Importation and prescription prices

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Robert Goldberg's June 27 Op-Ed column, "Stealing U.S. drug patents," accuses me and other members of Congress of aiding and abetting the piracy of U.S. patents because we support importation of prescription drugs. Nothing could be further from the truth.

The U.S. pharmaceutical industry is engaged in a behind-the-scenes effort to use U.S. bilateral trade agreements to obstruct Congress from legalizing imports of safe, FDA-approved, patent-protected drugs.

Allowing individuals, wholesalers and pharmacies to import these drugs would save overcharged Americans millions of dollars on their prescriptions. However, the suggestion that doing so supports Brazil's appallingly unethical plan to steal the patents of U.S. pharmaceutical companies — as Mr. Goldberg implies — is false.

The facts are these: The pharmaceutical industry knows Congress likely will change the patent laws to allow prescription-drug importation. Therefore, industry representatives sitting on an advisory panel persuaded the Office of the U.S. Trade Representative to include in the past three trade agreements — those negotiated with Australia, Morocco and Singapore — provisions that would enshrine in treaty the current U.S. law. That law prohibits importation of legitimate (not pirated) prescription drugs from those nations and others. The industry wants such language included in all future trade agreements.

The aim is to tie Congress' hands: If the House and Senate change the patent law to allow prescription-drug importation — thus lowering prescription prices — the United States then would be in violation of its trade agreements. Other countries could haul us into international trade court and subject our goods to fines and punitive tariffs — all because Congress wants U.S. consumers to pay the same prices for prescriptions that people in other countries pay.

An amendment I authored, which the House recently passed as part of a larger appropriations bill, blows the whistle on this underhanded maneuver. It would prevent the trade representative from including such language in any future trade agreements.

This is no arcane matter. Americans pay the highest prescription-drug prices in the world — 30 percent to 300 percent higher than abroad. Just across the border in Canada, for example, patients pay 50 percent to 80 percent less for the same brand-name drugs.

U.S. companies keep prices high through laws that prevent the importation (except by them) of the companies' own drugs. American patients — including the estimated 45 million with no health insurance — must bear for the entire world the cost burden of research and development of new lifesaving drugs. American taxpayers and businesses share this burden because pharmaceutical prices are a major factor in the rising costs of Medicare and private health care plans.

No other industry behaves like this. Say an American company makes car radios and sells them worldwide. Then assume a German automaker buys those radios and includes them in a popular roadster. The more Americans buy the German cars, the more radios the American company sells. Would the U.S. company ask Washington to ban the importation of the German cars because they included the American radios? Of course not. Yet the U.S. pharmaceutical industry, by blocking the importation of its own drugs, forces Americans to pay artificially high prices. I support free trade because it puts an end to such anti-competitive behavior.

Congress is about to change this unfair and unjust arrangement, and the pharmaceutical industry is petrified at the prospect. Working through the Office of the U.S. Trade Representative is the industry's fallback position in its increasingly frantic campaign to ward off such a move. First U.S. companies argued that medicines made overseas wouldn't be safe — but they themselves import $14.7 billion in drugs manufactured abroad in FDA-approved facilities. Then they argued that allowing individuals, wholesalers and pharmacies to import FDA-approved drugs — which would lower prices — would eliminate the funding for research and development of new drugs. Yet significant R&D work goes on outside the United States in countries without captive consumer bases.

Its arguments exhausted, the pharmaceutical industry has retreated to this covert strategy to block Congress from changing the law to allow the importation of FDA-approved drugs. Meanwhile, it sends out frontmen to confuse the public about what's going on by using fraudulent arguments such as the Brazil case.

Under the changes Congress contemplates, importing pirated "knockoffs" would still be illegal. In any case, the current law obviously is no guarantee against rogue nations such as Brazil.

I am not the pharmaceutical companies' enemy. They do essential work that saves millions of lives. I deplore the piracy of their patents and copyrights. I have voted to protect them from government price fixing and predatory class-action lawsuits that might result from vaccination campaigns.

However, this issue is not about patent protections. It's about the resale in the United States — at competitive, world-market prices — of legitimate, FDA-approved, patent-protected medicines. That's what's fair to the American consumer. And that's what free trade is all about.

Rep. Anne M. Northup, a Republican, represents Kentucky's 3rd District.