Yesterday, the Senate failed to pass an amendment to the health care bill that would have legalized importing prescription drugs from Canada, Australia, Japan, and Europe.  Due to price controls and government-negotiated rates, these countries all pay lower prices for prescription drugs than residents of the United States.  The Senate voted in favor of the amendment 51 to 48, but it would have required 60 votes to pass.  Both of Indiana’s Senators and Senator Joe Lieberman were among those who voted against the amendment.

The amendment was sponsored by Senator Byron Dorgan (D-ND).  According to the Congressional Budget Office, the amendment would have saved the government around $19 billion over the next decade, and consumers around $80 billion.  According to Dougan, a Nexium prescription costs $424 in the U.S., but only $36 in Spain.

Drug manufacturers and the head of the Food and Drug Administration (FDA) criticized the measure, saying that it would be difficult to guarantee that the imported drugs were safe.  However, a bigger reason for the amendment’s failure may be a deal made between the White House and the drug industry.  Earlier this year, drug manufacturers pledged to contribute $80 billion over the next decade to help reduce the Medicare coverage gap.  (The gap or “doughnut hole” occurs when people have drug costs between $2,700 and $6,100, when Medicare coverage can stop.)  According to internal memos, the White House agreed to oppose drug importation in exchange for the $80 billion drug deal.

This is not the first attempt to pass this amendment.  Dorgan has been trying to pass essentially the same legislation for over a decade.  In 2004, drug makers said that they would reduce shipments to countries that exported drugs to the U.S.  An analysis by the New York Times concluded that Canada and other countries would “clamp down” on shipments to the United States to avoid the threat of a drug shortage in their own countries. 

Sources & More Information

NY Times – White House Affirms Deal on Drug Cost

http://www.nytimes.com/2009/08/06/health/policy/06insure.html?_r=1

LA Times – Obama gives powerful drug lobby a seat at healthcare table

http://www.latimes.com/features/health/la-na-healthcare-pharma4-2009aug04,0,3660985.story

Washington Post – Obama Announces Agreement With Drug Companies

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/22/AR2009062200349.html

The Washington Independent – Senate Dems Protect Big Pharma

http://washingtonindependent.com/71047/senate-dems-protect-big-pharma

Wall Street Journal – Measure to Allow Drug Imports Fails

http://online.wsj.com/article/SB126093494955393151.html

NY Times – Importing Less Expensive Drugs Not Seen as Cure for U.S. Woes

http://www.nytimes.com/2004/10/16/business/16drug.html?pagewanted=print&position=

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