Pols’ Interest in Drug Reimportation Is Passé--for Good Reasons

Pols’ Interest in Drug Reimportation Is Passé--for Good Reasons
August 15, 2008

Greg Scandlen

Greg Scandlen is a senior fellow of The Heartland Institute and founder and director of... (read full bio)

It’s funny how little we hear about “drug reimportation” these days.

Oh, yes, it’s in the campaigns of both Senators McCain and Obama, but that just illustrates how out of touch they are. Out in the real world, no one is seeing it as much of a solution to anything anymore.

Montgomery County, Maryland was one of the first jurisdictions to begin an official program to help residents buy drugs from Canada. It was followed by statewide action in several states, most notably Illinois.

But Montgomery County repealed its program, and the program in Illinois, which was joined by several other states, filled only 11,000 prescriptions in its first year of operation beginning October 2004.

Today it is hard to find out whatever happened to “I-SaveRx.” An Internet search came up with lots of press releases extolling the program when it was first introduced, but nothing about any evaluation afterwards.

As often happens, the real world has a way of making politicians look foolish. One thing that happened to this whole idea was something the politicians have no control over--monetary exchange rates. For a while the strong dollar made Canadian drugs appear cheap, but then the dollar tanked and Canadian drugs became a whole lot more expensive. It had little to do with price controls in Canada or pharmaceutical manufacturers ripping off American consumers.

Despite all the political posturing by cynical politicians, the only real issue was the exchange rate.

In August 1998 the Canadian dollar (also known as the “Loonie”) was worth 66 American pennies. It was dropping and finally reached dead bottom in January 2002 at 62 cents, an all-time low.

That’s when the politicians noticed how cheap drugs seemed to be in Canada. Golly.

Since then, however, the Canadian currency has been on a steady and steep climb upwards, reaching $1.09 last November. That means the cost in dollars of things sold in Canada, including prescription drugs, was 76 percent more in 2007 than in 2002.

In the past few months the dollar has bounced back slightly, and the Loonie is currently worth 94 cents. But that is nowhere near enough of a difference to resurrect the erstwhile interest in using Canada to cut U.S. drug prices.

Meanwhile, all the other concerns about importing drugs remain, including:

 

  • It is impossible to ensure that a Web site with a graphic of a Canadian flag is really located in Canada and not in Zimbabwe or some other country with little interest in drug purity or safety.

 

 

  • It is impossible to know that the drugs you receive have been stored safely and are not counterfeit with unknown or dangerous ingredients. Just because a pill is molded into the same shape as a legitimate drug doesn’t mean it’s safe.

 

 

  • If something goes wrong and you or a family member get sick or dies from a bad medication bought from an overseas supplier, there is no relief available to you. You can’t sue, and you can’t collect damages.

 

 

  • There is no way to tell whether the sellers of the drugs are legal or are supporting terrorists or other criminal activities.

 

 

  • We can’t ensure that American firms will continue to be able to afford the research and development costs of finding new breakthrough medications that will save lives for years to come.

 

Let’s hope the Obama and McCain camps are listening.


Greg Scandlen (greg@chcchoices.org) is director of Consumers for Health Care Choice, a project of The Heartland Institute, Chicago.

Greg Scandlen

Greg Scandlen is a senior fellow of The Heartland Institute and founder and director of... (read full bio)