The Search for More Affordable Prescriptions

The Search for More Affordable Prescriptions
By: Congressman Joe Barton

January 7, 2005

Prescription drugs are a critical component of our nation's health care. From treating a minor ailment to alleviating a chronic disorder, Americans have come to rely upon the effectiveness of prescribed drugs to keep us healthy. In recent months, the topic of prescription drug importation has gained increased attention as a growing number of Americans seek to save money by obtaining drugs from other countries. The rising popularity of online shopping has provided consumers with a direct source of discounted drugs from other countries. In 2003, consumers spent more than $1 billion on prescription drugs imported from Canada, twice as much as was spent in 2002.

Current law allows pharmacists to import drugs from Canada upon certification by the Secretary of Health and Human Services that the drugs would "pose no additional risk to the public's health and safety." So far, no secretary has been able to provide this certification due to the risky nature of imported drugs. Health Canada, the department of the Canadian government responsible for health care, has stated that it does not oversee drugs exported to the United States and has no plan to ensure the safety of those drugs. In fact, drugs that consumers obtain from Canada may not be from Canada at all, rather, they may have merely passed through after originating in another country.

While price controls imposed by countries such as Canada help keep costs down for consumers, bringing these drugs into America comes at a much higher price. Federal law in the United States requires that all drugs that originate here be approved by the Food and Drug Administration (FDA), preventing unsafe, ineffective drugs from reaching the marketplace. Unfortunately, drugs that come from other countries do not come with such a guarantee.

According to the FDA, drugs that originate in other countries may be manufactured and packaged in substandard conditions, lessening, or at worst, eliminating their effectiveness. Even American-made drugs that are re-imported into this country after being sold to a foreign distributor run a high risk of defectiveness due to lax storage standards in other countries.

Additionally, instances of drugs being created with no active ingredients are on the rise. Since the 1990s, the FDA has seen the number of counterfeit drug investigations increase fourfold. In 2003, the administration conducted "spot" examinations of mail shipments of prescription drugs arriving from foreign countries. Out of 1,153 examined, 88% contained unapproved drugs, a shocking example of the intensity of this problem.

In spite of the dangers, some of my colleagues in Congress have advocated that we allow importation of drugs from Canada. In response to these proposals, the Congressional Budget Office (CBO) conducted a study of the financial savings that could result from importation. According to the results of the study, any savings obtained would be counterbalanced by the costs to ensure the safety and effectiveness of the drugs. The FDA has issued a similar evaluation of the potential cost savings of importation, saying that due to the necessitation of increased safety standards, the savings to consumers would be very minimal, if existent at all.

Though importation of prescription drugs is a risky practice, America can remain competitive in the pricing market. As patents for brand-name drugs continue to expire, Americans can expect to see more and more savings by purchasing generic alternatives. Unlike brand-name drugs, the difference in cost between Canadian and U.S. retail prices for generic drugs are minimal. The FDA has seen an increase in its generic drug budget, money that the administration has allocated to expedite the introduction of more of these cost-saving drugs to the market.

Seniors who qualify for Medicare are already seeing savings in their drug costs thanks to the prescription drug card created by the Medicare Modernization Act that was signed into law in 2003. The Act also creates a prescription drug benefit for seniors beginning in 2006.

While we as Americans continue to benefit from the use of prescription drugs, we must weigh which is more important, saving a few dollars, or obtaining safe, effective treatment.

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