NCPA - National Center for Policy Analysis

Drug Makers Defend Borders

October 30, 2003

On Capitol Hill, pharmaceutical executives say that legalizing drug imports would endanger American patients and sap profits that pay for research. But their message to Wall Street has been more reassuring -- that the problem of drug imports, at least for now, is well in hand, according to the New York Times.

  • Pfizer's chief executive, Henry A. McKinnell, says that over the last few months Pfizer has been able to reduce the amount of its drugs being imported from Canada into the United States to less than $10 million a year from about $40 million.
  • Merck & Company's chief executive, Raymond V. Gilmartin, said last week that imports of Merck drugs from Canada were not significant.
  • If House and Senate conferees trying to hammer out a Medicare drug benefit opt to include a provision allowing imports only from Canada, it seems likely that the industry's present upbeat descriptions would hold true.
  • Meanwhile, mechanisms that Pfizer, GlaxoSmithKline and AstraZeneca have used to limit sales in Canada to local demand appear to have allowed the industry to keep cross-border traffic under control.

Many Internet pharmacies in Canada already report that they are having trouble getting pills to fulfill orders from the United States.

But if European countries are included in the import bill -- as they were in a measure that was passed by the House in July by a single vote -- the industry argues that the threat to both profits and drug safety would be significant.

"If there's widespread importation, that massive value transfer will make it very difficult to fund research,'' says Robert Smith, a spokesman for Eli Lilly.

Source: Gardiner Harris, "Drug Makers' New Intensity In Defense of U.S. Borders," New York Times, October 30, 2003.


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