that European governments will quickly
eficiaries to the average foreign price of drugs
approve it. Countries "facing tight budget
sold in Canada, France, Germany, Italy,
Japan, and the United Kingdom.125 Some
constraints will be more resistant to a given
price demanded by a company the higher they
state legislators have suggested limiting state
expect the demand for the product to be,"
prices to those charged in other countries,
according to Europe Economics.117 (More
particularly in Canada.
recently, the pharmaceutical industry has
In 2000, Congress passed legislation that
begun to take a more aggressive stance in
would have allowed reimportation from for-
fighting use and price controls in Europe.)118
eign markets of drugs originally produced in
the United States.126 Although President
The group Public Citizen claims that
European firms "still maintain robust R&D
Clinton signed the Medicine Equity and
activities, despite the price controls in the
Safety Act into law on October 28, 2000,
European market."119 Yet a 1992 study found
HHS Secretary Donna Shalala blocked
that countries with the lowest prices (due to
implementation of its reimportation provi-
price controls) yielded the least productive
sion the following December because she
drug research.120 U.S. R&D expenditures now
could not certify (as required by the legisla-
outstrip those in Europe, and American
tion) that reimported drugs would be safe
firms produce more new medicines.121 Over
and that the legislation would result in sig-
nificantly lower prices.127 Supporters of reim-
the last decade company investment has dou-
bled in Europe. Over the same period it quin-
portation returned to the issue during the
tupled in the United States.122
107th Congress, focusing on reimportation
American firms appear to be increasing
from Canada or other highly industrialized
their edge, something that has not gone
countries that would raise fewer concerns
over counterfeit or poor-quality imports.128
unnoticed in Europe. Reports David Pilling
of the Financial Times:
In July 2001, HHS Secretary Thompson reaf-
firmed the Shalala decision, and congres-
Companies that until recently were
sional efforts to enact revised versions of
considered glowing examples of
reimportation authority fell short.
European competitiveness are slipping
Reimportation policies for drug sales
behind their US competitors. By 2002,
would effectively apply foreign price controls
according to forecasts, only three of
on the American market. As Sen. Byron
the world's 25 top-selling drugs will be
Dorgan (D-N.D.) explains, "It is not my
made by Europeans. US companies
intention to have the American people go to
will account for no fewer than 20. Only
another country for their drugs. It is my
Unless someone
a decade ago, half of all top-selling
intention to force the pharmaceutical indus-
pays for the
drugs were European.123
try to reprice their drugs here in the United
development of
States."129 Representative Sanders is even
more explicit in saying, "it is likely that the
drugs, no one will
Reimportation--"Importing" Foreign
day after reimportation passes, the pharma-
develop them.
Price Controls
ceutical industry will lower their prices in the
Yet socialist Rep. Bernard Sanders (I-Vt.)
United States to the same level that they sell
their products worldwide."130
complains that "in Vermont and all over the
United States, alone among industrialized
As noted earlier, accurate comparisons of
nations, the drug companies can charge any
drug costs in different countries are difficult
price they want for their product--no matter
and rare, because drug price data reflect
what the consequence."124 Many legislators
other nations' relative wealth levels, their
at the federal and state level would change
fluctuating currency values, the degree to
that. For example, Rep. Tom Allen (D-Maine)
which their health care systems are politi-
would limit U.S. prices paid by Medicare ben-
cized and their drug prices regulated, their
13