The Times Herald (Norristown, PA)
U.S. should do more to control prices of drugs
Of course it should never have taken more than three years and the threat of a lawsuit for the Food and Drug Administration to approve Florida’s plan to import prescription drugs in bulk from Canada.
The delay likely owed to the pharmaceutical industry’s implacable opposition to anything that would curb its profits, rather than to any foot-dragging by President Joe Biden, who had instructed the agency to cooperate with Florida and like-minded states.
It is true that every government bureaucracy is beset by well-paid, well-staffed lobbying groups determined to stop laws or regulations they oppose.
Big Pharma alone spent
$378 million on lobbying in 2022, according to Open Secrets. Its lobby, PhRMA, called the approval reckless and said it is considering all options to thwart it. That surely means more lawsuits.
Moreover, the unwritten rule in any bureaucracy is that the safest answer is usually “no.” That prevails regardless of which party is in power.
The FDA’s belated approval comes with informational and safety requirements that Florida should be able to fulfill.
The question is what might happen in Canada to thwart the savings, as much as $150 million a year, that Florida hopes to gain by purchasing cheaper drugs in Canada for Medicaid, its prison hospitals and programs run by the Department of Children and Families. (Individual consumers are already able to order prescriptions from Canada.)
Canada is concerned that sizeable purchases by Florida might lead to shortages and higher prices there.
As reported by
“Some drug manufacturers have agreements with Canadian wholesalers not to export their medicines, and the government has already taken steps to block the export of prescription drugs that are in short supply.”
In 2020, the Canadian government adopted an order prohibiting the export of any drug that might create or aggravate a shortage. A Health Canada spokeswoman told the “Canada’s drug supply is too small to meet the demands of both American and Canadian consumers. Bulk importation will not provide an effective solution to the problem of high drug prices in the U.S.”
That implies an advantage to the manufacturers, which could block exports to the U.S. by simply producing less than Canada needs.
Times, The New York Times:
U.S. drug prices are indeed the world’s highest and Canada’s are cheaper, owing to the work of its Patented Medicine Prices Review Board. Even so, they are the third highest among 25 comparable nations.
U.S. consumers spent
$1,376 per capita on prescription drugs in 2019, according to a RAND Corporation study. Canadians spent $811, still far higher than the $461 reported for the United Kingdom or the $589 tallied for France. RAND calculated that Americans pay 2.5 times as much as people in other industrialized nations.
Canada too has a powerful pharmaceutical lobby. It has stifled the review board’s most recent price-controls. The director and two board members resigned, with one blaming the government for surrendering to industry pressure.
But Canada has comprehensive price controls, however effective they may be, and the U.S. does not. Our consumers will continue to be stiffed until we have them too.
Biden’s Inflation Reduction Act was a significant step forward by repealing the rule that Medicare could not negotiate prices with manufacturers. In a process now underway, the Centers for Medicare and Medicaid Services has chosen the first 10 well-known, well-advertised drugs for mandatory negotiations. Agreed-upon prices would then be enforced, beginning in 2026, for all purchasers using Medicare Part D plans. Those are already limited to charging no more than $35 for a month’s supply of insulin.
What happens if a manufacturer does not come to terms by the present deadline of Aug. 1? The government would levy an excise tax on the drug.
The Congressional Budget Office had estimated the plan could save consumers more than $450 billion over a decade.
Even so, the negotiations apply only to expensive drugs for which there are no similar ones or generics, and they would be binding only for Medicare enrollees.
The general population needs more. Price controls should be as direct as those applying to the cost of electricity, another product that is essential to life.