USA - HELPING THE DRUG INDUSTRY BY "SELLING OUT" U.S. FARMERS AND RANCHERS

Tom Curb, R.Ph.

The Australian Financial Review recently published a special report – "Washington is pushing Australia to water down the cost-effective Australian…medications system, and thus boost revenues for…drug companies. Part of that (US) pressure is the sudden emergence of the (Australian) Pharmaceutical Benefits Scheme (PBS) onto the agenda of the ongoing free trade negotiations (FTA) with the US.

The Australian government is negotiating an FTA so that Australian agricultural exporters can sell into the US market. If the Americans (US officials) agree to that, there will be a lot of unhappy US farmers, in which case, the Americans will want something in return. (Because) the US government has already received submissions from the US pharmaceutical companies calling for deregulation of drug pricing in Australia…the Australian government will come under pressure to reduce the effectiveness of the PBS."

This Australian argument is supported by a submission to Washington by the Pharmaceutical Research and Manufacturers of America (PhRMA) saying, "a reduction or elimination of barriers and distortions that directly relate to decreased market opportunities for US (drug) exports are of critical importance to the research-based pharmaceutical industry." In short, PhRMA is encouraging the US government to "sell out" struggling American farmers and ranchers so that the drug manufacturers – comprising the most profitable industry in America for each of the past ten years – can make even more money.

I have been a registered pharmacist for more than forty years. Based on extensive experience in retail pharmacy, institutional pharmacy, managed care pharmacy and pharmacy benefits management, I can say without qualm or qualification that the Australian equivalent of the American FDA makes the US drug regulatory system look like a tool of a third world dictatorship ruled by a paid-off despot.

For example: It is "policy of the Australian PBS to tie the price of a new drug to the lowest-priced medicine in the same therapeutic group, regardless of its patent status, and the Australian agency also seeks evidence that the new drug has demonstrable benefits. In addition, the Australian government… (places) heavy reliance on expert advice as to the benefits and value of new pharmaceuticals to minimize the cost (of new drugs) to the Australian public." This is sound public health policy by any standard.

In direct contrast, a recently published policy statement by the head of the US FDA emphasizes that "delays in approving drugs (in the US)…could be just as bad as letting a dangerous medication to market, and…the FDA won't consider the cost or cost-effectiveness of new drugs or devices in assessing them" - a stand that (as reported) would prompt a furious counterattack from (drug) manufacturers who say the agency has neither the authority nor expertise to do so.*

The Australian government’s policy demonstrates attention to responsibility and allegiance to its citizens rather than drug manufacturers, and the Australian drug program’s success is validated because "(drug) manufacturers’ prices of Australia’s top-selling drugs were at least 84% higher in the US and 48 to 51% higher in the UK, Canada, and Sweden." Yes - Americans pay more than twice as much for the same drugs as Australians do, and theUK, Canada, and Sweden pay 50% more!

The Australian’s pharmaceutical advisors’ contention (and it is correct) is that "(drug) prices are unrelated to the cost of development or the therapeutic worth of products and are, instead based on monopolistic profit maximization calculations, and that drug companies…price as a cartel. They (drug companies) do not compete on quality…they compete with each other on marketing."

If drug manufacturers get their way in this - US farmers and ranchers get less for their products; Australians pay more for their drugs; and drug manufacturers make more money. US consumers, as usual, will see no decrease in grocery bills – corporate processor, packer, and retailer profits will absorb any potential savings. Do I think the drug manufacturers will win? I am already selling out my "herd". For the first time in forty years, there are no domestic livestock on my land. Oh well, my pasture needed a rest anyway.

* Leila Abboud and Laurie McGinley, the Wall Street Journal, 4/16/03.