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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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September 28, 2004

Kicking the Dinosaur's Tail - Again

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Posted by Derek

Economist Mark Kleiman, in a clearheaded post on drug reimportation, says:

"No doubt, the politicians who are campaigning to permit pharmaceutical arbitrage are demagoging the issue by failing to mention the impact on innovation. But at least the argument they make – that allowing arbitrage would reduce prices to consumers – is more or less correct, and actually expresses their goal. The politicians who oppose arbitrage, by contrast -- including the Bush Administration -- largely try to hide behind the “safety” fig-leaf. That’s an insult to the intelligence of the voters."

Oh, yes indeed. My readers know that I've been banging on that particular washtub for a long time now, much good has it done. Here we go again, once more with feeling, from someone who works right here in the drug industry:

Canadian pharmaceuticals are safe. They're just as safe as ours. The reasons that reimporting them is a bad idea are economic ones. We need the money, and we've turned the US into the only place we can make it.

A more, um, detailed presentation of that point of view (from a passel of economists) can be found here. But the politics of the problem aren't in need of expert explication. Opponents of drug reimporation are trying to beat something (cheap drugs!) with nothing (no cheap drugs!) That's always a tough sell, so they - I can't bring myself to use the pronoun "we" - are trying to use irrelevant scare tactics instead. People are catching on

I think you can win a few short-term battles that way, at the cost of most surely losing the war. As I keep saying, the safety argument is one that can be addressed. As it will be, and where will my industry be then? Left wiping sweat from its forehead, stammering "But. . .but. . .there's actually another reason why this won't work. . ."

It'll be too late. The industry whose efforts I have devoted my adult working life to, the one that feeds my kids and keeps a roof over my head, is happily strapping itself to a barrel. It's making double-sure that the knots are firm and the cords are tight. The waterfall makes an awful, awful noise. . .

Comments (3) + TrackBacks (0) | Category: Drug Prices


1. The Novice Chemist on September 28, 2004 11:19 PM writes...

Sitting around the group room table the other day, I actually came up with a pretty effective way to make money off of re-importation. It will only take a few counterfeiting cases (drugs labeled as such actually being placebos, etc.) before the re-importing public will be freaking out. That's where my idea comes in...

Mall kiosks (large ones, about the size of one of those jewelry repair shops), clear glass with white-lab-coated techs. Bring your re-imported tablets in, we'll run GC-MS, HPLC (whatever you want, for a price) on them and confirm their identities for you. Yes, ma'am, we'll check each and every tablet. That'll be 2 dollars per tablet, please.

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2. Jim Ancona on September 29, 2004 9:32 AM writes...

It seems to me that the reimportation problem is overblown. Here's why: If reimporting takes off, pharma companies are going to see a spike in Canadian demand. At that point they will threaten to limit supplies to Canada. The Canadian government will have three options:

1. Do nothing. Prices rise to Canadian consumers.
2. Break patents. This risks a trade war with their largest trading partner, the US.
3. Forbid re-export of drugs back to the US.

Number 3 seems like a no-brainer. The only people who get hurt are US consumers (who don't vote in Canada) and a few opportunistic mail-order pharmacies.

What am I missing?

The same analysis would seem to apply to any country that is a possible source for reimported drugs except for those without good control of their borders, like Mexico. And places like Mexico are precisely where quality issues are likely to be real.

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3. Derek Lowe on September 29, 2004 10:58 AM writes...

Jim, what I worry about is something like a further attempt to forbid the drug companies from limiting supplies. I think that the political benefits of being the Bringers Of Cheap Drugs will sweep other considerations aside once things really get going. Then we start in on price controls here in the US. . .

I think that the industry has painted itself into a corner by allowing other countries to lower their regulated prices so much, under the assumption that we could always make it up in the US. We're going to have to switch to a new, more painful business model eventually - I just hope it isn't all at once.

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