Three Strikes and More for Drug Importation

Three Strikes and More for Drug Importation
May 1, 2005

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)

Illinois Gov. Rod Blagojevich's (D) I-Save-Rx prescription drug program, launched in October 2004, came under attack on several fronts in March.

The program, which allows importation of drugs from foreign countries, is open to residents of Kansas, Illinois, Missouri, Vermont, and Wisconsin. More than 27 million people are eligible to participate, but as of late March only about 5,300 orders had been processed.

To address apparent "marketing difficulties" faced by the program, the Blagojevich administration required some state employees to attend after-hours meetings to train them how to better promote the program, according to a report in the March 25 Springfield State Journal-Register.

Staffers were required to attend "a scripted presentation about I-Save-Rx, citing such 'challenges' as no advertising money, 'scare tactics' by pharmaceutical companies and the federal Food and Drug Administration, and a competing Internet-based clearinghouse of prescription drug programs sponsored by drug manufacturers and Illinois pharmacists ..." noted Mary Massingale of the newspaper's state capitol bureau.

Although administration officials defended the sessions as appropriate for employee training purposes, the sessions were held on a Saturday and a Monday evening, after normal working hours.



Union Local Rejects Plan

As if to underscore the program's public relations failures, on March 16 Local 881 of the United Food and Commercial Workers (UFCW) union emphatically rejected I-Save-Rx. The local represents 36,000 members.

"We will not, nor have we ever, agreed to participate in Gov. Blagojevich's statewide partnership to enroll new participants in the I-Save-Rx program," said Ronald Powell, Local 881 president, in a written statement. "Foreign drug importation will not only cost Illinois consumers convenience at their local retail pharmacy, it will cost thousands of retail pharmacy jobs," Powell said.

Blagojevich had said at a March 13 news conference that the UFCW promised to promote his program. He failed to mention the pledge came from the smaller of two union locals.



Illinois Sued by Drug Wholesaler

Ecosse Hospital Products, a U.K.-based drug wholesaling firm, filed suit on March 16 seeking payment for flu vaccines Illinois contracted to buy in October 2004.

The firm seeks $2.6 million plus interest for roughly 250,000 units of vaccine it acquired and stored on Illinois' behalf. An additional 450,000 units were secured, on Blagojevich's request, for the state of New Mexico, New York City, and Cleveland, Ohio.

None of the 700,000 vaccine units has been delivered. Blagojevich had been told by the Food and Drug Administration (FDA) and other federal officials that importation would not be permitted.

Illinois Comptroller Dan Hynes (D) criticized Blagojevich for entering into the contract despite the FDA's warning. Hynes has refused to pay for the undelivered vaccines.



Giuliani Warns of Safety Concerns

A consulting firm headed by former New York City Mayor Rudy Giuliani issued a report on April 11 warning prescription drug importation would leave the U.S. vulnerable to terrorist attacks.

"Several credible sources have identified links between counterfeit goods, including pharmaceuticals, and organized criminals and terrorist groups," Giuliani writes in the report, "Examination and Assessment of Prescription Drug Importation from Foreign Sources to the United States." "It is not difficult to imagine a scenario in which terrorist groups could use this system to either finance operations or, worse, as a vehicle of attack."



Economic Harm Documented

Drug importation threatens not only the nation's security, but also its economy, according to research conducted for the Lewisville, Texas-based Institute for Policy Innovation.

In a report issued March 11, the group estimated that allowing U.S. citizens to import drugs from foreign countries or instituting Canadian-style prescription drug price controls in the U.S. would cost the Maryland economy more than $34 million in lost R&D spending by biosciences firms between 2005 and 2010, $45 million in lost "value-added" in industries that serve the state's biosciences sector, and nearly 900 jobs.

In earlier work, the group estimated national R&D spending by pharmaceutical and biotechnology firms would fall by $14.8 billion in the 12 years following implementation of a price control policy.



States Consider Importation

Despite the setbacks faced by importation programs across the country--and despite the fact importation remains illegal under federal law--a plan to help Nevadans buy drugs from Canada passed the state assembly's Commerce and Labor Committee in mid-March. In Florida, State Rep. Irv Slosberg (D-Boca Raton) has introduced a measure calling for a study of how much the state's taxpayers might save if Medicaid recipients and state employees were permitted to import foreign drugs.

Two drug importation bills also are pending in Texas, where the Texas Pharmacy Association (TPA) has launched a new ad campaign, "Waive Goodbye to Your Rights." Working with State Senator Leticia Van de Putte, R.Ph. (D-San Antonio), a pharmacist, the group has introduced a "Texas Pharmacy Patient Bill of Rights."

"We want to convey the message to the citizens of Texas that buying drugs from foreign sources not only means jeopardizing your health, but also literally waiving your rights as a patient," said Eddie Klein, president of TPA, at an April 6 news conference. "Most people don't realize that when you purchase drugs from a foreign Internet pharmacy, you are forced to sign a waiver that gives away your rights as a consumer."


Diane Carol Bast (dbast@heartland.org) is executive editor of Health Care News.


For more information ...

Research on the economic impact of drug importation by the Institute for Policy Innovation's IPI Center for Economic Growth is available on the group's Web site at http://www.ipi.org.

The Giuliani Partners report, "Examination and Assessment of Prescription Drug Importation from Foreign Sources to the United States," is available through PolicyBot™. Point your Web browser to http://www.heartland.org, click the PolicyBot™ button, and search for document #16834.

Diane Bast

Diane Carol Bast is The Heartland Institute's executive editor and finance manager. As executive... (read full bio)