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Debate on medicines heats up on both sides of the border

[PoliticsWatch updated 5:00 p.m. August  9, 2007]

OTTAWA -- While summer tends to be the quiet season in politics, this summer has been anything but on the political front for the pharmaceutical industry in both Canada and the U.S. 

In Canada, Health Minister Tony Clement has waded into the feud between Canada's brand-name and generic drug manufacturers and in the U.S. both the House of Representatives and the Senate have passed legislation that includes provisions to allow for drug reimportation from countries such as Canada. 

Here's a run down of  the latest developments. 

Canadian Health Minister Tony Clement with Prime Minister Stephen Harper.

Canadian Generic Drug Prices

"I have nothing against the generic industry," Health Minister Tony Clement said in an interview with CanWest News last week, before calling the same industry an "oligopoly" that is to blame for Canada's high generic drug prices. 

Clement's tough talk against Canada's generic drug industry was a rarity for a Canadian health minister. 

The minister appears to have taken sides in this political minefield based on research from the Fraser Institute which suggests Canada's generic drug prices are double those of the U.S. This report "almost changes the whole debate," surrounding a national pharmaceutical strategy, Clement told CanWest.

As PoliticsWatch exclusively reported last year a federal-provincial task force developing the national pharmaceutical strategy considers Canada's high generic drug prices an issue that has to be dealt with. "The most significant problem for non-patented drugs ... is Canada's lack of international competitiveness on prices," said one policy briefing note obtained by PoliticsWatch under Access to Information. 

The task force is basing its information on studies by the Patented Medicines Prices Review Board. Last year, the PMPRB said in a study that Canada's generic drug prices were 26 per cent higher on average than prices in other industrialized nations. 

However, Clement is not alone in shining a light on the generic industry in Canada. This week, the National Post reported on a leak draft report from the Competition Bureau of Canada, which was investigating high generic prices. The report, however, does not place blame entirely on Canada's generic industry. Even though Canadian consumers are paying more for generics than most other industrialized countries, the report said Canada's generic industry is "highly competitive." 

On Capitol Hill, US. lawmakers are continuing their push to legalize drug reimportation.

U.S. Reimportation Efforts

In Washington, both the House of Representatives and the Senate have included reimportation provisions as attachments to other bills in an attempt to challenge a likely veto from the Bush White House which is opposed to such efforts. 

In early August, the House passed an agriculture appropriations bill (HR 3161). Included in that bill was an unrelated provision that would effectively permit the importation of lower-cost prescription drugs from countries such as Canada. The bill passed by a wide margin (237 to 18). The provisions for reimportation had strong support from both Republicans and Democrats, as an amendment to remove the reimportation clauses was easily defeated by a vote of 283-146. 

The amendment was introduced by Republican Congressman Mike Rogers of Michigan, who is a reimportation proponent. Rogers said he moved the amendment to show that a majority of members of the House are supportive of reimportation. Rogers rejected opponents' concerns about the safety of drug reimportation by saying, "This is a country that just invented the iPhone. We can figure out how to make this safe."

In the U.S. Senate, it's a different story. 

Senators were accused of cynical politics in May after a senate vote on reimportation. 

A bill (S-242) introduced earlier this year by Democratic Senator Byron Dorgan and Republican Olympia Snowe allowing pharmacists and wholesalers to purchase certain prescription drugs from Canada and a handful of other countries was added as an amendment to an important bill that reauthorized the Food and Drug Administration to collect user fees from drug companies. 

The Senate passed Dorgan and Snowe's amendment, but it was a meaningless victory because the Senate later passed another amendment from Republican Mississippi Senator Thad Cochran that was considered a poison pill. Corchran's amendment would require the Health and Human Services secretary to certify reimportation would pose no threat to public health, something the Bush administration has said they cannot guarantee. 

The Dorgan-Snowe amendment and the nullifying amendment were mocked by Wall Street Journal columnist Kimberley Strassel as "bizarre and highly cynical." Strassel said the reimportation debate has become just a forum that merely offers politicians a "chance to bash U.S. drug companies and to stand with 'overcharged' U.S. consumers." 

Drug Safety

The reimportation issue may also be a victim of recent headline grabbing stories about contaminated pet food ingredients and toothpaste from China. 

U.S. drug companies have often used concerns about the safety of drugs as one of their primary talking points against reimportation. The U.S.'s Pharmaceutical Research and Manufacturers of America (PhRMA) sponsor a Web site called Buy Safe Drugs, which specifically questions the safety of drugs U.S. consumers believe they are purchasing from Canada. The site contains the header, "Think your drugs are from Canada? Think again."

Similar safety concerns were raised in a Washington Post story in June about the lack of FDA inspections at foreign drug manufacturing facilities in China and India. Over the past seven years, the FDA conducted only about 200 inspections of plants in those countries compared to the 1,200 annual inspections of the U.S. facilities. 

The Post story noted that the U.S. has been caught off guard by the rapid growth of drug exports from the two countries. 

"You have this confluence of events, with so much more product coming from abroad and fewer and fewer inspections," William Hubbard, a former FDA associate commissioner, told the Post. "This is very serious stuff, because a contaminated drug hitting the market could cause lots of injuries or worse before it got tracked down."

There are signals that China is taking safety concerns from its trading partners seriously. China  executed its former drug regulator in July after he was found guilty of taking bribes. 

"Corruption in the food and drug authority has brought shame to the nation,'' Yan Jiangying, deputy policy director of the State Food and Drug Administration, said at a press conference in Beijing. "What we'll have to learn from the experience is to improve our work to emphasize the protection of public safety.'' 


While the reimportation movement has suffered a set back in recent months, the U.S. drug companies are not letting up on their lobbying efforts. In June, PhRMA held a briefing for congressional staff in Washington about the "threat" behind reimportation. CongressDaily reported that PhRMA correctly predicted at the time that U.S. lawmakers would still try to legalize reimportation by attaching it to "must-pass legislation."

Internet Pharmacies

In June, the Canadian International Pharmacy Association revealed that sales from Canadian Internet pharmacies had dropped in half since 2004 to $500 million annually. 

Just two years ago, the growth of Internet pharmacies in Canada was posing a headache for Canada-U.S. relations as Americans consumers began purchasing cheaper drugs from Canada. But a stronger Canadian dollar and better access to cheaper generic versions of drugs in the U.S. is cited among the factors in the sudden decline in business. 

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