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Executive Summary

Rep. Dingell (D-Mich.) has asked Com. Young and U.S. Customs Service Com. William von Raab to detain at U.S. ports all pharmaceutical shipments marked "American goods returned" until their safety and efficacy are tested and affirmed. In an Aug. 5 letter to Young, Dingell requested that "all pharmaceuticals entered as 'American goods returned' be denied entry into this country until your agency has sampled and tested each entry to assure that the drugs are safe and efficacious." Dingell, whose House Commerce/Oversight Subcmte. began an investigation of Rx drug diversion last fall, after counterfeit Ovulen 21 was discovered in the marketplace, questioned why reimported American drugs would not automatically be tested for quality by the agencies. "Frankly, I see no reason why such entries would not automatically raise serious suspicions," the congressman told Young. "Apparently, neither the FDA nor Customs felt that Ovulen 21 birth control pills reimported from Panama should be detained and tested. These entries through the ports of Miami and New York were foreign-sourced counterfeits that entered the diversion market in the U.S." In his Aug. 5 letter to von Raab, Dingell maintained that "even in the case of pharmaceutical products actually manufactured in this country, exported, and then reimported, there is no way that the laws of the U.S. can assure that these pharmaceutical drugs have been properly handled, stored, and labeled. "Accordingly, we believe that it is incumbent on the officials charged with assuring that unsafe or inefficacious drugs do not reach unsuspecting American consumers from abroad act to create conditions of import designed to minimize the risks from foreign supplies of pharmaceuticals," Dingell said. The letters were released Aug. 7, at the second hearing held by the subcmte. on the drug diversion issue. The hearing was held one day after a press conference by the Justice Dept. on an investigation in Atlanta into drug diversion. Although the subcmte. staff indicated at the first hearing last month that better enforcement, rather than legislation, is needed ("The Pink Sheet" July 15, p. 4), Rep. Sikorski (D-Minn.), who chaired the hearing, declared that the subcmte. "will work to develop comprehensive legislation to eliminate this health threat." In the meantime, Sikorski added, "the least the govt. can do is to test the pharmaceuticals which present the most clear and present danger to American consumers." Reportedly, FDA Associate Com. for Regulatory Affairs J. Paul Hile after the first Oversight Subcmte. hearing asked agency import experts in the field to develop alternative proposals for handling goods labeled for reimportation. The proposals are still being considered, and a response his not been sent to Congress. A third Oversight Subcmte. hearing on drug diversion is tentatively being scheduled for September. The hearing is expected to focus on possible solutions to the problem, and representatives of the Pharmaceutical Mfrs. Assn., the Natl. Assn. of Chain Drug Stores, and the Natl. Assn. of Retail Druggists are expected to testify. Such proposals include limiting or eliminating the use of samples and restricting Rx drug price differentials, particularly by narrowing the legal definition of "nonprofit," under which exemptions to Robinson-Patman antitrust prohibitions are allowed. In response to the House Energy and Commerce Oversight and Investigation subcmte.'s preliminary report on drug diversion, the Natl. Whsle. Druggists' Assn. (NWDA) issued a statement on Aug. 5 distinguishing its membership of full-service whslrs. from the "submarket of primary and secondary diverters/brokers." The assn. said it agrees with the staff report that "whslrs. and retail pharmacists are injured competitively by non-profit institution diversion and export/import schemes." NWDA added that it "shares Congress' concerns and hopes this investigation into the diversion market will result in cleaner, safer market competition." The assn. noted that it has forwarded the information made public in the subcmte. investigation to its members.

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