President Obama’s proposed budget for the agency that approves new drugs and monitors our food supply calls for a 19 percent increase in 2010. Mostly, it’s more money spent the right way for the U.S. Food and Drug Administration. The $3.2-billion budget request for the 2010 fiscal year includes much needed increases to give the agency the resources it needs to carry out its job of protecting the public. So far so good. But here’s the big mistake: the budget includes $5 million for drug importation.

 

That may not seem like a lot given the $3.2-billion request, but $5 million for the FDA to develop policies to allow Americans to buy drugs approved in other countries is $5 million down the toilet. And it threatens to lead to millions of dollars in additional cost for an agency that is already underfunded and understaffed to carry out its job today.

 

State and local importation schemes have been dismal and politically embarrassing. Remember Illinois' high profile "I-Save-RX" program? Over 19 months of operation, a grand total of 3,689 Illinois residents used the program—which equals approximately .02 percent of the population.

 

And what of Minnesota's RxConnect? According to its latest statistics, Minnesota RxConnect fills about 138 prescriptions a month. That's for the whole state. Minnesota population: 5,167,101.

 

Remember Springfield, Massachusetts and “the New Boston Tea Party?” Well the city of Springfield has been out of the “drugs from Canada business” since August 2006. (But that hasn't stopped Chris Collins—a representative of CanaRX—from telling some New York municipalities that, “We’re now saving over $2 million a year in Springfield.” (Hamptons.com Sept 30, 2008, reported by Aaron Boyd).

 

And, speaking of tea parties, according to a story in the Boston Globe, “Four years after Mayor Thomas M. Menino bucked federal regulators and made Boston the biggest city in the nation to offer low-cost Canadian prescription drugs to employees and retirees, the program has fizzled, never having attracted more than a few dozen participants.”

 

In late July of 2008, the Canadian supplier for the program, Winnipeg-based Total Care Pharmacy, sent a letter to city officials saying the firm was terminating its agreement because there were so few participants. In 2006, Boston saved $4,300 on a total of 73 prescriptions. When Total Care decided to end its relationship with the city, only 16 Boston retirees were still participating.

 

And such programs won't do any better on a national basis. A study by the non-partisan federal Congressional Budget Office showed that importation would reduce our nation's spending on prescription medicines a whopping 0.1 percent—and that's not including the tens of millions of dollars the FDA would need to oversee drug safety for the dozen or so nations generally mentioned in foreign drug importation schemes.

 

That's millions of dollars in addition to the $5 million in the President's budget proposal.

 

This is not the pathway to safer drugs. In fact, it's precisely the opposite. What drug importation does is present the opportunity to import de facto price controls. Is this the President's agenda? It certainly has been for his Chief of Staff Rahm Emanuel, during his tenure as Congressman.

 

In order to combat this back door to the eradication of intellectual property rights, innovator pharmaceutical companies would likely restrict their sales of medicines to foreign nations to a certain fixed amount. This is precisely what some threatened to do when Canadian pharmacies began selling medicines designated for their domestic market to Americans.

 

In 2003, upset by this logical strategy to protect their intellectual property, Minnesota's then-Attorney General Mike Hatch, thumped his chest and announced the state's intention to sue drug companies for their attempts to keep drugs earmarked for sales in Canada in Canada. Mr. Hatch's announcement got a lot of news coverage and garnered him a prominent speaking engagement in front of the Families USA national conference in Washington, D.C. (after me and before Senator Ted Kennedy). What got hardly any coverage was the ensuing decision by a federal judge who dismissed the case as moot.

 

Mr. President, please review Surgeon General Richard Carmona's report on the issues relative to drug importation. That report can be found at

 

A total of $5 million to study drug importation? It’s money for nothing.


Peter J. Pitts is President of the Center for Medicine in the Public Interest, a former FDA Associate Commissioner and Partner/Director of Global Healthcare at Porter Novelli.