Where does drug importation stand now?

March 18, 2005

Despite renewed safety concerns, proponents press their case—on Capitol Hill and in the statehouses.

Once the Medicare drug benefit takes effect in 2006, it's possible that access to affordable prescription drugs may be less of a problem for the nation's seniors. But right now, nearly three out of four Americans say they'd like the federal government to relax its restrictions on importing prescription drugs from Canada, according to a Harvard/ Kaiser Family Foundation poll released in January.

But President Bush refuses to be stampeded. Citing drug safety concerns, he's argued repeatedly for a "go-slow approach" until the government "can adequately protect . . . consumers." In late December, the Department of Health and Human Services' Task Force on Drug Importation echoed his concerns, noting that it would be hard and costly to ensure the safety of imported drugs.

Despite this, Senate proponents like Democrat Byron L. Dorgan of North Dakota and Republican Olympia J. Snowe of Maine are fighting on. This session, they've introduced legislation that would make importing drugs from Canada legal.

Meanwhile, political pressure is building in Canada-and on Canada from the US-to limit or cut off the flow of cheaper prescription drugs to this country.

Doctors remain divided on the issue. At its interim meeting in December, the AMA modified its longstanding opposition to drug importation and issued a qualified endorsement, providing certain safety measures are put in place. Among other things, the AMA called on Congress to grant whatever additional authority and resources the FDA needs "to ensure the authenticity and integrity of imported prescription drugs." At least one state medical society has gone further, supporting state lawmakers in their efforts to make Canadian and other prescription drugs accessible immediately, despite federal restrictions.

We examined why the importation issue won't go away-and what Washington and the states are likely to do about it in the year ahead.

Legitimate concerns or scare tactics? Although the growth in prescription drug spending slowed in 2003, it still grew at 10.7 percent, according to a report released in January by the Centers for Medicare & Medicaid Services. (Overall healthcare spending rose 7.7 percent or $1.7 trillion.) This continued rise in drug spending, brought on by higher prices for many prescription drugs, prompts many Americans to look for cheaper alternatives in a number of foreign countries, including ones like Canada that impose drug price controls.

Citing IMS Health, a well-known international data source, the HHS Task Force on Drug Importation says that, in 2003, sales of prescription drugs from Canada to the US totaled $695 million in US dollars. Approximately $408 million of this amount was from Internet pharmacy sales; the remaining $287 million was from what the task force calls "foot traffic sales"-that is, purchases by Americans in Canada. The task force estimates that an "equivalent amount of prescription drugs" is now coming in from the rest of the world, "mostly through the mail and courier services."

Critics of these alternative sources-including the Bush administration-say they carry potential safety risks. The task force report concludes that while some means of drug importation may be relatively safe in specific instances (such as traveling to Canada for widely available brand name drugs), "many transactions are occurring via poorly regulated and occasionally bogus Internet operations that have been documented in some cases to provide consumers with inferior products that are not the same as the US-approved versions."

For this reason, says the report, "any legislation to permit the importation of foreign drugs" must be crafted in a way to ensure that drugs coming into the US are as safe as those sold here. Such a program is likely to "incur significant costs"-and yield only modest savings over time in total drug spending.