Monday, March 09, 2009

More on Drug Importation Economics

Given the heavy site traffic and comments (public and private) about Thursday’s importation posting (Surprise! New Importation Bill Introduced), here are a few more thoughts on the topic along with some totally unrelated Spinal Tap news.

Currency fluctuations can scramble importation economics

Check out the dollar’s volatility over the past six years – a 25 percent decline from 2002 through mid-2008. The trend sharply reversed in August as global investors fled to our (for now) safer currency.

The weak dollar led to a U.S. export boom, although export growth is now slowing as global economies falter and the dollar strengthens.

Will huge U.S. deficits lead to a weaker dollar in the future?
I have no idea, but I don't see how patients benefit from currency-driven drug shortages a la Parallel Trade and UK Drug Shortages.

Just more sand in the vaseline for importation enthusiasts.

More Fun from the CBO

Ooops. I pointed you to the wrong Congressional Budget Office (CBO) analysis in Thursday’s post about importation.

I highlighted this 2004 CBO white paper. But CBO has done at least two more recent reports, although the overall conclusions (limited savings of about 1%) were the same:

Note that CBO 10-year cost savings estimates went down by about $1 billion between 2005 and 2007, presumably due in part to the currency issue.

Thanks to Nick Basta, editor of Pharmaceutical Commerce magazine, for pointing out my oversight.

Manufacturer channel strategies

I got a number of emails regarding my comments about new limitations for U.S. distribution agreements from Pharmaceutical Market Access and Drug Safety Act (S.525).

In 2007, I highlighted one issue with regard to a predecessor bill in Will US logistics deals be illegal? I am also working on some educational materials about the impact of importation on pharmacy economics and the pharmacuetical supply chain. Drop me a line if you want to talk more.


2007’s California pedigree legislation revealed that many Drug Channels readers are also Spinal Tap fans. Check out their current Unwigged and Unplugged tour. I just bought tickets for the May 14 show at the Keswick Theatre!


  1. Adam, as always, you are a sage to the masses! It'll be interesting to see how the importatin bill plays out. More interesting is the import/export information. Thanks for sharing.

    BTW...the Spinal Tap link would not work on my PC. Might just be something my son did to keep me away from tour information.


  2. Thanks, A! Link should be working now.