Sen. Jeffords' (R-Vt.) prescription drug re-importation bill has gained the support of another border-state Republican: Sen. Gorton of Washington.

Gorton told a Senate Health Committee hearing on drug pricing June 13 that he would become a co-sponsor of Health Committee Chairman Jeffords' Medicines Equity and Drug Safety Act (S 2520), which would allow drug wholesalers and pharmacies to import drugs.

Gorton was testifying before the Health Committee. He is the sponsor of another bill, the Prescription Drug Fairness Act (S 2464), that would prohibit drug manufacturers from charging more for a drug in the U.S. than abroad.

Gorton introduced S 2464 as an alternative to importation bills, which he characterized at an April press conference as creating "the bizarre situation where the drugstore in the U.S. could purchase an American manufactured drug in Canada for less than it could buy it for in the U.S."

Nevertheless, Gorton said, "I think that solution may very well be the direction in which we ought to go" (¹ Also see "Rx Trade Negotiations Tied To International Pricing Bill By Sen. Gorton" - Pink Sheet, 1 May, 2000.).

The Washington Republican continues to take the position that prescription drug pricing needs to be addressed via legislation even if drug coverage is expanded by adding a prescription benefit to Medicare.

"Adding a drug benefit to Medicare...does nothing to address the cost of prescription drugs for the 44 mil. uninsured Americans and does nothing to address the growing concerns of employers, health plans and hospitals about rising costs associated with prescription drugs," Gorton told the June 13 hearing.

"We need to address the issue of price discrimination this year," he added, "not only for Medicare patients but for the health system overall."

Jeffords' bill and a separate bill introduced by Rep. Berry (D-Ark.) in the House (HR 1885) and by Sen. Dorgan (D-N.D.) in the Senate (S 1191) "should help lower prices for American consumers and may pressure drug companies into offering American consumers lower prices on their own without having to resort to re-importation," Gorton said.

Gorton also criticized the pharmaceutical industry for avoiding the drug pricing issue in favor of the drug coverage issue. "So far," he said, "they have refused to engage in this debate on pricing. I hope they will change their minds."

Rep. Sanders (I-Vt.) also testified that both drug coverage and drug pricing bills need to be enacted. Neither the Republican nor the Democratic proposals "are going to be strong enough unless we lower the cost that the government is going to have to pay for prescription drugs," he said.

Congress needs to pass re-importation legislation, Sanders added, "which will substantially lower the cost of prescription drugs and that will help us provide a strong benefit program under Medicare because what we'll be paying for that drug is much less than is currently the case."

Families U.S.A. Foundation Executive Director Ronald Pollack agreed that legislation addressing both coverage and pricing is "absolutely necessary."

"We cannot merely solve this problem by focusing on moderation of prices," Pollack said. "We can't solve this problem by just giving good coverage. Both of these things need to go in."

"Even if we moderate prices, there are going to be vast numbers of senior citizens who cannot afford prescription drugs," he explained, "and if we merely provide prescription drug coverage and don't do something with prices, then that coverage is going to erode over time."

Health Committee member Collins (R-Maine) agreed that allowing drug imports "really isn't the full answer to this problem. Indeed, an American consumer or a senior citizen in Maine who is having a difficult time affording $300 worth of pharmaceuticals per month is probably going to have a difficult time affording $250 in costs per month."

The focus on reimportation bills as a solution to pricing problems can be viewed as a positive development for the brand name pharmaceutical industry in so far as a debate over trade and import policies is preferable to discussion of more direct price setting by the federal government.

The next step that the brand name companies would like to see in the debate is a move towards consideration of the potential for reimportation to compromise safety standards by encouraging counterfeiting.

Committee member Frist (R-Tenn.) referred to a June 8 House Commerce/Oversight Subcommittee hearing on FDA's foreign inspection program as evidence of the danger of opening the borders. According to testimony at the hearing, Frist said, "FDA had inspected only 24% of manufacturers of counterfeit bulk drugs" (² Also see "Bulk Drug Import Quality Reports May Be Required From U.S. Firms" - Pink Sheet, 12 June, 2000.).

Gorton maintained that the Jeffords' bill would ensure that imported drugs would be safe because it "entrusts HHS with maintaining the gold standard of safety established by the FDA."

Sanders testified that the authors of the re-importation legislation "consulted closely with the FDA in drafting and incorporated many of its suggestions into the legislation that was introduced." Sanders is a co-sponsor of Berry's re-importation bill.

"I have confidence that the FDA will be fully able to address this issue," Sanders said. "If we can import lettuce into this country produced at hundreds if not thousands of farms, certainly we can make sure that the quality of re-importation into this country is of the standard that we want it to be."

Frist responded that "lettuce importation in this country is different than gentamicin sulfate to treat a life threatening bacteria....That bothers me even more, because if we use the same standards that we use for importing lettuce in this country to import" drugs, "we're in trouble."

"My point," Sanders responded, "was that if you and other members have accepted the safety criteria for a product produced on hundreds and thousands of farms, surely, when you have a product that is manufactured by relatively few companies, we can administer it."

Pharmaceutical Research & Manufacturers of America President Alan Holmer testified PhRMA's largest concern with importing drugs "is our strong belief that these proposals would put the safety of patients at risk."

"I think the customs service does a pretty good job," Holmer said, "but their task is daunting." As an example, Holmer held up two packs of Viagra, "one a legitimate product made in Australia, the other a counterfeit made in Malaysia."

"See if you can tell which one is which," Holmer remarked. "I know I couldn't when I looked at them. This example underscores the challenge the customs service faces and the extent to which patients lives could be put at risk if" the prohibition on importing drugs were overturned, he said.

One border state Republican, Montana Sen. Burns, adopted the PhRMA analysis in testimony before the committee.

"Even today, FDA estimates about a fourth of the drugs coming out of Mexico are counterfeit," Burns said. "Safety is key as we look for ways to lower the cost of prescription medicines, whether purchased through Internet sales or foreign sources."

Burns, however, remains interested in the potential for re-importation. With the caveat that the safety of products is considered the primary goal, "we may be able to work out something with regard to the movement of drugs over international borders."

University of Minnesota PRIME Institute Director Stephen Schondelmeyer maintained that although the current system allows some counterfeit products into the U.S. market, "we can have confidence in" countries the U.S. has dealt with on harmonization issues.

"We must explore ways to develop parallel imports and to bring competition and free trade...into this market place," Schondelmeyer added. "I would argue that there is far more economic harm that occurs in this country today from senior citizens who can't afford their medications than there ever was...from counterfeit drugs coming into the U.S."

Sanders advanced a different element of his pricing agenda June 13, when the House attached an amendment sponsored by the Vermont Representative to restore the "reasonable pricing" clause to cooperative research & development agreements (³ Also see "CRADA "Reasonable Price" Clause Becomes Part Of HHS Approps Bill" - Pink Sheet, 19 June, 2000.).

Two border state Democrats in the House, Reps. Peterson (Minn.) and Hall (Tex.), on the other hand, have endorsed the Medicare Rx plan preferred by PhRMA (⁴ Also see "Thomas Medicare Plan Attracts Two Border-State Democrats As Co-Sponsors" - Pink Sheet, 19 June, 2000.).

Jeffords Rx Re-Importation Bill Gains Sen. Gorton's Support

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