Even before the much-hailed (by Senator Max Baucus (D-MT and the Obama Administration) deal with PhRMA, the trade association for the pharmaceutical industry,in the Senate Health Care bill draws its first breath, it is obvious that the savings claimed for Medicare Part D were nothing more than a Magic Lantern Show.
The deal called for pharma to reduce its prices for Seniors in the Doughnut Hole by $80 billion by cutting prices paid by Seniors in half, but with the full price being credited by Administrators towards satisfying the individual Doughnut Hole requirement. The idea was that Seniors would pay less but because of the full credit to satisfying Doughnut Hole requirements, they would move more quickly from the Hole to Catastrophic Coverage.
Never mind that would require that the Government would then have to pay 93 percent of all future drug coverage for the duration of the plan that year, adding untold millions of dollars to the cost of Part D.
As for the claimed savings: After entering into the agreement, pharma began a series of price increases that has prompted an investigation by the U.S. House of Representatives (whose Health Care Reform bill does not include the deal struck by the Obama Administration and the Senate). It is suspected that the price increases not only eliminate the ‘savings’ to Seniors but also will add to the overall Part D costs.
Furthermore, as a part of the quid pro quo for agreeing to the price cuts, phama received pledges that the Senate bill would not include nor would the Administration push for drug price negotiation which would have offered real savings to all Part D enrollees and to the cost of Part D overall.
Also, there was obviously a deal struck that the Administration would not honor its election campaign pledge to support ‘reimportation’ of prescription medicines. And, while the Administration reneged on its pledge to voters, it kept its deal with pharma and PhRMA, the industry trade association, by effectively sabotaging Senator Dorgan in his efforts to make importation a fact.
Ironically., on the surface, this lack of support might actually have the opposite impact of what pharma was hoping for, providing an opportunity for the Obama Administration to keep its pledge to allow all Americans access to safe, affordable medications from licensed, registered phamacies outside the U.S. which are subject to oversight that meets or exceeds those of pharmacies in this country.
The oppportunity is created because, as noted in earlier posts, the vehicle introduced in the Senate by Senator Dorgan was virtually the same legislation that had been introduced in previous sessions of Congress, starting nearly a decade ago, when Canadian-based Internet Mail Order phamacies first began meeting the very real need of America’s Elderly for access to vital medicines at an affordable price.
At that time, the vast majority of the prescriptions was filled by those pharmacies—licensed and registgered in their respective provinces and subject to the oversight of Health Canada, which has proven, exceedingly high standards that meet or exceed those of the FDA.
The language then—and in its most recent incarnation—called for additional oversight by the U.S. Food and Drug Administration, which would be allowed to inspect pharmacies in Canada, to ensure that they met the U.S. standards.
At the time, this was perfectly logical. There were numberous Canadian mail-order pharmacies—some estimate as many as 140—but there were also bogus pharmacies in other countries springing up claiming to be Canadian pharmacies.
The bill, popularly called the Dorgan-Snowe Bill seemed a logical way to ensure safety as millions of Americans, some not familiar with the then relative ease with which a ‘web presence’ could be made to seem to be offering legitimate services.
This was before Medicare Part D. The pharmaceutical industry reacted to the loss of markets as, even without any U.S. interference, increasing numbers of Americans joined the country’s Seniors in ordering an estimated $140 billion in prescription medicines from legitimate Canadian-based pharmacies, by (a) expensive law suits against the mail order pharmacies, using ‘intellectural property rights’ arguments granted by U.S. law that allow the companies to determine where their products can be sold and by whom; (b) working in collusion with the FDA and U.S. Customs to seize vital prescription medicines in spite of U.S. Congressional action calling for an end to such seizures; and (c) using Senate lackies to thwart repeated votes of Congress to provide a domestic structure for oversight (Dorgan-Snowe) to provide a poison pill amendment for ‘certification,’ requiring that the Secretary of Health and Human Services certify that each and every drug from a pharmacy outside the U.S. was ‘safe’, even when the drug itself was manufactured at a plant with oversight and approval of the FDA, ironically an agency under the jurisdiction of the Secretary.
But, the Silver Lining was that was that for the first time ever, Americans were recognizing that the prices they had been paying for their medicines were the highest in the world even though as U.S. taxpayers, they paid for much of the research and development of new medicines which are then licensed for manufacture and sale by pharmaceutical companies—and manufactured not in the U.S. but solely at lower-cost FDA-supervised facilities in other countries only to be brought back into this country.
