Thursday, March 05, 2009

Surprise! New Importation Bill Introduced

Sometimes, I don’t like being right.

In Tuesday’s post, I highlighted that unsafe drug importation is supported by both President Obama and Governor Sebelius, his latest nominee for Secretary of Health and Human Services.

One day later, Senators Byron Dorgan (D-ND), Olympia Snowe (R-ME), John McCain (R-AZ), and Debbie Stabenow (D-MI) introduced this year's model of the Pharmaceutical Market Access and Drug Safety Act (S.525).Fans of redundancy will recall 2007's S.242.

The festivities included the obligatory misrepresentations and falsehoods about cost savings and safety by the pro-importation lobby.


It’s really a shame that the public perception of pharmaceutical manufacturers is so low that no one recognizes the supply-chain dangers of cross-border importation. As someone who studies drug distribution, I believe that politicians are abdicating their responsibilities and endangering public health by opening up diversion doorways for criminals.


Let me be clear:

  1. Diversion is the sale of a drug outside of the distribution channels for which it was originally intended, as in “made to be sold in Europe but diverted to the U.S.”
  2. Drug diversion is the primary way that counterfeit drugs get into legitimate pharmacies. Just ask the FDA’s Office of Criminal Investigations.
  3. Importation and parallel trade are – by definition – diversion.

Over the years, I’ve given you plenty of examples, such as Diversion from Canada via China, Canadian Dreamin', or even Crazy Talk from John McCain (a co-sponsor of S.525). Now we can get ready for fun headlines in the US such as “30K Fake Drugs Dispensed to Patients.” Wheee!

IMHO, Manufacturers should begin scrutinizing their wholesaler agreements with importation in mind. Trade relations and commercial relations executives should pay particular attention because the legislation explicitly limits the way a manufacturer can structure its U.S. distribution agreements. (Contact me privately for more details.)


Importation will open up new gateways for counterfeits but won’t save us much money because the price differences will be absorbed by the middlemen. See Importation Illusions.

Check out how Senator Dorgan blatantly twists the conclusions of a CBO study. Yesterday’s press release from Senator Dorgan’s office states:

"The Congressional Budget Office estimates the bill would save American consumers $50 billion over the next decade, including more than $10 billion in federal government savings.”

Alas, the press release deliberately omits the CBO’s actual conclusion. If you care, here is the 6-page CBO report: Would Prescription Drug Importation Reduce U.S. Drug Spending?

The very first paragraph states:

“On the basis of its evaluation of recent proposals, the Congressional Budget Office (CBO) has concluded that the reduction in drug spending from importation would be small.”

I hope that the journalists who read this blog are paying attention.

In the meantime, I remain surprised that Senator Dorgan's nose does not appear to have grown.

[Update: See my subsequent post More on Drug Importation Economics for details on two more recent CBO studies.


  1. Easily a sign of the Apocolypse. For the life of me I can not figure what a politician thinks! How can anyone be so needful of votes that they would support this bill. I plan to lobby my senators but knowing them I'm sure they are lined up to support this.


  2. Is there by any chance retained or implied rite of the patient to refuse a diverted drug just as you can refuse a generic equivalent on some plans? If this stuff starts coming across borders I will be the first to exert my refusal to accept diverted medications. No way in Hades am I'm going to allow my daughter to ingest a diverted anti-inflammatory for her juvenile rheumatoid arthritis.

  3. Lol, seriously, lol.

    I have operated under a little too many ACPs whilst performing -internal- audits in either US, Canada, Latin America and/or Europe, for a pharma company to fully understand that big pharma has blood on their hands on this subject.

    I will leave it at that.

  4. Looks like politics as usual. These senators want to use importation as leverage to get big rebates from big pharma for Part D drugs. People remember heparin and that will kill this bill before it becomes law, but not before pharma has to cough up some more $$$$.

  5. Once again this is clearly our really intelligent, caring, selfless politicians looking out for our best interests...(I hope you sense the sarcasm because I'm laying it on pretty thick)

    It's simply all about them and getting votes in the next election. It's a simple formula - Tell the general public they will be able to get cheaper drugs + Drug importation (which the general public knows nothing about) = Votes

  6. Dear Dr. Fein:

    Just wanted to make you aware of PhRMA's statement on the prescription drug importation legislation introduced yesterday.

    PhRMA Statement on Prescription Drug Importation

    Graydon Forrer
    Director, Public Affairs & Communications
    Washington, DC

  7. Adam,
    Afraid your prediction wasn't a flash of Nostradamus. Go to Whitehouse.Gov click on agenda /healthcare and find.....
    "Make Health Insurance Work for People and Businesses -- Not Just Insurance and Drug Companies" & of course.."Lower drug costs by allowing the importation of safe medicines".

    Totally transparent disdain for drug companies and belief in the holy grail of "safe imports".

    Seems stimulus means grow government, bash an industry until stock is worthless and than save them through nationalization.

  8. Not that this changes your argument, but I post this for anyone trying to hunt down the actual cost savings numbers from the CBO report (like I was)... they come not from the 2004 report, but from a 2005 report on S.1392.

  9. You are correct about the CBO report. See my subsequent post More on Drug Importation Economics for details on two more recent CBO studies.

  10. o god make me barf already- name an
    rx drug actually manufactured in the usa- as in not a territory...