Drug Importation Infrastructure Already Largely In Place, CVS CEO Says
This article was originally published in The Pink Sheet Daily
Executive Summary
A bulk importation scheme through certified foreign exporters would require adding safeguards to the existing U.S. distribution system, CVS CEO Ryan tells the HHS importation task force. Primary importation challenge would be ensuring adequate supply
Much of the infrastructure for importing drugs is already in place, CVS CEO Thomas Ryan said May 5 at a meeting of the HHS importation task force. A bulk importation system would involve "adding some safeguards to the safe, well-established distribution system already in place in the U.S.," but would require significantly fewer resources than policing legalized direct importation by consumers, Ryan said. The exec suggested an importation system under which established U.S. wholesalers import drugs in bulk from approved foreign exporters, who would pay a fee toward the cost of additional oversight and inspections. American pharmacies would purchase and dispense the drugs. Savings could be realized because importation would work through existing channels, Ryan said. "They would be just calling on drugs the way we normally would call on them. I'm oversimplifying it, but I don't think there would be a lot of cost," Ryan said. The Congressional Budget Office recently reiterated its conclusion that a broad importation scheme would result in little savings (1 (Also see "CBO Report On Rx Importation" - Pink Sheet, 30 Apr, 2004.)). CVS' primary challenge would be ensuring the quantity, rather than the safety, of imported drugs, Ryan noted. "Our issue would not be the safety issue. Our issue at the end of the day would probably be a supply issue. Would we, in fact, get the necessary supply?" Drug wholesalers maintain that increased demand for a small number of Canadian pharmaceuticals would make widespread importation unsustainable (2 (Also see "Rx Importation Is Unsustainable, Distributors Tell Task Force, Because Of Supply/Demand Imbalance" - Pink Sheet, 6 Apr, 2004.)). Because of limited supply, lower-priced imported drugs should be designated for uninsured consumers, Ryan said. "Making imports available to any and all payors would likely strain supplies to the point where cost savings would disappear." Importation is only a temporary solution for immediate relief, Ryan said. The long-term goal should be more equitable global pricing. The current pricing model "simply cannot be sustained," he said. - Elizabeth Walker |