Bias Apparent in AARP Drug Importation Briefing

Published June 22, 2005

(June 22, 2005 — Chicago, IL) Earlier today, the AARP Global Aging Program sponsored a briefing at DC’s National Press Club, titled, “Pharmaceutial Importation: Can it Help America’s Seniors?”

The program of nearly a dozen speakers includes not even one who might express concerns about the effect of drug importation on the safety and quality of the U.S. prescription drug supply.

The Heartland Institute, an independent nonprofit research organization based in Chicago, offers the following resources to reporters covering the issue and interested in a more complete picture of the implications of drug importation:

  • A statement by Joseph Bast, president of The Heartland Institute, which appears at the end of this media advisory. In October 2003, Bast hosted a Chicago conference addressing the topic, “What’s Wrong with Importing Drugs from Canada?”
  • The following experts on drug importation may be willing to provide background information on the subject to reporters:
  • John Graham, director of health policy studies, Pacific Research Institute, [email protected], 415/989-0833
  • Peter Pitts, former FDA commissioner and now senior fellow in health care studies, Pacific Research Institute, [email protected], 212/468-3418, cell 917/279-0938
  • Stephen Entin, president, Institute for Research on the Economics of Taxation, [email protected], 202/463-1400
  • John Goodman, president, National Center for Policy Analysis, [email protected], 800/859-1154
  • Devon Herrick, senior fellow, National Center for Policy Analysis, [email protected], 800/859-1154

The following statement on the subject of drug importation can be attributed to Joseph Bast, president of The Heartland Institute and coauthor of Why We Spend Too Much on Health Care (1993):

AARP and others believe prescription drug importation can supply the country with safe and affordable drugs, while ending what they perceive to be an “unfair” pricing system. They believe drug companies stand in the way of a positive change in public policy in order to protect their profits. They are wrong on all counts.

(1) Importing drugs from foreign countries, including Canada, would severely compromise the safety and quality of the U.S. prescription drug supply. Imports of drugs into Canada from Brazil, Bangladesh, China, South Africa, and even Saudi Arabia and Iran have all increased dramatically in the past years.

(2) Importation leads to social injustice. Wealthy people will continue to buy their drugs from U.S. pharmacies and poor people will buy their drugs from Canada. The result is a two-tier system of drug quality in the U.S., one for those who can afford to pay for American-made drugs, and one for those who must put their lives at risk by buying drugs from foreign pharmacies.

(3) Any savings achieved through importation would be short-term. Drug companies are entirely within their rights to restrict exports to countries that impose price controls and then fail to honor restrictions on reimportation. Supplies will dry up in the exporting countries–as is already occurring in Canada–causing product shortages, higher prices, and increased reliance on imports from other countries.

(4) Current drug pricing is reasonably fair. The fact that not everyone pays the same price for prescription drugs is not “unfair.” It’s the way the world works … for every product, including food, clothing, and shelter.

(5) Drug companies are not making “excessive” profits. The industry’s median profit of 18 percent in 2001 was less than Coca-Cola (20 percent), Mellon Financial (33 percent), Microsoft (29 percent), and Oracle (24 percent), and not much more than the profits of the publishers of newspapers that routinely attack the industry, such as Gannett (publisher of USA Today–13 percent) and Knight-Ridder (15 percent).

(6) Importation reduces investment in discovering and testing new drugs. Drug companies invest about 17 percent of sales in research and development, well above the 3.9 percent average for all industries. Drug companies spend an average of $800 million to bring a new drug to market. Importation means cutting off the stream of investment that makes this system sustainable. It means fewer new lifesaving drugs.

(7) There are alternatives to importation. If the goal is lower prices, a shorter route to get there is to streamline the approval process for new and generic drugs and limit lawsuit abuse, thereby lowering drug costs. Consumers who call three pharmacies and compare their prices before buying a prescription can often save as much or more as they would by going online, without the safety risks. Most major drug companies offer significant discounts on their drugs to low-income consumers.

Joseph L. Bast ([email protected]) is president of The Heartland Institute, a national nonprofit organization based in Chicago. Founded in 1984, Heartland’s goal is to help build social movements in support of ideas that empower people. Among other publications, Heartland publishes Health Care News, a monthly publication on health care policy. Heartland is supported by approximately 1,500 donors and members. For more information, call Ralph Conner, Public Affairs Director, 312/377-4000, or email him at [email protected].