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 Why
buying Canadian won't hurt
pharma or biotech industries
by John Burton,
President, pro temp
California Senate
There
has been increasing talk about a threat to the biotech industry if
California
and other governments facilitate the
importation of cheaper drugs from Canada
.
A
clue to this development comes in a news report noting "18,000
executives, lobbyists and scientists (were) expected to show up"
for this week's biotech conference in
San Francisco
. Somehow, I think if the scientists came
first and the lobbyists were left out, we probably wouldn't be hearing
about this. It's true that
California
, like
Illinois
,
Oregon
,
Minnesota
,
Wisconsin
,
Boston
and others, are looking at Canadian drugs in
response to pressure from constituents to do something about
outrageously high drug prices. According to the Kaiser Family
Foundation, prescription drug spending in the
United States
tripled between 1990 and 2001 and has grown
at double-digit rates for the last seven years.
At
the same time, recent expenditure reports for top pharmaceutical
companies show CEO compensation packages ranging from $23.9 million to
$150.9 million. That was for one year.
California
's drug importation package is a modest one.
My bill, SB1144, simply requires the Department of General Services,
after receiving the appropriate waiver from the federal government, to
include Canadian sources when shopping for the best price for the drugs
it purchases for state prisons and hospitals. This could save up to $30
million a year. When you look at the executive-compensation levels, it
is pretty clear our proposal isn't going to break anyone.
Among
the other legislation
California
lawmakers are looking at are bills to help
consumers who are going to buy Canadian drugs anyway (and a million of
them do, nationwide) and get them safely by having a Web site list safe
sources.
The
pharmaceutical industry is facing growing skepticism on its safety
claims regarding Canadian drugs (I don't see a ton of bodies piling up
over the border due to bad drugs, and if foreign quality control is such
a concern, I assume Pfizer will be moving its Lipitor plant here from
Ireland posthaste). So the industry is now shifting its anti-importation
focus to the potential harm to the biotech industry's research and
development. The only way for companies to do research and development
is to rip off consumers? That's like saying the only way Willie Sutton
could make money is by robbing banks. A recent study from
Boston
University
suggests importation of less expensive pills
would help the pharmaceutical industry, because people who are now
skipping pills, or splitting pills, or just not filling prescriptions
would become full consumers.
California
's support for the biotech industry has proof
not so much in the pudding as in the more than $600 million in R&D
and investment tax credits biotech companies have used since 1990 and in
the publicly funded research done by the
University
of
California
at its campuses, medical centers, national
laboratories and Institutes for Science and Innovation. UC faculty and
graduates have founded 1 in 3 biotech firms in California and 85 percent
of California biotech companies have UC-trained scientists and engineers
in key R&D positions.
California
has also taken the lead in protecting biotech companies' ability to
conduct stem-call research. After President Bush's misguided sop to
religious fundamentalists by limiting funding and access for research,
California passed laws to ensure our industry can perform this research.
We've also just placed on the ballot a bond measure that could provide
$3 billion for stem-cell research.
There
are challenges to the biotech industry that must be addressed -- keeping
UC at world-class quality; producing a workforce suited for the
industry; improving transportation and access to affordable housing.
These are the areas biotech leaders should be pushing -- and partnering
with government officials -- to solve.
There
is also a threat to biotech, the source of so much product for the
pharmaceutical industry, if it allows itself to be used as the front for
maintaining an out-of-whack system of pricing and profiteering. From
what we are hearing from our constituents, public anger over drug prices
is reaching Proposition 13 levels. Not relieving this pressure could
mean a forced solution down the road far less palatable than perhaps
lowering prices by cutting back on some of the omnipresent
ads or by setting compensation at mega- rich instead of filthy-rich
levels.
We're
in a time of tough choices when governments are looking to save
taxpayers' money and consumers are looking to save their families money
-- even if it means looking to
Canada
. I would think an industry inspired enough
to sequence the human genome should also be able to help ensure that
consumers can afford its innovations.
Sen.
John Burton, D-San Francisco, is president pro tem of the
California
Senate.
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