Canadian Drug Imports: Why Bother?

By May 11, 2007Health Care, Trade

We’ve reasoned against legislation to allow importation of risky, priced-control foreign drugs because of safety and anti-competitive concerns — it’s not a good idea to punish the U.S. pharmaceutical industry so it abandons research — but hadn’t considered the other argument against the populist panacea: It’s a dumb idea that won’t work.

Well, Kimberly Strassel makes the case in much more elegant terms — not unexpectedly — in today’s Wall Street Journal’s Potomac Watch column, plus she cites empirical evidence (elegantly). State and local drug-importation schemes have been a bust, e.g. in Maine, Minnesota and Illinois.

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. Blagojevich 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.

Splendid model, which might conceivably work nationally if subsidized by the taxpayers and mandated by federal regulation. Conceivably…or perhaps the recent Senate debate was all about politics.

Excellent column. Read the whole thing.