DORGAN DRUG IMPORTATION AMENDMENT THREATENS AMERICANS’ HEALTH AND SAFETY; UNDERMINES U.S. R&D AND JOBS, DOMESTIC MANUFACTURERS WARN

USBIC’S Kearns: “The Dorgan measure flunks every common-sense, consumer-safety test conceivable.  It would allow the import of drugs that have never been approved by the FDA or by authorities in their countries of origin. It would allow the import of drugs that may not be the bio-equivalents of their FDA-approved counterparts.  And it would allow the import of drugs that may feature dangerously misleading labels.”

WASHINGTON, December 4 – The 1,900-member U.S. Business and Industry Council today issued a letter to all U.S. Senators stating its opposition to S.AMDT. 2793, the Dorgan Drug Importation amendment. The Council warned that the amendment would harm the health and safety of Americans, handicap a leading industry, inhibit domestic R&D, and cost U.S. jobs – in exchange for minimal savings, which in any case would go to middlemen and not American consumers.

According to Council President Kevin L. Kearns, “The Dorgan measure flunks every common-sense, consumer-safety test conceivable.  It would allow the import of drugs that have never been approved by the FDA or by authorities in their countries of origin. It would allow the import of drugs that may not be the bio-equivalents of their FDA-approved counterparts.  And it would allow the import of drugs that may feature dangerously misleading labels.”

Kearns continued, “The Dorgan measure would undermine product safety and stifle U.S. pharmaceutical innovation and competitiveness without significantly reducing drug costs.  The reason?  As explained by studies from the London School of Economics and the U.S. Department of Health and Human Services, the vast bulk of the savings generated go not to consumers, but to a variety of middlemen, ranging from wholesalers to re-sellers to insurance companies to HMOs.  Indeed, European countries that allow drug importation practices have experienced exactly these results.  Moreover, as a 2005 CBO study argues, savings would be negligible for our country’s enormous federal health care programs because these programs already pay substantially discounted prices for drugs.”

The text of the Council’s letter follows:
December 4, 2009
Dear Senator:

On behalf of the 1,900 member companies of the U.S. Business and Industry Council, I write respectfully to urge you to oppose S.AMDT. 2793, the Dorgan prescription drug importation bill.  

This legislation offers a seductive but dangerously false panacea to a health-care cost issue. Its provisions would seriously endanger the American people’s health and safety, and undermine the costly research and development endeavors urgently needed to produce new life-saving medicines.  It would likely curtail investment in one of America’s leading industries and place thousands of good jobs at risk.  In exchange, the bill offers at best marginal cost savings for consumers. In short, this bill would do significant harm in exchange for very minor, if any, good.

At a time of major public fears about the safety and quality of products made abroad, the Dorgan legislation would expose the public to a wide range of foreign drugs whose manufacture and handling has only been sporadically supervised or inspected by the U.S. Food and Drug Administration – or even other reliable foreign drug regulatory agencies.

The Dorgan measure flunks every common-sense, consumer-safety test conceivable.  It would allow the import of drugs that have never been approved by the FDA or by authorities in their countries of origin. It would allow the import of drugs that may not be the bio-equivalents of their FDA-approved counterparts.  And it would allow the import of drugs that may feature dangerously misleading labels.  

The importation bill fails to require country-of-origin labeling for imported drugs.  It fails to require pharmacies to separate imported drugs from FDA-approved drugs.  And it fails to give patients and consumers any significant legal recourse against parties involved in the production, transport, handling, sale, or administration of foreign drugs that turn out to be unsafe.

Surely these flaws explain why Clinton and Bush HHS Secretaries were unable to certify that previous and similar importation legislation would not impose additional risks to public health and safety.  One can only imagine the reaction of American consumers to illnesses or deaths caused by unsafe foreign drugs. The confidence of American consumers in prescription drugs would be shaken to the core.

The Dorgan bill would also import into the United States the foreign drug price controls that have hampered medical and health care innovation all around the world.  America’s global leadership in medical research largely reflects a system in which markets play the predominant role in setting pharmaceutical prices.  This system has provided the significant funding needed for new drug development and given the American people great medical advances.  The lagging research performance of our foreign competitors largely reflects burdensome government price controls, which sharply curb earnings and thus drug development.  Why import these pricing practices and curtail an innovative American industry, putting thousands of good jobs at risk?  

Finally, the Dorgan measure would not significantly reduce drug costs.  Reliable studies show that the bulk of any savings would go to a variety of middlemen, not consumers.  European countries that allow importation practices have experienced exactly these results. Additionally, savings would be negligible for our enormous federal health care programs, which already receive substantially discounted prices for drugs.

The Dorgan importation bill ignores two classic maxims of medicine and economics:  (1) first, do no harm; and (2) there are no free lunches.  The real price would be paid by American consumers, in the form of the much riskier market for drugs they would face, and in the form of a dramatically slowed pace of medical research.

We respectfully urge you to stand up for consumer safety, for American innovation and competitiveness, and for good American jobs.  Please oppose the Dorgan importation bill.

Sincerely,
Kevin L. Kearns
President

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