Drug Importation Isn’t Safe and It Doesn’t Make Economic Sense, Says PSM President

This editorial by Marvin Shepherd was published in The Daily Caller on May 31, 2018.  In addition to being PSM's Board President, Dr. Shepherd was the Director of the Center for Pharmacoeconomic Studies and Chairman of the Pharmacy Administration Division at the University of Texas at Austin’s College of Pharmacy for over two decades.

Canadian Drug Importation To The US: A Failure?

Earlier this month, Health and Human Services Secretary Alex Azar — building off President Donald Trump’s May 11th speech on drug affordability — echoed what has now become a time-honored truth shared among the four previous Food and Drug Administration (FDA) commissioners. Namely, the importation of drugs from other countries as a means to lowering prices in the U.S. is both unsafe and — what I might add from a market perspective — economically unsound. (In fact, Azar, quite the straight-shooter, categorized importation schemes for what they really are: “gimmicks.”)

It seems logical that two wrongs don’t make a right, so one would think that the concept of accepting potentially unsafe products coupled with bad economics, should be the death knell of any policy proposal. Not so in Washington, D.C., of course, where some policymakers last year revived a decades-old idea of importing prescription drugs, especially from Canada. Like many such policies designed to tug on the heartstrings (who, after all, is against lower-priced life-saving drugs?), the details, once scrutinized, fall well short of the ideal.

Let’s tackle the safety issue first. The Partnership for Safe Medicines (a non-profit where I serve as president) recently published an eye-opening study on illegally produced fentanyl and overdoses. What is remarkable about the conclusions of this study was not simply the scale of the epidemic but, critically, the manner in which the drug was ingested—through counterfeit, seemingly innocuous, prescription pills.

And counterfeit pills were at the heart of the sad story of California-resident Tosh Ackerman who took a Benadryl and (what he thought) was part of a Xanax pill. The latter, it turns out, contained a lethal dose of fentanyl pressed into what appeared to be a single Xanax. And deaths like Ackerman’s are on the rise. As of March 2018, the study shows, counterfeit pills have popped up in 43 states, resulting directly in 22 states with fentanyl-related deaths.

As I have argued before, the standardization and safety mechanisms put in place by the FDA lead the world in effectiveness. Once the U.S. goes down the path of imported medicines all regulatory bets, from a safety standpoint, are off. We will no longer control the process. If something goes awry north of the border (or south, east or west), we won’t know until the after-effects have been felt.

But, for the sake of argument, let us assume for a second that we could ensure the safety of our imported medication. Do the economics play out favorably for the U.S.? Do they even play out favorably for Canada? Again, the answer is no. And it’s a simple case of supply and demand. Canada simply does not have the pharmaceutical infrastructure to come close to supplying our drug needs.

Again, the results of the aforementioned study highlight this to an alarming degree. In short, what I found after a few calculations is that, if even 20 percent of the U.S. prescriptions were filled using Canadian prescription drug sources, the 2015 Canadian drug supply would be exhausted in 183 days. Moreover, assuming America’s demand for Canadian brand name drugs will outpace demand for (already accessible) generic drugs, a mere 20-percent demand from the U.S. would sap the 2015 Canadian brand name drug supply in just over 200 days.

To deal with this shortage, Canada would itself have to become a drug importer from countries whose safety practices the country could not oversee with confidence. It would also, perversely, raise drug prices in Canada as supply becomes scarce in-country. In response, Canada would have to drastically limit its exports to the U.S., effectively putting us back where we started — but now with more poorly regulated drugs. And don’t just take my word for it. The Congressional Budget Office has assessed the importation issue many times over, each time finding that claims that our northern neighbors somehow hold the key to cheaper drugs, simply do not bear scrutiny.

Irrespective of one’s thoughts on this administration’s overall approach to health policy, from the vantage point of safety and sound economics, the decision to push back against zany import proposals should be praised and supported. After all, our Canadian friends are already such good neighbors; why complicate things?