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Dems, GOP Support New Bill to Allow Lower-Cost Drugs From Canada

Americans could save billions of dollars

Once again, a bipartisan group of senators is attempting to give American consumers and pharmacies the right to import lower-cost prescription drugs from abroad, with a new focus on safety issues, which derailed similar legislation in the past.

Introduced by Sens. Olympia Snowe (R-Maine) and Debbie Stabenow (D-Mich.), the new bill is cosponsored by leading senators on both sides of the aisle, including John McCain (R-Ariz.), Chuck Grassley (R-Iowa), John Kerry (D-Mass.) and Sherrod Brown (D-Ohio). AARP announced its support for the bill yesterday.

"For years, Michigan families have been forced to pay outrageous costs or cross into Canada to get reasonably priced prescriptions," Stabenow said in a statement. "The fact that the exact same FDA-approved drugs are a fraction of the price in Ontario defies common sense."

Over the past decade millions of Americans have ignored U.S. law to seek cheaper prices from Canada, most often by mail order. Currently, for example, the price for a 30-day supply of Lipitor 20 mg, widely used for high cholesterol, is $156.41 through the mail-order pharmacy of the American company CostCo, compared with $48.20 to $69.86 from licensed online pharmacies in Canada and some other countries, according to a price-comparison website.

AARP's latest Rx Price Watch report found American retail prices for the most widely used brand-name drugs jumped by 8.3 percent in 2009, when the general inflation rate fell by 0.3 percent.

"With drug prices continuing to substantially outpace inflation, it's more important than ever to do whatever we can to keep drugs available and affordable," says AARP Senior Vice President John Rother. "That includes making sure that Americans are not paying much higher prices than the rest of the world."

The new bill would permit pharmacies and registered wholesalers to buy drugs from Canada and other selected countries, opening the way for health insurance companies and government programs like Medicare and Medicaid to lower their drug costs. The Congressional Budget Office estimated that a similar bill introduced last year would save federal taxpayers more than $19 billion.

Medications at half the cost

This means that consumers could not only legally import drugs for their own use but also buy them from their local pharmacies at prices estimated by the bill's sponsors to be 35 to 55 percent lower than they are now.

Legislation to legalize drug importation has been signed into law twice previously, during the presidencies of Bill Clinton and George W. Bush. But they never went into effect because the health secretaries in those administrations declined to guarantee the safety of imported drugs as each law required.

The new bill proposes more ways to ensure the safety of imported drugs. They include allowing imports only from FDA-inspected manufacturing plants in specific industrialized countries that have tough safety standards, requiring tamperproof packaging, and enforcing rules to verify the "chain of custody" — all the stages a drug goes through between manufacturer and consumer.

The bill also includes measures to prevent pharmaceutical companies from impeding importation, as some have done in recent years by cutting off supplies to Canadian pharmacies that sold lower-cost drugs to Americans.

Even if this legislation passes the Senate, its fate would be uncertain in the House, experts say. Previous drug importation bills have fallen to parliamentary procedures or political maneuvering. A bill very similar to the current one, introduced by then-Senator Byron Dorgan (D-N.D.) in 2009, was attached as an amendment to health care reform legislation, but failed to garner the 60 votes needed to overcome a filibuster.

Patricia Barry is a senior editor at the AARP Bulletin.