Limiting drug supply unethical, congressmen say

Gil Gutknecht, a leader of the group and proponent of legalizing drug imports from Canada, said in an interview this week the ultimate solution to high drug prices in the United States is creating a free global market that would likely boost prices slightly in Canada and lower them in the United States…"It's really about pure, unvarnished profit. I'm a Republican. I believe that profit is a good word. But I believe that profiteer is a kind of ugly word…. This could adversely affect both Americans and Canadians."

National Post
November 10, 2003

Limiting drug supply unethical, congressmen say
Note to Attorney-General: 'This action is putting lives at risk in the U.S., Canada'
Tom Blackwell

Companies that limit drug supplies into Canada to prevent the medicine being sold back to the United States are at best unethical and at worst breaking the law, says one of several U.S. congressmen pushing for a federal investigation into the firms.

The manufacturers are risking the lives of Canadians and Americans and may be guilty of anti-trust violations, 22 members of the House of Representatives said in a recent letter to John Ashcroft, the U.S. Attorney-General.

Gil Gutknecht, a leader of the group and proponent of legalizing drug imports from Canada, said in an interview this week the ultimate solution to high drug prices in the United States is creating a free global market that would likely boost prices slightly in Canada and lower them in the United States.

But in the meantime, the manufacturers should not be restricting their shipments to Canada, he said.

"It may well be illegal; it certainly is unethical," said Rep. Gutknecht, who is from Minnesota.

"It's really about pure, unvarnished profit. I'm a Republican. I believe that profit is a good word. But I believe that profiteer is a kind of ugly word…. This could adversely affect both Americans and Canadians."

The letter from the congressmen said six companies have either begun or plan to limit the amount of drugs they ship into Canada, including Eli Lilly and Co., Pfizer Inc., GlaxoSmithKline PLC, AstraZeneca Plc, Merck & Co. and Wyeth.

"This action is putting lives at risk in the United States and Canada," says the note, which accuses the manufacturers of "illegally manipulating" supply.

No one in Mr. Ashcroft's office could be reached for comment.

But a spokesman for Eli Lilly said there was absolutely no merit to the legislators' argument, especially since importing drugs into the United States from Canada is itself illegal. The companies are just trying to protect patients and ensure the integrity of products that are being re-sold back to the United States in growing quantities, said Ed Sagebiel of the Indianapolis-based corporation.

A decision announced by Eli Lilly on Oct. 16 would limit supplies to Canada to the amount needed to serve the domestic market, based on past sales patterns.

A major study by the state of Illinois concluded there was no safety risk in importing medication from north of the border.

But Mr. Sagebiel said a sting operation by the Food And Drug Administration found drugs from Canada that had been mishandled during shipping, including insulin made inactive by exposure to heat, he said. One patient had a hyperglycemic episode after taking inactive Eli Lilly insulin imported from Canada, Mr. Sagebiel said.

The companies also need to maintain the prices set in the United States by free-market forces to continue funding research and development, since regulation keeps prices down in countries such as Canada.

"It's no mystery why almost every innovative drug comes from the U.S.," Mr. Sagebiel said.

"It's because you have a market-based solution that helps reward that innovation."

The cross-border, grey-market sale of prescription medicine has grown to about $1-billion and become a hot political topic in both countries. A growing number of U.S. politicians are pushing for free access to Canadian drugs as an antidote to American prices, the steepest in the world.

Health Canada has warned that the trade could lead to shortages here, while some pharmacists say that has already happened. Gilead Sciences Inc. of California is holding off broadly marketing a new HIV drug here as it tries to negotiate a Canadian price high enough to deter sales back into the United States.

Rep. Gutknecht spearheaded a bill, passed by the House of Representatives earlier this year, that would make the import of prescription drugs from Canada legal.

He acknowledged this week that buying drugs from Canada is not the long-term solution the United States needs. Nor does he favour price controls in the United States.

The only answer is to negotiate a free market throughout the industrialized world that would result in the same or similar prices for everyone, said the congressman.

"I think once markets do begin to work, you will see a levelling of prices and Canadians will probably pay a little bit more for their drugs. Americans will pay a lot less," Rep. Gutknecht said.

Those in the developing world should get medication at discounted prices, he said.

"But I don't think American consumers should have to subsidize the starving Swiss. It really is time for the Swiss and the Germans and the French to pay more of their fair share for the cost of these drugs.

"We [Americans] are by far and away the world's best customers. You don't have to be an economist from Wharton to realize that sooner or later, the world's best customers are going to demand at least equitable pricing."

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