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The side effects

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Imported prescription drugs could set off legal, economic chain-reaction

The Washington Post

It seems such a small change after the long debate over Medicare. But in fact, the House of Representatives' expected vote this week on a measure that would legalize the importation of prescription drugs from Canada, and possibly other developed countries as well, is far more radical than it seems.

In the most benign interpretation, the bill would simply legitimize what is already a roaring trade. Buses from the Northern states now regularly take seniors and others with heavy prescription-drug bills over the border to buy drugs that, thanks to Canadian price controls, cost about 35 percent less than their American equivalents. Many more now buy these same drugs over the Internet.

But if the bill works the way some predict, and if American pharmacies and doctors begin importing large quantities of drugs from Canada or Europe, the measure could have far-wider ramifications. Ignore the arguments about drug safety and the scare stories about abortion pills on demand; those issues are resolvable.

This is at heart an argument about prices, and the cost of creating innovative drugs. Opponents of the measure call it importing price controls. They argue that Canadian or European bureaucrats would, in effect, be setting drug prices for the U.S. market, and that companies' research budgets would be threatened as a result.

— By contrast, Rep. Jo Ann Emerson, R-Mo., who was promised this vote on drug importation in exchange for her deciding vote on the Medicare legislation, calls it importing competition. She and others hope the measure will force companies to lower prices in the United States or raise them elsewhere, or both.

Both opponents and proponents can sketch out apocalyptic visions of the future. If large quantities of drugs are being purchased in Canada for export to the United States, the drug companies may quickly refuse to sell to Canada, thereby disturbing the delicate arrangement by which foreign countries recognize U.S. patents in exchange for lower prices. Yet if some measure like this is not passed, U.S. drug bills will continue to rise exponentially. With a new prescription-drug benefit for the elderly now on the horizon, that prospect threatens the financial health of the country, as well as its citizens.

The very popularity of this measure, which enjoys bipartisan support, indicates that a sea change has taken place. Clearly, it is politically unsustainable for Americans to continue paying far more for drugs than the rest of the world. The drug companies, while right to claim that they need money to spend on research, and right to claim they are the best in the world because of that money, have overplayed their hand. This is a true consumer revolt.

At the same time, the creation of a loophole in the American legal system is the wrong way, in the long term, to solve such a thorny problem, even if it makes consumers happier in the short term. It would be far better for Congress to focus its efforts on making sure generic drugs get to market faster, on closing loopholes that allow drug companies to prolong their patents, and on thinking harder about how to extend health insurance to more people.

It is also time for the industry to start thinking harder about the needs of consumers, particularly those with low incomes: Despite the millions the industry spends on lobbying, its congressional support is finally ebbing.