- The Washington Times - Wednesday, October 8, 2003

Genuine Medicare reform is not dying in Congress due to a lack of effort. Both the White House and congressional conferees are working hard to craft a bill. Instead, it is being poisoned to death by politicians who want to give the mob and media what it has been yowling for these past months, importation legislation that reduces the prices and profits of drug and biotech firms.

Gil Gutknecht, JoAnn Emerson and Rahm Emanuel claim that importing drugs from Europe, Canada and South Africa is a safe way of cutting in half what the government, insurers and consumers spend on drugs without undermining the future development of any new medicine. Why would anyone want to reform Medicare when all you have to do is buy your drugs over the Internet from Canada?

Supporting importation is not an act of political courage. Who’s against a discount, especially if it comes at the expense of drug companies? Rather, what Mr. Gutknecht and others are doing is telling people and other politicians what they want to hear: that there are absolutely no risks or negative consequences from importation. And they have an eager cross-section of Congress — liberal and conservative — along with every Democratic presidential candidate, willing to be conduits rather than a check on such stupidity.

Mr. Gutknecht claims re-importation does not impose price controls, thereby easing the conscience of conservatives. That will be news to the European Commission, which reviewed the negative impact on what it called “administered prices” on patient access to medicines and the development of new medicines. Canada’s Patented Medicines Price Review Board also states that it regulates drug and biotech prices. In other cases, countries “let” companies price products at any level but only reimburse at the cheapest drug for that disease or only let a certain number of patients have access to a new drug. These are all forms of price controls, and they are the reason re-imported drugs are cheaper.

Price and reimbursement controls not only delay access — they deny it at a significant cost in patient health. Europeans and Canadians don’t survive cancer as often as Americans; they also suffer more with asthma, depression, epilepsy, multiple sclerosis and Alzheimer’s. Conservatives drinking Mr. Gutknecht’s Kool-aid love to chant his mantra that “an unaffordable drug is neither safe nor effective .” What about a drug that is unavailable thanks to price controls?

If these health problems trouble you, consider the impact of drugs that won’t be developed because price controls undermine future research and development. Over the past decade, pharmaceutical research and development in Europe has declined and shifted to the America’s free market. It has fallen by 20 percent in Canada in less than three years. Today, only three of the 25 best-selling drugs will belong to European companies. Only a decade ago, half of all top-selling drugs were European.

If America resold its medicine through Europe’s price system, it could cut future research by about 40 percent a year. Some conservatives claim that if importation did cut biotech and pharmaceutical research, all Congress has to do to make up the difference would be to boost the National Institutes of Health (NIH) budget. This is another half-truth that people who want to punish drug companies want to believe, and that Mr. Gutknecht and his crew are more than willing to reinforce.

But government labs don’t have the ability to discover and develop new drugs. Europe’s national labs have increased spending over the past decade with few results. And despite a doubling of funding over the past 20 years, NIH has a patentable claim for exactly six of the top 200 drugs used by the Department of Veterans Affairs in Defense Department health plan drug lists.

The claim that importation will save half of what insurance companies, government and consumers spend on medicines is laughable. This summer, IMS Global Health found that importation in Europe saved a mere half percent of the ¤82 billion EU pharmaceutical market. Once the bogus Canadian Internet pharmacies and wholesalers take their cut, Americans will save next to nothing.

Mr. Bush is committed to restructuring Medicare and has made his opposition to importation clear. Many politicians and presidential candidates want to scuttle Medicare reform and move to a straight vote on drug imports. If they succeed, here’s the question the president should ask the importation mob, since the media has failed to do so: If importation is the right response to rising drug costs, why import European price controls? Why not impose our own and see if it doesn’t hurt patients and medical progress? Or would that expose importation for the sham it is?

Robert Goldberg is director of the Manhattan Institute’s Center for Medical Progress.

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