News CoverageSacramento Bee
FDA: Drug research at risk
Importing prescriptions from Canada could curtail development of medicines
by Lisa Rapaport
Feb 18, 2004
The U.S. Food and Drug Administration warned Tuesday that city and state efforts to import cheaper drugs from Canada could force pharmaceutical companies to curtail development of new medicines, particularly in California and other regions with robust biotechnology sectors.
During a visit to Sacramento to discourage Canadian prescription purchasing proposals under consideration by elected officials in Los Angeles, San Francisco and the state Legislature, FDA officials said any business sent across the border could dampen medical innovation by depressing revenues of U.S. drug makers.
Price controls in Canada make prescriptions, on average, 40 percent cheaper than they are in American drug stores.
Hoping to save money, California is one of at least 11 states considering bills that would allow government health programs to buy drugs from Canada. States and cities also are considering legislation to facilitate the safe purchase of drugs from Canada for individual consumers.
Though it is illegal, an estimated 1 million consumers buy medicines from Canada, accounting for at least $1 billion in annual prescription sales.
FDA officials took a new tack Tuesday to quiet the budding rebellion from a chorus of consumers, governors and mayors clamoring for the federal government to relax the foreign drug import ban.
In addition to stressing the safety risks of illegal foreign prescription purchases, as regulators have done before, FDA associate commissioner Peter Pitts said the illicit drug deals would "undermine the innovation" that brings the best medicine in the world to market in United States.
"We must keep the pump primed for research and development," Pitts said. "We depend on the cutting-edge medicines produced by the companies that make the investment in science. These companies are in the business of improving health care, but they are also in the business of making profits."
The FDA has an interest in advancing medical research because that, in turn, improves the overall quality of medications available to patients whose safety the government is charged with protecting, Pitts added.
Drug development is big business.
California's roughly 2,500 biomedical firms reported nearly $7.8 billion in global revenues and spent more than $2.1 billion researching new medicines in 2000, the most recent year for which figures are available. The California Healthcare Institute, a trade organization for the biomedical industry, projects that those figures have grown at least 15 percent in each subsequent year.
Drug makers in California also received nearly $2.3 billion in government grants for drug development in 2000, more than the National Institutes of Health awarded in any other state.
Patient advocates complain that the huge government investment in drug research should entitle Americans to cheaper prescriptions. Consumer groups also maintain that drug makers' advertising budgets are at least twice what they spend on research and development.
As long as the United States does not regulate drug prices, patients should have a right to buy medicines from Canada, consumer advocates and a growing number of elected leaders insist.
"You have to question why the FDA is siding with drug makers and pharmacists who have a huge financial interest in keeping drug imports illegal," said Jerry Flannagan with the Foundation for Consumer and Taxpayer Rights.
Campaign contributions have colored the FDA stance on drug imports, Flannagan charged. In the 2002 election cycle, pharmaceutical companies contributed $27 million in individual, PAC and soft money contributions to Congress, according to the Center for Responsive Politics. Republicans got 75 percent of that money.
Drug makers readily concede that U.S. consumers bear the lion's share of the costs for development of new medicines. But David Gollaher, head of the California Healthcare Institute, said opponents of the prescription import ban don't understand the benefits of paying for drug research.
"Canada and Western European countries that regulate drug prices have lost their indigenous pharmaceutical industries," Gollaher said. "In the free market of the United States, where prices are certainly higher, patients are getting access to drugs in human trials faster and seeing the benefits of medical innovation much sooner than patients overseas."
FDA Director Mark McClellan is scheduled to address the government's interest in banning drug imports to preserve innovation during a speech at a biotechnology conference in Southern California on Thursday.
Though Pitts of the FDA met Tuesday with officials in Gov. Arnold Schwarzenegger's administration to discuss the legality of various Canadian import proposals being debated around the state, a spokeswoman for the governor said he had yet to take a position on foreign drug imports.
"The governor is concerned about rising prescription drug costs," spokeswoman Ashley Snee said. "He does want to address this issue in a way that is legal and that will not compromise patient safety."