Rx Reimportation and Importation: Panacea or Prelude to Disaster?

Guido R. Zanni, PhD
Published Online: Saturday, January 1, 2005

The media report daily on high pharmaceutical costs and on drug purchasing from Canada. Governors of some states have defied FDA regulations and created Web sites encouraging consumers to buy from Canadian pharmacies. Meanwhile, the FDA, drug manufacturers, the Pharmaceutical Research and Manufacturers of America, and numerous professional pharmacy organizations vigorously oppose drug importation, warning that it will erode protective drug development, manufacturing, and surveillance safeguards.

Consumers need price relief, but is buying from our northern neighbor the solution? Emotional debates miss some critical issues: the impact of large-scale drug importation, liability protections, product verification, and the economics behind pharmaceutical costs. Safety issues also are valid, not just FDA turf concerns.

Rx Reimportation Versus Importation

The media rarely distinguish between drug reimportation (whereby drugs are manufactured in domestic, FDA-licensed plants, are shipped elsewhere, and then are imported back) and importation (whereby drugs are manufactured abroad in facilities that may or may not meet FDA regulations and then are shipped here). Drugs imported from foreign facilities require FDA approval. Problems occur, however, when drugs are manufactured in unapproved facilities, imported to Canada, and sold to US customers. These imports are outside the purview of the FDA.

How serious is the drug importation issue? Approximately 44% of Canada's drugs are imported from the United States. The remaining drugs come from >80 countries, including India, the country responsible for exporting the most counterfeit drugs.1,2 The proportion of Canadian drugs unapproved by the FDA is growing; shipments from developing countries have increased by up to 300% in the past year.3

Economic Realities

Many analysts believe that lifting the ban on drug importation will impact American prices minimally in the long term and eventually will increase Canadian prices. US manufacturers expend approximately $800 million for each new product approval. To entice research and development, manufacturers are awarded exclusivity patents for up to 14 years.4 Drug companies, like most businesses, segment markets and discount some prices (so prices are generally lower in poorer countries).

Canada's population is one tenth that of the United States. The Canadian market represents approximately 7.3% of the drugs sold in this country.5 Drug company officials have accepted Canada's price controls because of its isolated, small market segment; they know that larger markets will offset the differential. Drugs are "artificially"cheaper in Canada; a truly competitive market would force drug prices in Canada and the United States to be comparable.5-7

Officials of drug manufacturers believe that drug reimportation to Americans undermines differential pricing structures and violates Canadian agreements. Based on historical drug utilization in Canada, several drug manufacturers (eg, Pfizer, Wyeth, AstraZeneca, GlaxoSmithKline) have implemented policies restricting shipments to Canadian suppliers that sell to US markets.8 Suppliers that continue to export to this country are experiencing shortages. Pfizer's actions, for example, have already caused Lipitor and Celebrex shortages, and some Canadian pharmacies are restricting prescriptions to a 30-day supply.9

States have filed antitrust suits against drug companies for setting sale limits,10 but continuing restrictions will negatively affect Canada's ability to meet its own patients'needs. Canadian drug supply would be depleted in <40 days if all Americans turned to Canada for their drugs. If only half of America's elderly used Canadian pharmacies, Canada would have to more than double its drug supply to meet demand.1 Canada lacks the capacity to meet American needs. Consequently, many Canadian professional organizations are urging their government to halt drug cross-border sales.11

The long-term impact is equally disturbing. If companies cannot separate markets, world prices will gravitate toward a single price, severely compromising poor nations. This is not a manufacturer scare tactic. Analysis by the nonpartisan Congressional Budget Office indicates that drug importation from industrialized countries would reduce Americans' drug expenditures by only about $40 billion over 10 years? or by only about 1%.4

Safety Issues

Documented cases of unsafe and counterfeit drugs, many with adverse outcomes, led to the 1988 law banning anything other than manufacturer-initiated drug reimportation. Today, mainly due to the >1400 Internet pharmacies, counterfeit and unsafe drugs are much more common.2,12 Sophisticated counterfeiting techniques visually confound even the experts.

Recent interceptions of drugs shipped to US consumers (Table) found that 88% contained non-FDA-approved substances, inert ingredients, products shipped under inappropriate storage conditions, expired and recalled products, and banned controlled substances.13

Some well-intended state officials are addressing safety issues by screening sites. This action, however, is ineffective against illicit Internet operators engaging in devious practices. In one instance, consumers believed that they were visiting US sites, but they actually were visiting Web sites in China and Belize. Three products ordered from these sites were all counterfeit. Additionally, serious problems exist with legitimate state-endorsed Internet sites. One study found that, of 765 prescriptions dispensed by approved pharmacies, 316 violated agreements.12,14 On-site inspections of participating Canadian pharmacies also uncovered unsupervised technicians, poorly trained pharmacists, poor labeling, drugs shipped without temperature protections, and unacceptable pharmacist workloads (eg, 100 prescriptions or 300 refills hourly).13

Limiting importation only to FDA-approved drugs and/or restricting the quantity of medications imported have been proposed.14 These proposals fail to resolve safety concerns. The multiple distributors and repackagers in the drug distribution systems create vulnerable points. Lipitor, for example, was recalled in 2003 when regulators discovered that up to 18 million counterfeit tablets may have entered legitimate distribution systems.12 Restrictions also undermine consumers'need for comprehensive relief from high prices for all medications.

With drug importation, the pharmacist's role in patient counseling, informed consent, evaluating contraindications, and monitoring for potential drug-drug interactions disappears. Liability is almost nonexistent, leaving consumers with little recourse. Some Internet pharmacies, such as the popular CanadaDrugs.com, require purchasers to agree that the companies will not be liable for damages arising from death or adverse reactions from their products. Drug manufacturers also abdicate liability for drugs not under their direct control.

Future Directions

A Department of Health and Human Services task force is addressing drug importation issues, including anticounterfeiting technologies, the willingness of foreign agencies to ensure safety, and long-term financial impact and liability protections.15 To stop counterfeiting, some experts suggest combining track-and-trace technology (similar to that used on the new $20 bill) with the drug's "pedigree trail,"which records the drug's path and location along the distribution chain.2,16

Conclusion

Two indisputable facts?consumers can find cheaper drugs using Internet pharmacies and safety cannot be guaranteed?prove that drug importation is at best a quick fix. Comprehensive solutions will involve systemic overhauls, including changing the economics of drug research and development. Until then, pharmacists must separate emotional rhetoric from legitimate safety concerns.

Dr. Zanni is a psychologist and health systems consultant based in Alexandria, Va.

For a list of references, send a stamped, self-addressed envelope to: References Department, Attn. A. Stahl, Pharmacy Times, 241 Forsgate Drive, Jamesburg, NJ 08831; or send an e-mail request to: astahl@mwc.com.



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