Bad Karma from Big Pharma

March 3, 2015

By Joe Rothstein
Editor, EINNews.com

Between 2004 and 2012 the City of Portland, Maine, saved more than $3 million by buying prescription drugs for its employee health plan through a Canadian broker rather than through U.S. sources.

A 90-day supply of the 40mg heartburn drug Nexium, for example, cost the city $200. The same order through Portland’s health insurer, Aetna, Inc., was priced at $621.

Northern U.S. border states particularly are tuned into the Canadian market for a great deal of commerce. If you need regular doses of expensive medication it’s hard to ignore the huge savings in buying Canadian. The problem is, under U.S. law, it’s illegal.

The Big Drug industry fiercely protects its lock on the U.S. market through the federal Food & Drug Administration, which controls which drugs can be sold and who can sell them. The upside of having such a federal drug traffic cop is that many criminal traffickers are all too willing to dupe consumers with drugs that are little more than powdered pap, or are produced in less than safe environments, or that are outright counterfeits of the real stuff.

The downside of FDA regulation is that it has long been a narrow choke point where the industry’s high priced lawyers and lobbyists can mold drug policy to fit the profit side of their balance sheets.

And it’s that narrow self-interest that clearly drives the FDA’s stubborn resistance to prescription drug purchases from legitimate Canadian brokers through pharmacies used daily by Canadians. While the Big Drug companies and their acolytes at the FDA claim the ban on buying Canadian is purely for safety reasons, to protect U.S. consumers, there’s been no noticeable epidemic of Canadians dropping dead from buying those identical products.

A recent study of 23 web sites certified by the Canadian International Pharmacy Association sampled 211 drugs. All passed quality control tests. In all the years that Portland, Maine purchased drugs through its Canadian broker, the city’s employees had no quality or safety issues that would cause concern. In fact, Pfizer, Merck and other Big Drug sellers who pose as guardians of public safety, manufacture products all over the world: China, Taiwan, Columbia, Thailand---name it and Big Drug is there, using local workers, local supervisors, local sourcing, local oversight.

The Big Dogs of Big Drugs protect the Canadian border because they can charge double and triple for drugs in the U.S. as a closed market. Not only do they continue to cut off Canada, when Congress enacted a drug benefit to Medicare 10 years ago, Big Drugs made sure that Medicare would be barred from using its massive buying power to negotiate lower prices. Think of the political power it took to convince Congress to make it illegal for the U.S. government to save billions by doing what any and every other big customer does, negotiate for a good deal.

Which brings me back to Maine and its history of buying drugs from reputable Canadian sources. A federal court ruled recently that Maine can’t do that any more. It blocked a law passed overwhelmingly by the Maine Legislature that greenlighted that practice. The federal government, through the FDA, regulates drug sales in the U.S., the court said. States don’t. The case, as you might expect, was brought by the Big Drug companies---to protect us from ourselves.

On the heels of that decision, Senators John McCain of Arizona and Amy Klobuchar of Minnesota introduced a bill to override the FDA and open the Canadian market. Back in 2012 McCain also tried to allow Canadian imports but fell far short of the votes needed to pass the bill. At the time, McCain said:

"In a normal world this would probably require a voice vote, but what we're about to see is the incredible influence of the special interests, particularly pharma, here in Washington, that keeps people who cannot — that have to make a choice between eating and medicine,"

Despite McCain’s sponsorship, most Republican senators voted against the bill.

In recent columns I’ve written about the distortions of capitalism that need fixing if the U.S. is to get back on track. Finance and banking are obvious. Add the health care system, and in particular the monopolies that control life-saving prescription drug research and sales.

We think of Pfizer, for example, as a drug company. But Pfizer really is the sum of all of its recent acquisitions, including such former stand-alone giants as Wyeth, Warner-Lambert, King Pharmaceuticals and Pharmacia. Pharmacia itself was the merger of Searle, Upjohn and Sugen. Last year Pfizer tried to buy British drug giant Astra Zeneca for $100 billion. Who has time to develop new drugs when you’re so busy playing pharmaMonopoly? Who needs to take chances when the alternative is to spend lavishly for companies that have created hot new products and then overprice them to get your money back, and plenty more?

If Big Drugs were really serious about the cross-border safety issue they would put their political muscle behind an international treaty to crack down on counterfeiters and criminal gangs who prey on people with illegal drugs. They would cut pricing to U.S. consumers so that those who struggle to buy needed drugs would not be fair game for anyone offering bargain prices from questionable sources. They would put more money into research and less into brand marketing and expensive acquisitions.

Given the huge economic impact of the health system on the U.S. economy the extraordinary political influence of Big Drugs is major distortion that vacuums up too much money for too little benefit. If enough of us tell that to our members of Congress maybe John McCain will have a few more allies for his bill this year.

(Joe Rothstein can be contacted at joe@einnews.com)