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177 IRET Congressional Advisory 1 (2004)

handle is hein.taxfoundation/iretcgadv0174 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies thait will promote growth and efficient operation of the market economy. August 5, 2004 Advisory No. 177 SENATOR DORGAN'S BREATHTAKING DRUG BILL Senator Byron Dorgan (D-ND) introduced S. 2328, The Pharmaceutical Market Access and Drug Safety Act of 2004, on April 21. Its aim is to lower the prices of prescription drugs for American consumers to make the medicines more affordable. It is similar in many respects to the Pharmaceutical Market Access Act, sometimes called the Gutknecht bill, which the House passed in July, 2003, in that it would permit the wholesale importation of prescription drugs from Canada, the European Union, and some other industrialized nations where prices are lower than in the United States, and from Canadian pharmacies. significantly modify current The Dorgan bill several possible research and development of new drugs, and would injure future consumers. There are alternative, superior means prescription drugs would outlaw production and marketing actions that the pharmaceutical industry might adopt to restrict the availability abroad of drugs that could be imported or United States. sales to individuals The bills would law provisions governing FDA monitoring of the drug approval and manufacturing processes, labeling requirements, and distribution channels, raising questions about the FDA's ability to certify drug safety. Both would eliminate the requirement that the Secretary of Health and Human Services (HHS) certify safety before importation could begin. The Dorgan bill goes well beyond the earlier legislative proposal in that it would outlaw several possible production and marketing actions that the pharmaceutical industry might adopt to restrict the availability abroad of drugs that could be imported or reimported to the United States. These additional features of the Dorgan bill raise serious Constitutional, economic, and safety questions. The bill would surely reduce the funds available for reimported to the of guaranteeing access to to those who cannot now afford them, methods that would not have the serious side effects of the Dorgan approach. Safety concerns This paper is primarily concerned with the economic and property rights aspects of the Dorgan bill, but a few words about safety and truth in advertising are in order. One safety concern with more liberal drug importation is that drugs could enter the country that are not up to U.S. standards of safety or effectiveness, have not been handled properly (e.g. refrigerated, as is required for injectable drugs such as insulin), or are actual counterfeits. The Dorgan bill would repeal the Prescription Drug Marketing Act, which forbids the reimportation of U.S.-produced FDA-approved drugs that have been exported (and that have therefore left the country and the control of the U.S. manufacturer, such that neither the company nor the FDA can vouch for their safe handling or identity). But it also permits the importation of foreign versions of FDA-approved drugs that have never been within the U.S. system. In short, it should be admitted that, under Dorgan, there would be no guarantee that imported drugs are bioequivalent to FDA-approved drugs. There would also be less FDA supervision of manufacturing methods and labeling, g~*m 0 I g8~ a ~ia

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