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Drug Firms Decry Imports’ Safety, Costs

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Times Staff Writer

Manufacturers and distributors of prescription drugs argued strongly Monday against legalizing the importation of medications from other countries, telling a federal task force that such a system would be neither safe nor cost-effective.

The millions of Americans who now buy their prescription drugs from Canada at a cost savings of as much as 70% “assume an incredible risk,” S. Lawrence Kocot, senior vice president and general counsel of the National Assn. of Chain Drug Stores Inc., told the panel.

Other drug distributors and manufacturers emphasized the growing problem of drug counterfeiting, saying that the cost of testing lower-price imported drugs for safety would negate any savings for consumers.

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The industry presented its well-known opposition to drug importation at the second meeting of a task force created by Health and Human Services Secretary Tommy G. Thompson to comply with a requirement of the new Medicare law.

At the panel’s first meeting, consumer advocates focused on the high cost of prescription drugs in the U.S., saying that tens of thousands of Americans died each year because they could not afford needed medications.

In contrast, drug industry executives stressed the potential cost of expanding the Food and Drug Administration’s safety regulations to include imported prescription drugs. While the executives could not predict how much such a system would cost or say how much their companies had spent to combat counterfeiting and other security problems, they said a legal market for imported drugs would further cut into their profits, slow the development of new drugs and weaken the nation’s free-market system.

Having heard from invited representatives of consumer groups and the industry, the task force will hold a daylong hearing next week that will be open to speakers from the general public. The Medicare law requires Thompson to make recommendations to Congress by Dec. 1, but the secretary has said he hoped the panel would complete its work by midsummer.

The urgency of the panel’s work reflects the growing potency of drug prices as an election-year campaign issue, especially for older Americans, who tend to vote in higher numbers than other age groups.

President Bush and members of his administration have adamantly opposed drug re-importation, so called because it involves the resale of drugs made in the United States but obtained from suppliers in other countries, especially Canada.

They have argued that there is no way to certify the safety of drugs bought over the Internet or in Canada.

The government has largely turned a blind eye to such drug purchases by individuals. But the FDA -- under both former commissioner Mark B. McClellan and acting commissioner Lester M. Crawford -- has threatened to take legal action against the mayors and governors who have set up importation programs. McClellan, who now is administrator of the Centers for Medicare and Medicaid Services, and Crawford, his successor at the FDA, are members of the drug importation task force.

Three U.S. drug manufacturers, Pfizer, Eli Lilly and Astra Zeneca, have reacted to the growing importation trend by limiting, or threatening to limit, the supply of their products to Canadian pharmacies and wholesalers.

Much of Monday’s session focused on the industry’s efforts to control drug counterfeiting, which the executives described as a growing problem involving organized crime syndicates and some terrorist organizations. Last year, Pfizer was forced to recall more than 18 million tablets of Lipitor to winnow out suspected counterfeits.

Although technologies to track and trace individual pill bottles from manufacturer to patient are in development, Ortho Biotech executive John Dempsey said the widespread application of most anti-counterfeiting systems is “at least five years away, maybe 10.”

Mike O'Grady, an HHS assistant secretary and task force member, told the executives he was “not so sure consumers are really aware of

Surgeon Gen. Richard H. Carmona, chairman of the task force, ended Monday’s meeting by asking the executives if it was “reasonable to think there could ever be a cost-effective importation system where we could guarantee safety to the American public.” With his counterparts nodding their heads in agreement, Dempsey said, “I don’t know how we could do it.”


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