TCS Daily

Sacrificing the Grandkids for Grandma

By Gilbert Ross - March 17, 2004 12:00 AM

"I cannot explain to my mother any longer why she should pay twice or two-thirds more than what is paid in Canada and Mexico. I'm switching my position."
-- United States Senator Trent Lott (R-Miss.), March 11th, 2004.

Dear Sen. Lott:

It pains me to hear that your concern for your aged mom has caused some confusion on your part about the risks and benefits of importing drugs from Canada and elsewhere. You suggest that your inability to explain your earlier position to your aged mother is justification for your change in position

Let me share with you some ideas that may help you explain this to your mother, whom I trust is truly benefiting from products developed as a result of our free-market-based pharmaceutical industry.

You have previously been known as an ardent supporter of free-market enterprise. Now it seems as though you have joined the list of populist officials seeking to justify the importation of drugs from Canada, where even American-made pharmaceuticals are subject to price controls.

By way of explaining your flip-flop on this issue, you have used your aged mom as an excuse to take aim at the new, favorite punching bag of politicians seeking to curry favor with the electorate: the pharmaceutical industry. You allege that you are confused over how to explain to mom that she has to pay more than Canadians and Mexicans for her drug therapy. Allow me to help you explain the situation to her:

From a purely short-term, fiscal point of view, importing cheaper drugs might seem to make sense -- and, it goes without saying, such a policy would reap political dividends in an election year. This has been emphasized by the apparent caving in of Senate majority leader Frist, who has agreed to put the subject up for Senate discussion in order to free outgoing FDA Commissioner McClellan's nomination as Medicare czar from being held hostage by importation advocates. Dr. McClellan, while heading the FDA, had been firm in his opposition to drug importation, based upon the issue of the possible lack of safety of imported foreign drugs, which have been shown to often be of uncertain origin.

But in the long run re-importation will squelch drug innovation and have devastating consequences for the future availability of life-saving pharmaceuticals. The high price of many drugs is a serious problem -- especially for the elderly and others on fixed incomes. But it's beneath you, as a Senator, to beat up on the pharmaceutical companies for the price of prescriptions. Why do I say this?

First of all, Canada and many of the other countries under discussion have socialized medicine, and government-imposed price controls on drug prices. But since developing, testing, making, and marketing drugs doesn't become any cheaper just because these governments keep prices artificially low, the U.S. pharmaceutical industry has forced the U.S. drug purchaser to subsidize foreign markets, so that the drug companies can continue to do business beyond our borders. In plain American, the U.S. consumer pays more so that Canadians and Swedes pay less.

Second, our pharmaceutical industry sinks billions of dollars annually into developing innovative, beneficial drugs, which extend and enhance our lives (and the lives of Canadians, as well as millions of others around the world) in many ways. Those billions are required for research, which involves exceedingly high costs, because the FDA is the most demanding regulatory body on earth. Consequently, American-made drugs are the safest on earth.

Compare the American pharmaceutical output with all the important new drugs produced by the Canadian, Swedish, and Japanese pharmaceutical industries in the past few decades. If you're having trouble remembering the names of these drugs, you are forgiven: The U.S. pharmaceutical industry produces well over half of the world's innovative drug output. Those of us of a certain age may remember the olden days, when even Canada had a vibrant pharmaceutical research and development industry -- before government price controls forced them to close their facilities, or to move here.

Senator Lott, if your new position represents the sentiment of our public sector decision-makers to import foreign drugs to save a few bucks, the cash flow behind the discovery and development of innovative drugs will dramatically slow. Already, stories have appeared noting the sorry state of the pharmaceutical industry's new drug pipelines and the effect they have had on bottom lines. Jobs are now being lost among drug companies which had not experienced job insecurity in recent memory.

If this trend continues, the 2014 pharmacopoeia will resemble the 2004 drug list, as our waves of pharmaceutical innovation dry up. If Congress had enacted similar proposals decades ago, many of us wouldn't be around today. Our children, and their children, should be allowed to reap the benefits of the amazing improvement in public health we baby-boomers have experienced, which will continue so long as there are sufficient financial resources. We should not let a shortsighted view of drug pricing force us into competition with our children, and grandchildren, in the arena of public-health policy. We should not be mortgaging the future health of our society for transient, politically-motivated benefits.

One way to reduce drug costs: the onerous FDA drug-approval process must be streamlined. The multi-million dollar, multi-year investment required to produce innovative drugs should be slashed, benefiting everyone. But undercutting the American pharmaceutical industry with cheap imports will only kill our golden goose.

Senator Lott, with all due respect, you can perhaps now explain this to your mother -- but you should be more troubled with how you will explain your new position to your grandchildren.

Dr. Gilbert Ross is medical and executive director of the American Council on Science and Health, a consumer-education and public-health advocacy group advised by 400 scientists and policy experts.


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