We've said it before, but Kim Strassel says is best. Here's her excellent piece from today's edition of the Wall Street Journal.
Canadian Drugs, Eh?
Listen to Maine Sen. Olympia Snowe discuss importing drugs from Canada, and you'll hear endless happy talk about "more competitive prices," "substantial savings" and how "crucial" reimportation is to "the American consumer." What you won't hear Ms. Snowe mention much is the drug-import program of Portland, Maine.
Interesting that, since Portland was one of those cities that gained notoriety a few years back for defying federal law and setting up a Canada import program that it promised would save its thousands of city employees and their dependents a bundle on drugs. Three years in, it has attracted all of 350 participants.
That was also the flame-out fate of a statewide plan by Gov. John Baldacci to empower the Penobscot Indian Nation to build a distribution center to import price-controlled Canadian drugs for some 325,000 uninsured and underinsured Mainers. The tribe in February unceremoniously closed the program (which never got its hands on Canadian drugs, but morphed into a domestic mail-order business), having attracted just 3,000 Medicaid recipients.
Ditto, all across America. Three years ago, grandstanding governors and mayors vowed to break federal law and set up state-run drug import programs, giving millions of citizens the "opportunity" to buy cheap Canadian drugs. The media showered these souls with headlines, praised them for being on the side of poor, strapped U.S. consumers -- then forgot all about it. Today, most state-import programs are on life support, while some have closed completely. Never mind all Washington's hifalutin arguments about intellectual property, free trade and safety; the overwhelming majority of Americans appear to have little use for import programs that offer few drugs at long wait times, under suspect safety conditions and with minimal savings.
All of which helps explain this week's bizarre, and highly cynical, Senate votes on drug imports. Many of the very senators who supported or co-sponsored Ms. Snowe's amendment to change federal law and allow Canadian imports hail from states that have seen their own high-profile programs wither or die. That includes Wisconsin's Herb Kohl and Russ Feingold, Missouri's Claire McCaskill and Dick Durbin of Illinois.
These folks know firsthand that Canadian imports aren't really that popular and won't save much, if any, money. But they do like what this debate offers, namely the chance to bash U.S. pharma companies and to stand with "overcharged" U.S. consumers. The votes are more a sideshow, and it explains why some senators, who publicly support the easing of drug-import laws, also voted for a poison pill that gutted Ms. Snowe's amendment on safety concerns. It isn't as if masses of Canadian drug fans will come storming down their doors.
If anything, Portland is a success compared to the more high-profile state programs that got rolling in 2004. When Illinois Gov. Rod Blagojevich introduced his I-Save-RX program, which was initially joined by neighboring Wisconsin, he dramatically declared that "the nearly 13 million people who live in Illinois and the more than five million people who live in Wisconsin will have the opportunity to save hundreds -- and in some cases even thousands -- of dollars each year on the high cost of their medicine." Mr. Blagoevich spent nearly $1 million in taxpayer dollars developing it, including some 500 state workers from two dozen agencies who spent 5,600 hours flacking the program.
All this caused Illinois Auditor General William Holland to get curious about just how much benefit this wonder program was producing, and last fall he issued a stunning report. Over 19 months of operation, a grand total of 3,689 Illinois residents had used the program, which equals approximately 0.02% of the population. Results from the four other participating states were even more laughably dismal. Wisconsin had 321 people use the program; Kansas 267; Missouri 460; and Vermont 217. Mr. Holland also noted that the program was, er, illegal, and that the state had failed to implement quality control.
Things haven't been much rosier for Minnesota Gov. Tim Pawlenty, a Republican who felt it expedient to throw over the U.S. drug industry in favor of a few populist headlines. Mr. Pawlenty promised in 2003 that his Minnesota RxConnect program would serve some 700,000 people. A representative from Minnesota's department of human services explained to me this week that the state (conveniently) does not break out the number of people who use its program. But according to its latest statistics, Minnesota RxConnect last month filled a total of 138 prescriptions. That's for the whole state. Programs like those in Springfield, Mass., have simply closed.
Ask program administrators why so few people use Canadian imports, and they'll give you a frank, and long, list. Many consumers are wary about safety issues. They like having a relationship with a local pharmacist, and like knowing their drugs have undergone a U.S. quality check. Many drugs aren't available: that includes anything that needs to be taken immediately (antibiotics, for instance), or specialty drugs (such as injections for diabetics, which are hard to ship). It's also the case that many chronic diseases are today managed with generics, which remain cheaper in the U.S. Those that do use import programs tend to be a very small population that take maintenance drugs, say for high blood pressure, or cholesterol.
Perhaps an even bigger point is that huge numbers of Americans don't even pay for their drugs, but rather farm out their bills to an insurer. That's even more the case now that seniors are getting their drugs through Medicare. Joseph Bruno, the former Republican minority leader in Maine's legislature and now full-time CEO of a chain of pharmacies in that state, points out that 94.5% of his customers get prescriptions paid by a third party and so aren't price-sensitive.
"This is nothing but political posturing," he says of the U.S. Senate debate. He also notes that many of the infamous "bus trips" from Maine to Canada were in fact ginned up by labor unions that wanted to elevate drug prices into a political issue, and that successfully left the false impression that Americans were falling all over themselves for Canadian meds. "If you look at the numbers, that's just not the case."
Still, don't expect the political caterwauling over imports to go away any time soon. There's still too much political upside to talking up a program that few Americans really want to use.
