Importing Price-Controlled Drugs: Do Consumers Win?

Article excerpt

The debate about the benefits of importing drugs from countries that use price controls might seen less urgent now that the U.S. Congress passed a bill that would bring new Medicare drug benefits for seniors while still restricting reimportation of drugs from other countries. But drug pricing will continue to be important to consumers, government treasuries, and the pharmaceutical industry.

Importing prescription drugs that are less expensive in another country because of government-imposed price controls can be a temporary solution for individual consumers, but could have serious consequences down the road.

Buying price-controlled medicines from abroad may help people in financial need today, and that understandably has been the focus in the public debate. But what are the long-term effects for those patients with serious conditions or diseases who need more research and development of drugs for treatment in the future? For example, cancer is the cause of one out of every four deaths and the second-leading cause of death in the United States. Doctors and patients are fighting many forms of cancer with drug therapies that are currently limited in their effectiveness and often have serious side-effects for the patients.

Last year's outbreak of Severe Acute Respiratory Syndrome in several countries highlighted the constant threat from new and emerging infectious diseases. Considering the continuous warnings about possible terrorist threats to public health, the need for continuing investments in research and development to find new drugs and vaccines is clear.

Fortunately for many consumers, progress in medical and pharmaceutical research has been dramatic. Many diseases that could not have been treated even 20 years ago are now survivable and treatments are increasingly less intrusive. For diseases such as AIDS and childhood cancers, for example, doctors had few treatment options. Yet, survival rates for the most common form of childhood leukemia have risen from 4% in the early 1960s to almost 80% today, and many people with AIDS today are able to control the disease with different "cocktails" of drugs that had not been available earlier.

Anti-rejection drugs for organ transplant patients have benefited thousands who would have faced shortened lives. With those drugs, many transplants can be undertaken without the patient and donor having a close family relationship. The immunosuppressant drug therapies have made many organ transplants almost routine medical procedures. Increasingly, treatments using medication are less intrusive and provide higher quality of life for the patients--allowing them to continue working or engage in favorite pastimes. Those personal human benefits are important. Patients who do not have to stay in the hospital for an extended time can go back to normal lives and their jobs.

However, developing and testing medicines and vaccines today are costly undertakings. From promising research, it often takes 10 to 12 years before a new medicine might be available for patients. And the costs are staggering. It is estimated that the costs of developing a new drug plus studying it when it comes on the market are, on average, $897 million. This figure includes roughly $802 million in costs up to the time of receiving final marketing approval by the FDA. And only one-third of newly introduced drugs generate earnings that exceed average costs for research and development. …