The Pharmaceutical Research and Manufacturers of America (PRMA) recently ran full-page newspaper advertisements in Mississippi and other states urging voters to lobby members of Congress to oppose amendments passed by the House and Senate that would allow the importation of prescription drugs from foreign countries.
PRMA says allowing the importation of drugs would cause serious safety questions. But others say that drug companies sell drugs cheaply to other countries like Mexico while overcharging U.S. residents.
“There is a tremendous disparity between what manufacturers charge for their drugs in other countries, and what they charge in this country,” says William “Buck” Stevens, executive director of the Mississippi State Board of Pharmacy. “There is also a great disparity between what they charge some entities compared to the general public. Because there is a tremendous difference, people who are concerned especially about what senior citizens in rural counties have to pay have come up with ways to try to deal with that disparity.”
Stevens said if the pharmaceutical industry really has the concern voiced for patients in the advertisement, then the industry should be looking at a way to lessen the price disparity between what U.S. customers are charged compared to rates in foreign countries.
“I believe, along with many others, that it is unconscionable that a senior citizen Medicare recipient in Mississippi pays the highest cost for drugs in the world,” Stevens said.
“The people who can least afford the high prices are the ones who have to pay them. That is an unfair system, and it needs to be corrected. I would challenge the manufacturers to address that instead of trying to protect their profit centers by opposing importing drugs from other countries.”
Health insurance providers and hospitals are able to make arrangements for reduced rates from drug companies. However, Medicaid doesn’t pay for prescriptions except in the hospital. So, Medicaid recipients without other coverage have to pay for their drugs themselves, and at higher rates than other consumers pay.
Stevens said the drug system in America is broken and in desperate need of repair. He feels it is very unfair for a drug company to sell a drug for one-twentieth of the cost to a hospital that it charges citizens in rural Mississippi who may have an income as low as $350 per month.
“Something will be done to cure that because it is just wrong,” Stevens said. “You can talk about volume purchases, but you can’t come up with that kind of difference in price. The people who buy drugs with their own money have been subsidizing everyone else in the world including hospitals, big corporations and other parts of the health-buying public. I am in favor of almost any legislation as long as we can build in the types of protections we need that will reduce the burden on citizens of Mississippi for the high cost of their prescriptions.”
Stevens said this is a problem that can be cured, and the manufacturers could do it on their own. “We ask them to do it because free enterprise works better than a government program,” he said. “If they choose not to cure it on their own, we are left with no alternative but to pass laws to make it happen.”
PRMA spokesman Jeff Trewhitt said the recent amendments passed by the U.S. House and Senate gut safety protections under a 13-year-old federal law called the Prescription Drug Marketing Act of 1988.
“That law put in place a prohibition against the importation and reimportation of prescription drugs from foreign countries,” Trewhitt said. “That law was passed by an overwhelming majority of both chambers. They realized that counterfeit medicines were a real problem coming into this country, and that there are serious safety questions about medicines in other countries and whether or not they are transported and stored property at the right temperatures. If they are not transported and stored at the right temperatures, they lose their value.”
The amendments passed by the House and Senate differ, so the matter is now being considered by a conference committee. Trewhitt said the amendment in the Senate is more palatable because there is a provision that says the importation and reimportation of medicines from other countries will be allowed only if the Secretary of Health and Human Services certifies there is no risk to patient health and safety. But Trewhitt said even the Senate amendment is a modification of safety standards.
“It is the wrong way to try to improve drug access,” he said. “Basically what you are doing is compromising patient safety in an effort to improve drug access. It is like playing Russian roulette. In this time of easy Internet pharmacy sales, this is not the time to be relaxing safety protections.”
PRMA agrees there is a drug access problem, but says that should be solved by expanding drug coverage to Medicare recipients outside of the hospital.
“We are not the culprit,” Trewhitt said. “Medicare is. Medicare doesn’t cover medicines outside the hospital, and it should. Medicines are increasingly the treatment of choice and there should be a coverage under Medicare outside of the hospital. Not only is that better from the standpoint of care for patients, but there is strong evidence that the Medicare system in the long run would save money. Medicines are generally cheaper than surgery.”
He said the average heart disease drug costs $1,200 per year compared to coronary bypass surgery, which costs an average of $42,000. Medicare is going to cover the $42,000 heart operation, but not the $1,200 drug. Another example given is that Medicare will pay for $28,000 for an ulcer operation covered by Medicare, but doesn’t cover $900 per year for anti-ulcer medications.
Trewhitt said it is not just a matter of cost effectiveness and saving money, but that also medicines tend to be less debilitating and less invasive than surgery and hospitalization.
“Increasingly over the past 10 to 15 years, patients have been sustained on medicine and avoided hospitalization,” he said.
Are drug prices too high? Trewhitt said the prices reflect the high and rapidly growing cost of pharmaceutical research and development.
The average cost of developing new medicines has gone from $2 billion to $26.1 billion this year.
“Even when medicine is approved, only three out of 10 will get a return on investment beyond the cost of research,” Trewhitt said.
Trewhitt said drug companies sell their products cheaper in Mexico because it is a developing country. He said most industries sell for less in Mexico because of the much lower per capita incomes.
“If we tried to sell for American prices in Mexico, no one could afford the medicines,” he said. In the case of Canada and some countries of Western Europe, there are to varying degrees government-mandated price controls that establish arbitrary cutoff points on price that don’t take into account that we are spending an average of $500 million to research and develop one drug. Canada has some of the toughest pharmaceutical controls in world, so there are no major pharmaceutical research and development firms in Canada.
“In contrast, the U.S. research industry is the most innovative pharmaceutical industry in world, responsible for up to half of the major, new medicines introduced in the world each year. In point of fact, it takes all of the nations of Europe combined with Japan to reach the level of innovation you find in the U.S. industry alone.”
Trewhitt said that 35% of senior citizens in the U.S., about 13 million people, have no third-party drug coverage at all. Many of those people are retired and living on low incomes.
are paying completely out of pocket themselves, and ye
s, Congress should do something about it,” he said.
Contact MBJ staff writer Becky Gil