Canadian Drugs, Eh?
Listen to Maine Sen. Olympia Snowe discuss importing drugs from Canada, and you'll hear endless happy talk about "more competitive prices," "substantial savings" and how "crucial" reimportation is to "the American consumer." What you won't hear Ms. Snowe mention much is the drug-import program of Portland, Maine.
Interesting that, since Portland was one of those cities that gained notoriety a few years back for defying federal law and setting up a Canada import program that it promised would save its thousands of city employees and their dependents a bundle on drugs. Three years in, it has attracted all of 350 participants.
That was also the flame-out fate of a statewide plan by Gov. John Baldacci to empower the Penobscot Indian Nation to build a distribution center to import price-controlled Canadian drugs for some 325,000 uninsured and underinsured Mainers. The tribe in February unceremoniously closed the program (which never got its hands on Canadian drugs, but morphed into a domestic mail-order business), having attracted just 3,000 Medicaid recipients.
Ditto, all across America. Three years ago, grandstanding governors and mayors vowed to break federal law and set up state-run drug import programs, giving millions of citizens the "opportunity" to buy cheap Canadian drugs. The media showered these souls with headlines, praised them for being on the side of poor, strapped U.S. consumers -- then forgot all about it. Today, most state-import programs are on life support, while some have closed completely. Never mind all Washington's hifalutin arguments about intellectual property, free trade and safety; the overwhelming majority of Americans appear to have little use for import programs that offer few drugs at long wait times, under suspect safety conditions and with minimal savings.
All of which helps explain this week's bizarre, and highly cynical, Senate votes on drug imports. Many of the very senators who supported or co-sponsored Ms. Snowe's amendment to change federal law and allow Canadian imports hail from states that have seen their own high-profile programs wither or die. That includes Wisconsin's Herb Kohl and Russ Feingold, Missouri's Claire McCaskill and Dick Durbin of Illinois.
These folks know firsthand that Canadian imports aren't really that popular and won't save much, if any, money. But they do like what this debate offers, namely the chance to bash U.S. pharma companies and to stand with "overcharged" U.S. consumers. The votes are more a sideshow, and it explains why some senators, who publicly support the easing of drug-import laws, also voted for a poison pill that gutted Ms. Snowe's amendment on safety concerns. It isn't as if masses of Canadian drug fans will come storming down their doors.
If anything, Portland is a success compared to the more high-profile state programs that got rolling in 2004. When Illinois Gov. Rod Blagojevich introduced his I-Save-RX program, which was initially joined by neighboring Wisconsin, he dramatically declared that "the nearly 13 million people who live in Illinois and the more than five million people who live in Wisconsin will have the opportunity to save hundreds -- and in some cases even thousands -- of dollars each year on the high cost of their medicine." Mr. Blagoevich spent nearly $1 million in taxpayer dollars developing it, including some 500 state workers from two dozen agencies who spent 5,600 hours flacking the program.
All this caused Illinois Auditor General William Holland to get curious about just how much benefit this wonder program was producing, and last fall he issued a stunning report. Over 19 months of operation, a grand total of 3,689 Illinois residents had used the program, which equals approximately 0.02% of the population. Results from the four other participating states were even more laughably dismal. Wisconsin had 321 people use the program; Kansas 267; Missouri 460; and Vermont 217. Mr. Holland also noted that the program was, er, illegal, and that the state had failed to implement quality control.
Things haven't been much rosier for Minnesota Gov. Tim Pawlenty, a Republican who felt it expedient to throw over the U.S. drug industry in favor of a few populist headlines. Mr. Pawlenty promised in 2003 that his Minnesota RxConnect program would serve some 700,000 people. A representative from Minnesota's department of human services explained to me this week that the state (conveniently) does not break out the number of people who use its program. But according to its latest statistics, Minnesota RxConnect last month filled a total of 138 prescriptions. That's for the whole state. Programs like those in Springfield, Mass., have simply closed.
Ask program administrators why so few people use Canadian imports, and they'll give you a frank, and long, list. Many consumers are wary about safety issues. They like having a relationship with a local pharmacist, and like knowing their drugs have undergone a U.S. quality check. Many drugs aren't available: that includes anything that needs to be taken immediately (antibiotics, for instance), or specialty drugs (such as injections for diabetics, which are hard to ship). It's also the case that many chronic diseases are today managed with generics, which remain cheaper in the U.S. Those that do use import programs tend to be a very small population that take maintenance drugs, say for high blood pressure, or cholesterol.
Perhaps an even bigger point is that huge numbers of Americans don't even pay for their drugs, but rather farm out their bills to an insurer. That's even more the case now that seniors are getting their drugs through Medicare. Joseph Bruno, the former Republican minority leader in Maine's legislature and now full-time CEO of a chain of pharmacies in that state, points out that 94.5% of his customers get prescriptions paid by a third party and so aren't price-sensitive.
"This is nothing but political posturing," he says of the U.S. Senate debate. He also notes that many of the infamous "bus trips" from Maine to Canada were in fact ginned up by labor unions that wanted to elevate drug prices into a political issue, and that successfully left the false impression that Americans were falling all over themselves for Canadian meds. "If you look at the numbers, that's just not the case."
Still, don't expect the political caterwauling over imports to go away any time soon. There's still too much political upside to talking up a program that few Americans really want to use.
