Drug Importation Debate Highlights Need For Lower Rx Prices - CMS Administrator

The findings of the HHS importation task force and the new Medicare drug benefit will lead to lower prices for consumers, CMS Administrator McClellan tells NACDS. Fairer international pricing, including reduced prices of generics in other countries, is also a way forward, he adds.

The debate over drug importation highlights the need for reduced drug prices, Centers for Medicare & Medicaid Services Administrator Mark McClellan, MD/PhD, said.

"I do think the one thing that's come out of this very clearly is the need for us to be taking more steps right now to get the drug prices down," McClellan told the National Association of Chain Drug Stores pharmacy & technology conference in San Diego Aug. 30.

McClellan is a member of the HHS task force on drug importation. The task force is expected to release a report later this year (¹ (Also see "HHS Importation Task Force Moves Into Writing Phase; Still Seeking Input From Health Canada" - Pink Sheet, 17 May, 2004.)).

"I think we should keep making progress on bringing drug costs down, as well as using the findings of this task force report to take further steps in the not too distant future," McClellan said.

Drug prices could be reduced "through using the process of developing medicines and sharing the burden more equally round the world."

"That doesn't mean necessarily that other countries need to pay more, they just need to pay better," McClellan explained. "They're overpaying for generic drugs substantially in most parts of the world right now because of price regulations of generic drugs, so there's some way forward there as well."

The Commerce Department is conducting a study on global price controls as mandated by the Medicare Modernization Act (² (Also see "Global Price Control Elimination May Not Affect U.S. Rx Costs, Economist Tells ITA Panel" - Pink Sheet, 3 Aug, 2004.)).

The importation task force hearings have also had an effect on congressional legislation.

"I think the information has also had an impact on congressional discussions about this issue, whereas before a lot of the congressional focus was just on throwing open the borders and not paying much attention to making sure the drugs that come in were safe," McClellan said.

"The legislation that many members of Congress are pursuing now includes substantial new authorities and substantial new resources for the FDA and others involved in protecting our nation's border and protecting our citizens from unsafe products over the internet or elsewhere."

McClellan, who was previously FDA commissioner, has suggested that the agency could regulate some level of reimportation with a budget of "several hundred million dollars" (³ (Also see "Rx Import Bill Could Be Modeled On Food Inspection Program – McClellan" - Pink Sheet, 11 Mar, 2004.)).

Vermont has sued FDA over denial of the state's request to set up a pilot drug reimportation program (⁴ (Also see "Rx Importation Will Have Its Day In Court: Vermont Plans Lawsuit Against FDA" - Pink Sheet, 11 Aug, 2004.)).

McClellan noted that the HHS task force is also assessing the price impact of legalized importation.

"We're looking at some further information on just what kind of a price impact some of these changes in drug importation policy could have."

"The bottom line is that seniors and other Americans should be seeing lower drug prices now through the steps that we're implementing in the Medicare drug card program and the new Medicare benefit," McClellan said.

Costs should also be reduced through "steps to make sure we're spending our pharmaceutical dollars much more wisely by avoiding unnecessarily costly prescriptions, duplicative services, other things that add a lot unnecessarily to prescription drug bills for Americans around the country."

"The task force, along with all the other steps I've been describing, give us a stronger foundation than ever to really get those costs down and there are now very many concrete steps that we all can take to help seniors lower their drug prices safely right away."

- Elizabeth Walker