Bernie’s Bereft and Bogus Bill
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On February 28, 2017, Sen. Bernie Sanders (I-Vt.) introduced, S. 469, the "Affordable and Safe Prescription Drug Importation Act." As of March 3, the bill is co-sponsored by 20 of his Democratic colleagues. In a February 28 press release, the sponsors challenged President Trump to "support our efforts" and to "encourage his Republican colleagues to do the same."
After passage of the misnamed "Patient Protection and Affordable Care Act," there are good reasons why Americans should be very wary of promises made by politicians to provide "affordable" and "safe" prescription drugs.
The bill would allow importation of prescription drugs, first from Canada and, after two years, from countries that are members of the Organisation for Economic Co-Operation and Development (OECD). The bill continues to ignore the fact that the Food and Drug Administration (FDA) has said with regard to importing drugs it "cannot assure that such products have been properly manufactured and are effective" and therefore, "their use would present an unreasonable risk."
Once a drug leaves the U.S., it also leaves the FDA closed distribution system, which was designed to ensure the safety and effectiveness of pharmaceuticals. Importation opens the door to crooked actors that could purchase large quantities of drugs and adulterate them, perhaps by re-manufacturing them with some sort of filler to increase the amount of product they could sell, but lowering the potency and safety at the same time. It would also encourage drug counterfeiting and diversion. FDA inspectors would be overwhelmed inspecting vast quantities of imported drugs into the U.S., even if funds raised through bill's provision allows the agency to charge for certifying foreign sellers.
The bill also ignores intellectual property rights, and the extraordinary value pharmaceuticals provide in improving people's lives, by having a forced sale provision. The legislation gives the federal government the authority to determine the foreign entities to which a U.S. pharmaceutical manufacture will sell their product, its price, and its quantity. If this bill should become law, it would set dangerous precedent for all innovators, not just biopharmaceutical companies, knowing that the federal government could force them to sell unlimited supplies of their product to any "certified" foreign purchaser that may want them.
S. 469, if enacted, could also cause shortages of pharmaceuticals for U.S. citizens. For example, if a foreign seller wants to purchase large quantities of a particular drug, the manufacturer would be obliged to produce and sell the amount requested to the foreign seller, tying up production lines and schedules for U.S. buyers of that drug and other drugs. Since there is no requirement that the foreign seller must re-sell the drug back to the U.S., shortages could easily occur.
There is no guarantee that the price of the drug will be substantially reduced, as the myriad of wholesalers, shippers, and importers will add their costs to the final price.
Sen. Sanders pointed out in his press release that in "Canada and other major countries, the same medications, manufactured by the same companies, in the same factories are available for a fraction of the price compared to the United States. In 2014, Americans spent $1,112 per person on prescription drugs while Canadians spent $772 and Danes spent $325." The senator fails to mention that price controls are the reason prices are lower in these countries. As a result, they conduct very little pharmaceutical research compared to the U.S. According to the Winter 2016 issue of R&DMagazine, the U.S. dominates the world with 56 percent of pharmaceutical/biotech research. The closest competitor is Germany at 16 percent, the United Kingdom is at 7 percent, and Japan is at 5 percent. Canada is not even on the list.
Furthermore, some politicians like to argue importation is free trade. It is not. It is simply importing another country's destructive price controls.
Perhaps Sen. Sanders should pay attention to former Democratic presidential candidate, physician, and fellow Vermonter Howard Dean who wrote in a New York Times September 18, 2015 Letter to the Editor, "The American drug industry is by far the most successful and innovative in the world in addition to being the most expensive because we are the only country that pays the true research and development costs, not only for Americans, but for the rest of the world as well." He went on to say, "schemes to launch a federal attack on one of the last growing, innovative industries in America are in the long run counterproductive for both job creation and, more important, for the health of human beings around the world."
Howard Dean is correct. Canada and other nations that utilize drug price controls ride on research paid for by U.S. taxpayers and consumers. Sen. Sanders would better serve the nation by working to make sure other countries pay their fair share of U.S. pharmaceutical research through better trade deals.
It is no surprise that Sen. Sanders is leading the way on this concept. After all, he thinks the U.S. should provide "free healthcare" and "free college," ignoring the fact that taxpayers would be responsible for these costs. If this law was ever implemented, patients would end up paying dearly for it because fewer innovative drugs would be developed. This ill-conceived legislation should not go anywhere in Congress.