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More states defy FDA warnings on re-imports

Published on 15/01/04 at 10:46am

A number of states and cities are drawing up plans to import medicines from Canada in open defiance of the FDA and federal law.

The city of Boston and the states of New Hampshire and Virginia are the latest to announce their intention to import cheaper prescription drugs from Canada in order to cut cost in their increasingly under-pressure healthcare budgets.

The new initiatives come despite the passing of a bill in December to include prescription drug costs in the national Medicare insurance scheme for the first time, a move which many, including the pharma industry, hoped would meet the demand for cheaper prescriptions.

In August last year the City of Springfield, Illinois became the first authority to set up a public programme to import cheaper prescription drugs from Canada despite warnings that the safety of the medicines could not be guaranteed, and that it was illegal under federal law.

Since then, only a handful of authorities have signalled their willingness to follow Springfield's lead, but the rebels remain undeterred by a clause in the new Medicare bill re-enforcing the ban on such imports.

Virginian delegate Richard Black says he intends to introduce legislation allowing the imports for the state-sponsored medical programmes, estimating savings of $90 million a year.

Mr Black called US prescription drug prices "outrageous," adding that the country was "subsidising the entire world on the backs of the senior citizens of America." Meanwhile the city of Boston is planning to launch a scheme in July offering Canadian-sourced drugs to 7,000 of its 15,000 current and retired employees, saving it an estimated $1 million from its $61 million annual drug budget.

The FDA and stakeholders including the pharmaceutical industry body PhRMA continue to stress the safety risks of the practice. The FDA recently stepped up its public campaign against the imports, including a number of print adverts and consumer-focused articles.

Despite this, some surveys show two-thirds of US citizens support re-importation, and the practice of organised coach trips across the boarder to buy cheaper drugs in person is now well established in northern states.

In all, 13 states and four cities have at least investigated the potential of re-importation, a number of them currently assessing whether the strategy would actually yield significant cost savings.

Analysts at Deutsche Bank say that in revenue terms at least, the much smaller size of the Canadian market will limit the damage re-importation can do to US profits. Canada's far smaller levels of consumption and new tight restrictions on supplies means the volume of drugs available for re-importation is unlikely to be worth more than 1.5% of the US market, or $3 billion.

Cost-cutting initiatives other than re-importation continue to be  a concern for the industry. In Oregon, for instance, a medical body similar to NICE has been established, while in Florida and several other states, "counter-detailing" teams promote generic prescribing to doctors.

PhRMA uses a policy of opposing such new schemes early to avoid their uptake in further states, and is fighting a number of them through the courts.

 

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