Drug importation is touted as a way of cutting prices for prescription drugs. But the reality is that importation would result in serious safety problems for patients and consumers, without significant cost savings.
The former commissioners of the Food and Drug Administration have raised concerns about the safety of imported drugs. The United States has what is considered the “gold standard” in terms of protecting its citizens from counterfeit, and other dangerous prescription drugs. Importation schemes would jeopardize that “gold standard.”
Although seen as a panacea to reduce drug costs, groups separate from pharmaceutical manufacturers, such as packagers of prescription drugs, have estimated no cost savings from importation. They express supply shortage concerns in relying on drugs from Canada, in addition to safety concerns. Likewise, the Congressional Budget Office concludes that importation will achieve little savings for consumers.
Price controls on products or services have historically been based on good intentions but with bad results. Price controls initially lower prices followed by shortages, lower quality, less innovation and competition, and even higher prices in some cases.
Price controls often lead to other government controls. Canada sets limits on prescription drug prices, but this also means that the government determines which medicines patients can have and when they can have them. As a result, Canadian patients experience long waits and drug shortages – if the medicine they need is even available in their country. In fact, one third of new biotech products that are available in the U.S. are not even sold in Canada.
Researchers are making advances in prevention, treatment, and cures for disease. However, these discoveries have no meaning to American patients if they cannot be translated into treatments and cures for disease. Price controls will slow and could even halt research progress – making the difference of life and death for many critically ill patients.
American patients are healthier and live longer in part because of innovations in health care made possible by pharmaceutical investment. In the past 20 years, each additional dollar spent on health care services has produced health gains valued at $2.40 to $3.00. This was accompanied by significant health gains such as the fact that annual death and disability rates declined, and a key measure of population health – the number of days in the hospital – declined from 130 to 57 per 100 persons.
Government-imposed price controls destroy incentives for innovation. Even the threat of government-imposed price controls causes investors to direct much needed resources away from pharmaceutical innovation. In the mid-1990s, the growth rate for research and development investment slowed markedly due to discussions about a government-run health care system. This means patients lose new drugs, vaccines, treatments, and cures for disease.
American patients enjoy timely access to the most sophisticated medical innovation in the world. In the four-year period between 1998 and 2002, new pharmaceutical products debuted in the United States at twice the rate of introduction into European countries. On average, American patients have access to new drug therapies four months after a new pharmaceutical product launches. By contrast, European patients wait 7-19 months. This timing is of critical importance to patients with serious illnesses.
