Cheaper north of the border

Miami Herald: As Congress works on fashioning a Medicare prescription-drug benefit, some cities and states are considering a more-direct route to lower costs -- Canada. The fact that growing numbers of government leaders are willing to defy the law in search of relief from soaring drug costs is a sign of desperation. That they're unwilling to wait for Congress to pass a drug-benefit bill, which now is in conference committee, is a vote of no confidence in Congress' approach.
Indeed, there isn't much in the benefits bill that inspires confidence. Yet the measure, at a cost of $400 billion over 10 years, would be the biggest expansion of Medicare in history. No one should fret that the House and Senate conferees are stuck on whether to allow private insurers to compete in government-run Medicare. After all, the bill is a hodgepodge of complexity and coverage gaps. The most significant change would be to shift the cost of coverage to the young and future generations from today's elderly users -- hardly a reason to encourage its passage.
Meanwhile, the mayor of Springfield, Mass., has offered city employees and retirees a plan to buy drugs from Canada, at prices up to 80 percent less than U.S. prices. Springfield has saved $600,000 since July, and the mayor predicts that the city could cut its $18 million annual drug bill in half. Governors in Illinois, Minnesota and Massachusetts are exploring similar options.
FDA opposition
The Food and Drug Administration adamantly opposes the Canadian option and says that it cannot ensure the safety of drugs purchased there. The FDA warns ominously that the drugs may be outdated, counterfeit or may not be authentic. FDA protestations ring hollow, though, for Canada's drugs are manufactured by the same companies that supply the U.S. market. The difference is that the Canadian government provides national health care for its residents, buys drugs in bulk and regulates the prices.
Even if U.S. cities and states find a legal bypass around the FDA ban on re-importing drugs, the Canada option isn't likely to be a permanent solution to high drug costs. The drug companies easily could restrict Canadian supplies to drive up prices.
The pharmaceutical companies justify their soaring prices, in part, because of the high cost of research and development. They seldom mention the tens of millions of dollars spent in recent years on lobbying politicians and a broad marketing campaign that pitches expensive new drugs directly to consumers, bypassing doctors who are trained to determine the drugs' suitability for their patients.
Yet Congress has scarcely given a thought to these cost escalators. If Congress can't create a system to keep prices down, it should at least open up the domestic market to competition from abroad.