[Pharm-policy] PhRMA lobbying on parallel imports

[James Love]

Wall Street Journal
July 11, 2001
Pharmaceuticals Industry Pushes
House to Defeat Drug Legislation
By SARAH LUECK 
Staff Reporter of THE WALL STREET JOURNAL


WASHINGTON -- The pharmaceuticals industry has
launched an intensive lobbying campaign to derail
legislation, coming up in the House Wednesday, that
would allow pharmacies and wholesalers to import
cheaper prescription drugs.

In a boost to the drug industry's efforts, Health and
Human Services Secretary Tommy Thompson said Tuesday
in a letter to lawmakers that a similar measure, that
was passed last year but never implemented, would
increase safety problems and wouldn't necessarily save
consumers money.

Drug-industry lobbyists in recent weeks have urged
House members to oppose an appropriations-bill
amendment that would allow entities other than the
drug makers to import U.S.-approved drugs from foreign
countries where prices are lower -- a system known as
reimportation. An industry group, Pharmaceutical
Research and Manufcturers of America, or PhRMA, joined
some patient groups to contend that the new system
would expose people to counterfeit, ineffective and
dangerous drugs.

"This is war -- nothing less," said Steve Jenning, a
drug lobbyist. "This is a significant problem for
industry and consumers."

The amendment, to be offered by Rep. Bernard Sanders
(Vt.), is similar to one Congress passed last year,
which was a blow to the drug industry. But the
legislation never took effect because former HHS
Secretary Donna Shalala, like Mr. Thompson, said she
couldn't certify the new system would be safe and save
people money.

This year, the industry was better prepared to fight
the amendment, and it adjusted its tactics. At a House
subcommittee hearing last month, security experts from
several drug companies testified about counterfeit
drugs coming to the U.S. from foreign countries. Last
year, the industry balked at publicizing problems with
the drug supply, worrying that they might scare
consumers. But it seemed to be an effective move.
Members of Congress who backed reimportation,
including Rep. Peter Deutsch (D., Fla.) began to
support legislation with more safeguards after the
hearings.

"They were really blown away by what they heard," said
Ian Spatz, a lobbyist for drug maker Merck & Co.

Also in the reimportation opponents' favor: This isn't
an election year. Last summer, members of Congress
were under pressure to back the amendment to show
voters they were serious about lowering the cost of
prescription drugs.

But Mr. Sanders and his supporters have their own
weapons, as they cast the reimportation measure as a
way to stand up to an industry that is making huge
profits. Tuesday, consumer group Families USA released
a report showing the profit margins for the nine
companies in the study were four times the average of
Fortune 500 companies. Also published in the report
were the millions of dollars in salaries and stock
options paid to the chief executives of the companies.

Mr. Sanders said the report showed American consumers
are paying for "exorbitant profits, bloated
administrative overhead and obscenely high executive
salaries" -- not research and development costs, as
the drug industry has argued.

Drug-industry group PhRMA said, "When the
pharmaceutical industry does well, patients do even
better."

Write to Sarah Lueck at sarah.lueck@wsj.com