States see importation as solution to high drug costs

Introduction

Pursuing average savings of 25 percent to 50 percent below U.S. prices, many states have defied the federal government and turned to countries such as Canada for access to affordable prescription drugs for their citizens.

An analysis by the Center for Public Integrity disclosed that 34 states have implemented or considered bills relating to the importation of prescription drugs since 2003.

Almost 100 such bills have been introduced in the last three years in state legislatures, according to tracking by the National Conference of State Legislatures, a bipartisan organization serving state legislators and staffs that advocates state interests before Congress and federal agencies. Those proposals include several resolutions urging Congress and the Bush administration to reconsider the federal stance on importation.

But such state legislative moves are opposed by the pharmaceutical industry and the federal government, both of which claim that there is no way to guarantee that drugs purchased in other countries are as safe as those sold in the United States.

The Food and Drug Administration has said repeatedly that importation would leave the country vulnerable to bioterrorist attacks and other problems due to contaminated drugs, despite studies that have shown that prescription drug regulations in Canada, for one, are at least as stringent as those in the United States.

Meanwhile, pharmaceutical companies also make the vehement argument that when drugs are purchased in Canada and Europe, buyers are importing more than medicine — they’re also importing price controls.

Drug companies have tried to block importation in a variety of ways, including through legal challenges. In some instances, they have helped fund groups that ran anti-importation advertisements.

And as the Center reported in January 2005, the trade group Pharmaceutical Research and Manufacturers of America hired Gordon Giffin, the former U.S. Ambassador to Canada, to lobby in that country. Shortly thereafter, U.S. and Canadian consumer groups criticized the Bush administration once reports emerged that it pressured the Canadian government to crack down on importation.

But despite federal and industry pressure, many states don’t seem deterred.

In October 2004, Illinois launched I-SaveRx, a mail-order program that allows consumers to order three-month supplies of medication from Canada, the United Kingdom and Ireland. Wisconsin, Kansas, Vermont and Missouri have joined, with supporters claiming that it provides consumers safe and affordable drugs “without taking a trip across the border.” Several other states, including Pennsylvania, Minnesota, Virginia and Tennessee, also have introduced bills proposing that they join the program.

Vermont also has been vigorously pursuing an importation program. In 2004, the state legislature passed a law establishing a program that would detail how Vermont residents could purchase prescription drugs from participating Canadian pharmacies, including information on mail-order service. The law also requires insurance plans to provide coverage for drugs purchased in Canada and imported legally to the United States.

That same year, Vermont sued the Bush administration in U.S. District Court for not authorizing the state’s importation program. The plan would have allowed nearly 20,000 state employees and their families to purchase prescription drugs from Canada.

Chief Judge William K. Sessions III dismissed the lawsuit, finding the federal government violated no laws in refusing to accept the program, which itself is illegal according to the accepted interpretation of federal statutes.

However, Sessions also acknowledged that the administration’s stance caused Vermonters to “dig much deeper [than their nearby Canadian neighbors] if they need to purchase the same drug.”

In another setback, in August 2005 a federal judge in Minnesota dismissed claims that several prescription drug giants violated antitrust laws by taking steps to block the importation of prescription drugs from Canada. The judge ruled that the importation of drugs violated federal regulations and that therefore the companies’ efforts to prevent importation were not anticompetitive or in violation of federal antitrust laws.