizing the production of a product or good and therefore is able to sell it for less here. Here, that country has chosen to give consumers in the U.S. a gift at the expense of their economy and their taxpayers. Doesn't make a lot of sense for them, but who are we to argue?
The difference with drugs is that the bulk of them are not foreign goods. These are products that U.S. firms have manufactured, then sent to another country. At that point, the other country (Canada, for instance) passes a law which basically says, "Lower your prices or we'll start making generic copies of all of your products," and extorts a lower price out of American companies. Then, Americans get wind of these lower prices and say, "Gee, Canadians get all the advantages of socialism, why can't we? What's the harm?" and begin chartering buses and hopping online to buy their drugs.
Again, the short-term consequence will be the same, which is why politicians are so into the idea - they generally love short-term "fixes." Over the long-term, though, such actions will take their toll on U.S. companies employing U.S. workers to create innovations that are first available in the U.S.
A better action aould be to push other countries to stop taking advantage of our technology through "pirate legislation" like that in Canada. Maybe then those countries can begin creating their own pharmaceuticals and international price competition can be restored.
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