HHS Importing Prescription Drug Task Force: Little Overall Savings

December 22, 2004 (PLANSPONSOR.com) - A government task force studying prescription drug importation has concluded that a system of bringing in lower-cost drugs from Canada and other places would be costly and provide little overall savings to the average consumer.

The task force, consisting of 12 officials from the Health and Human Services (HHS) Department and Customs and Border Protection, was created by provisions in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 that asked HHS to look into the feasibility of an imported drug regime.

Concerns in the report focused around both safety and cost. The report concluded that traveling to Canada to gain access to cheaper prescription drugs would be safe, but importation through other countries with poor regulatory systems, as well as through bogus Internet sites, could raise safety concerns.

“It would be extraordinarily difficult and costly for ‘personal’ importation to be implemented in a way that ensures the safety and effectiveness of the imported drugs,” the report concluded, adding: “ While wholesalers and pharmacists purchase, transport, and dispense imported drugs within our regulatory framework, American consumers making individual purchases from foreign sources outside our regulatory system, in particular those making long distance purchases from Internet sites or by fax or phone, face safety hazards that would be extraordinarily difficult to effectively address and prevent.”

Actual savings from such legalized programs were also questioned in the report. “Overall national savings from legalized commercial importation will likely be a small percentage of total drug spending and developing and implementing such a program would incur significant costs and require significant additional authorities,” the report concluded, without actually naming a specific dollar figure for such development and implementation.

The report also questioned the conventional wisdom regarding the savings for individual consumers. “The public expectation that most imported drugs are less expensive than American drugs is not generally true,” the task force concluded

Concerns were also raised over effects on research and development at drug firms who would see a fall in profit, as well as over intellectual property rights violations.

In a cover letter to US House of Representatives Speaker Dennis Hastert (R.-Illinois) and US Senate President Bill Frist (R.-Tennessee), HHS Secretary Tommy Thompson and Commerce Secretary Donald Evans said that importing drugs from Canada was the only possible scenario that should be looked at. The letter informed the two legislators that only commercial importation from licensed foreign wholesalers should be looked at, and personal importation through the mail should be excluded. If certain safety restrictions were not met, the letter said, the President’s advisors would recommend that he veto any bill that included drug importation.

Multiple states have already implemented programs to import prescription drugs from both Canada and overseas countries. Vermont has gone as far as to launch a lawsuit against the FDA in order to legally provide such a program to its residents.

The report is available here .