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Read Making a Killing

home / healthcare / in the media

The Daily News of Los Angeles
Jun 05, 2004

by Evan Pondel - Staff Writer

Pill makers rushing to push risks of buying drugs abroad

As California moves closer to passing laws that would make drug imports from Canada easier, the pharmaceutical industry is attempting to debunk the benefits of buying medication abroad.

Most of the anti-importation rhetoric stems from pharmaceutical companies that feel threatened by the glut of prescription drugs coming from Canada. The drug industry says it is difficult to ensure quality when prescriptions are filled in foreign countries. But advocates of drug imports are convinced that soaring costs can be tamed by tapping Canada, where regulations virtually parallel those of the United States.

"One-third of research and development for drugs is funded by taxpayers in the U.S. We just can't afford them when we get sick," said Assemblyman Dario Frommer, D-Glendale, who sponsored two bills supporting drug imports from Canada.

The state Assembly voted in favor of the legislation last week, along with several other bills that would essentially improve the flow of Canadian drugs entering California. The Senate has until August 31 to sign off on the measures, which will then be in the hands of the governor.

As the Assembly mulled the bills last week, so did the California Healthcare Institute, an advocacy group whose mission is to develop policies and actions that promote biotechnology and pharmaceutical interests in California.

The organization subsequently issued a report that cites several reasons why importation of Canadian drugs is not safe. For example, Minnesota pharmacy regulators found that several drug wholesalers and Canadian Internet pharmacies lacked appropriate supervision of technicians who dispense drugs. The CHI report also cites unsafe labeling and improper shipping practices in Canada.

Despite these assertions, many U.S. companies manufacture and sell drugs in Canada. Amgen, a Thousand Oaks-based biotechnology company, received approval in Canada about two years ago for its anemia-fighting drug Aranesp. The company now sells the drug in Canada, along with arthritis-fighter Enbrel. Even though Amgen has established a presence in Canada, the company continues to express concern about the reimportation of drugs.

"We don't want the patient's safety to be compromised," said Michael Beckerich, a spokesman for Amgen.

To address these issues in political circles, the company has increased its hiring in the Washington, D.C., area. David Beier, a senior vice president of global affairs, is now based there. He also recently joined the board of directors at the California Healthcare Institute.

Beier did not return phone calls seeking comment. When Beckerich was asked whether Beier's role at CHI presents a conflict of interest he said, "No, but this is the first I've heard of it."

Meanwhile, at a time when legislation could lead to even more Canadian drug imports, Amgen is maintaining a steady stream of political contributions. In September, the company donated $100,000 to Californians Against the Costly Recall. Four months later, Amgen donated $25,000 to the California Republican party and $21,200 to Californians For Schwarzenegger.

"Our contributions have been pretty consistent. And we are giving them resources to move forward on their agendas," Beckerich said.

Consumer advocates agree, except on the issue of agendas. Jerry Flanagan, a lead advocate at the nonprofit Foundation for Taxpayer and Consumer Rights, said Amgen and other pharmaceutical companies are lining the pockets of politicians to protect their own profits, not patients' interests.

"And to say that the drug companies have greased the legislature would be an understatement," Flanagan said.

Another argument posed by the pharmaceutical industry is that the more prescriptions are filled in Canada, the less money will go for research and development in the United States. That theory is countered by the fact that many drug companies depend on revenues from Canada. And curbing sales by banning reimportation could also hurt revenue allocated for research and development.

"Drug prices are higher in the U.S. than the rest of the developed world. And this is where we pay back all of the research and development we have done," said David Dunne, professor of marketing at the University of Toronto.

Regardless of new drug legislation, consumers are still likely to fill their prescriptions in Canada. The drugs are usually less expensive than their U.S. counterparts because the government dictates the pricing of pharmaceuticals. The Foundation for Taxpayer and Consumer Rights said the Canadian government is able to negotiate bulk discounts for drugs of up to 60 percent off. U.S. consumers are then wooed by Canadian pharmacies that pass along the savings.

Pharmaceutical companies are fighting back by issuing different names for the same drugs. That leads to complications when consumers attempt to fill prescriptions in Canada and the pharmacies do not recognize the names.

"Drug companies are using these strategies to restrict the imports from Canada. And that's because there are clouds hanging over pharmaceutical companies these days," said Sena Lund, analyst with Cathay Financial in New York.

To the advantage of U.S.-based pharmaceutical companies, the Canadian dollar has strengthened, posing less incentive for drug reimportation.

"But we're still not seeing less importation," Dunne said.

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