For the first time in memory, Big Pharma actually appears to be shaking in its boots with the announcement of healthcare provisions in President Obama’s budget — including allowing U.S. consumers to purchase drugs from Canada.
The AP reported it this way:
Stock prices for major drugmakers fell sharply Thursday as investors were apparently worried about provisions of President Obama’s budget proposal that could significantly reduce profits across the pharmaceutical sector…
One item in the budget that spooked shareholders was support for “new efforts” by the Food and Drug Administration to allow Americans to “buy safe and effective drugs from other countries.” During the Bush administration, the FDA opposed the idea and frequently stated that such “reimported” drugs might be counterfeit or otherwise unsafe.
Drug companies and their trade groups have opposed such a prospect even more strongly, claiming that it would reduce the money they have available to fund research to develop new medicines…
The proposal on reimportation comes under a brief section of the budget document with the subheading “Lowers Drug Costs.” The section also states that the budget supports FDA efforts to “establish a new regulatory pathway to approve generic biologics,” meaning generic versions of complex drugs that generally are produced in bacteria or other living cells.
Large pharmaceutical companies in recent years have been diversifying from making pills to licensing or buying small companies that make biologic drugs. These drugs are generally very expensive and so far don’t face cheap generic competition like the blockbuster pills rolled out in the 1990s.
Just to swat down the red herrings from Big Pharma in this article, concerning safety and R&D:
1. Licensed Canadian pharmacies are proven to be safe.
There is not a single instance of an American citizen being harmed by a drug ordered from a pharmacy that has been properly licensed by the Canadian government. Canada’s pharmacy licensing system is the equal of our own.
2. The bulk of Big Pharma R&D dollars go to extending patent monopolies, not creating innovative new treatments.
Pharmaceutical companies have gamed the FDA for years by arguing that they deserve short-term monopolies on new drugs as a reward for their innovation. When granted these monopolies, they raise prices through the roof. Then, they waste their precious R&D money on finding ways to extend these monopolies indefinitely — by identifying new uses for existing drugs or making slight tweaks to their formulas that will extend patent protections. This is R&D that serves profits, not innovation.
Clearly, a shakeup of public policy toward Big Pharma is way overdue. In the case of allowing drug reimportation from Canadian pharmacies specifically, it’s a decade overdue.
So, will the President’s proposals pass?
One industry analyst put it this way: “This is the first time in the history of the industry where it’s been assailed on several fronts simultaneously … at a time when politicians aren’t likely to come to its defense.”154