Importation Opposition to Wider Importation:

¶ … Importation

Opposition to wider importation: Ineffective drugs

FDA counters state support for loosening restrictions

Raids show counterfeit, ineffective drugs

Opposition to wider importation: The Canada problem

Ineffective Canadian drugs

False claims of Canadian origin

Arguments for importation: Solutions from other industries look at water treatment and food processing

Can private solutions be applied?

Arguments for importation: Controlling the black market

Litigation not a complete solution

Steps needed by the government to protect rights

The debate over loosening regulations on the import of foreign drugs into the United States has proven polarizing among politicians and the public. As drug costs continue to rise, many Americans have expressed shock that the same drugs are often available cheaper overseas.

In a 2003 debate on the topic, Rep. Gil Gutknecht (R-Minn.) pointed out that certain life-saving drugs cost six times more in America than they do in European countries such as Germany, and many Americans have argued that Canadian drugs also are often cheaper (Importing Drugs, 2003). There has been plenty of rhetoric suggesting that greedy pharmaceutical manufacturers, and not market and regulatory forces, are to blame for hiking drug prices and lobbying against the importation of foreign drugs. However, the Food & Drug Administration, which oversees the approval of pharmaceuticals sold on the American market, is also wary of loosening restrictions. The FDA claims that such a move would open the market to counterfeit drugs and drugs of poor quality.

However, such arguments overlook very real steps that can be taken to make foreign drugs more available in the U.S. market, perhaps bringing down prices for American consumers. By taking cues from health-critical industries that have found ways to regulate product quality and by taking a tough stance to protect consumers and pharmaceutical manufacturers from counterfeit drugs, the American government can take important steps toward opening up the U.S. drug market to more imports.

2.1 Opposition to wider importation: Ineffective drugs

Opponents of importing drugs from foreign countries, such as the Food & Drug Administration, have mainly argued that it would be too difficult to control quality and that there would even be instances of outright counterfeiting. Recent history has shown that there is some merit to these claims.

In a statement before the Nevada State Board of Pharmacy, which was debating loosening controls on the importation of drugs, the FDA argued that foreign governments could not be trusted to reliably police the quality of the drugs manufactured on their soil (Statement of the U.S., 2006). When Vermont looked to loosen importation controls, the FDA stated that supporting such a move would "be inconsistent with FDA's statutory responsibility to protect the nation's drug supply" (Statements on Vermont's, 2004).

Certainly, FDA investigations have found evidence of poor quality drugs being manufactured overseas. In 2004, for example, the FDA was forced to issue a warning when it found that individual Americans were importing from a Mexican supplier versions of the drugs Zocor and carisoprodol that either contained no active ingredient or substandard potency (FDA Warns on Consumers, 2004).

2.2 Opposition to wider importation: The Canada problem

Naturally, one could argue that second- and third-world nations, such as Mexico, may not be reliable drug suppliers. After all, much of the debate over the importation of drugs has centered on Canada. In fact, in 1999 Vermont Congressmen Bernie Sanders led a busload of senior citizens into Montreal to purchase cheaper drugs in an act of civil disobedience (Sanders, 2006).

The FDA would argue, however, that drugs originating from Canada - or claiming Canada as their country of origin - also have been problematic. In a 2004 investigation, the FDA purchased several common drugs from a Web site advertising 'Canadian generics' and found that many were fake and, in fact, one was a controlled substance (FDA Test Results, 2004). Another FDA investigation found that many drugs claiming to originate from Canada are not from Canada at all (FDA Operation, 2005).

Without question, the FDA has proven that there are dangerous foreign drugs on the market, available for purchase by Americans. The FDA's position that it can not wholeheartedly endorse looser restrictions on foreign drugs, at first glance, appears reasonable, given its duty to protect the public health.

3.1 Arguments for importation: Solutions from other industries

The notion that quality can not be controlled if the pharmaceuticals are manufactured in foreign countries rings a bit hollow, as other industries that are responsible for safeguarding the public's health have successfully overcome the same problem. For example, the water treatment and food processing industries, like many industries where poor quality could negatively impact the public health, have both heavily exported equipment and materials from Asian countries (Cupp, 2005).

The fact is that both the water treatment and food processing markets have created global standards that are enforced by a variety of certification bodies. Entities such as NSF (formerly the National Sanitation Foundation) and Underwriters Laboratories have certification programs that manufacturing entities around the world must apply to join. The organizations will visit a firm's manufacturing facilities, no matter where they are, and rigorously inspect the process and test the firm's products and processes at regular intervals (About NSF). When you see the NSF mark on commercial, residential or municipal water filters or on commercial or residential food processing equipment, you can be certain that the parent company has undergone this rigorous process.

And, really, the market controls things from there. If you operated a restaurant chain, would you purchase food processing equipment that had not been certified and could contaminate the food? The same holds true for engineers deciding which equipment to purchase for a municipal water treatment facility that will serve a city.

And, really, it is not too difficult to extend this logic a step further for the pharmaceuticals industry and require that any drug made overseas be certified by an independent agency. Of course, this could add to the price of the drugs - the certification process will have a cost involved - but competition from multiple certification firms could keep this in check.

3.2 Arguments for importation: Controlling the black market

The matter of black-market drug production is a little thornier. It is an open secret that many developing nations make a fortune ripping off the patents of American companies and under-cutting those companies' prices in the market. Perhaps someone terminally ill and without health insurance is not going to be too concerned about this, but the fact remains that patent rights must be protected.

In fairness to pharmaceutical manufacturers, many innovative drugs have been brought to the market through millions of dollars spent on intensive research and development efforts. These companies deserve the rewards of their efforts, and if those rewards are not protected, the financial motivation to develop these innovative drugs disappears. That end result is bad for everyone.

Of course, the pharmaceutical companies are always going to have the right to pursue justice against these black marketers through the legal process. Letting the courts resolve the conflicts in the pharmaceuticals industry not only takes time, but it is incredibly expensive for the plaintiffs who have been wronged. Companies would spend a small fortune on litigation, and whether they would recover any money from an overseas, black-market manufacturer is questionable.