The result: Pharma claimed the right of ‘reimportation’ for itself, but wanted it denied for personal importation, even through there are specific references that personal importation is allowable in up to 90-day supplies if a drug is unavailable in this country. In light of today’s terrible economy, it is truer today than any time in recent memory that if a drug is unaffordable, it is unavailable.
That was then. This is now. There were many reasons that Dorgan-Snowe would not have worked, and we have outlined them many times before. But this should not be construed as a criticism of personal importation, nor of the commitment of Senator Dorgan and others who, even while not recognizing that many of the assumptions on which the implementation of Dorgan-Snowe was based (financing, sourcing, etc.) made the legislation unworkable, were driven by their desire to bring lower prescription medicine prices to Americans.
While it is time to ‘retire’ the language of past reimportation bills, it is also time to work to establish a policy that will bring to fruition the potential contribution of personal importation to lower prescription medicine prices. This requires that vital prescription drugs from safe, affordable sources, including outside the U.S, are available to and affordable for the largest number possible of U.S. citizens, irrespective of age.
Even with the harassment and collusion of the FDA with pharma, large numbers of Americans regularly turn to safe, affordable mail order sources from outside the U.S. to fufill their prescription drug requirements. Importation—a much more accurate term than ‘reimportation’ is a fact of life in in healthcare for untold numbers of Americans. And, even such a highly conservative source as The American Enterprise Institute has noted, one would have to be ‘an idiot’ to be able not to identify legitimate mail-order pharmacies (including those outside the U.S.) and to order their medicines safely because the 'safety risks' are overstated. (unless the individual was seeking a prescription for a controlled substance or for satisfying some sort of addiction with a source that does not require a prescription from a physician. Significantly, legitimate mail order pharmacies to not deal in controlled substances, nor will they fill an order without a verifiable prescription).
Here then are some steps that the Obama Administration should take to meet its election campaign pledges of support of importation as well as the statement by Obama advisor David Axelrod following the Senate rejection of the Dorgan-Snowe amendment,that the Administration would continue to work to create a role for personal importation in lowering prescription medicine prices:
1. Instruct the Secretary of Health and Human Services to identify those countries that have standards of oversight, efficacy and safety that meet or exceed those in this country. These are commonly referred to as Tier One Countries and include but are not limited to Great Britain, Australia, New Zealand and numerous other European Community countries.
2. Support the Vitter Amendment proposed by Senator David Vitter (R-LA) to prohibit the use of Homeland Security funds for seizures of vital medicines imported into this country for personal use. Expand the restriction to include banning any Federal agency from making such seizures, or if such seizures are made, that the prescriptions be released to the individual making the order upon verification with the individual that the medicine is for personal use.
3. If any seizures are made and not released to the individual making the order, require that tests be done on the unreleased medicine by the agency making the seizure and that the results be available under Freedom of Information (FOI) rights. The FDA has not responded to requests to make the results of such testing, nor even to verify that it does any tests.
4. If any medicine is found to meet the requirements of being imported for personal use and is not for resale, is manufactured at an FDA-inspected facility (irrespective of country of origin) and is identical in ingredients and efficacy to the same drug packaged for direct sale to consumers in the U.S., it shall not be seized because of irrelevant differences in packaging or labels.
5. The Secretary of HHS should be instructed to enter into reciprocal agreements with counterparts in designated countries for the purposes of lowering drug prices, safety and efficacy through personal importation.
6. HHS should provide information on its website and through other informational sources to help U.S. consumers best identify sources for safe, affordable prescription medinces from licensed, registered pharmacies in countries other the the U.S.
7. No individual certification of safety and efficacy should be required from the HHS Secretary. (If such certification is required, the concept should be extended to other Cabinet members—the Secretary of Transporation for the safety of vehicles and accessories; the Secretary of Agriculture for stopping agricultural pollution such as the Dead Zone in the Gulf of Mexico caused by run-off of ag chemicals. Obviously, these requirements are not practical nor needed, but neither is any certification requirement by the HHS Secretary).
8. The inclusion of imported medicines in Part D plans should be the subject of an immediate study. Congressman Dennis Kucinich (D-OH) has proposed such a concept, and the Administration should support such a plan.,
If the President keeps his pledge, steps to lower prescription drug prices in 2010 by promoting importation, will be not only a fact, but might actually be remembered as the most significant element of health care reform, bringing about tremendous savings, all the while protecting and improving the health of untold numbers of Americans, which would undoubtedly help avoid costly health problems in the future.
