Report supports drug-import ban

Legalizing prescription drug imports would cost $3 billion a year to regulate, would reduce new drug research by undermining industry profits, and would not save Americans as much money as advocates claim, the Bush administration said yesterday.

The findings, representing the broadest indictment of importation yet published, were contained in a report completed by an administration task force that gathered evidence and convened hearings last spring.

Although it left open the possibility of commercial imports from Canada under tightly limited circumstances, the administration's findings reiterated its longstanding opposition to individual Internet sales from Canada and elsewhere, which it said are dangerous.

The report's release quickly hardened the battle lines over imports, which promise to be a major topic when the new Congress convenes next year. The pharmaceutical industry, through its lobbying arm, the Pharmaceutical Research and Manufacturers of America, lauded the study, which match arguments the industry has been making for two years. Opponents of imports in Congress also praised the report.

Advocates of imports quickly went on the attack. Republican US Representative Gil Gutknecht of Minnesota, a sponsor of legislation to legalize foreign prescriptions, questioned the report's findings in light of the Food and Drug Administration's approval of drugs that were later found to pose health dangers.

"More Americans have been injured by Vioxx than by taking these otherwise legal drugs from Canada, and they are spending all their time doing what?" Gutknecht said in a telephone interview yesterday. "Whom is the FDA protecting from who?"

The FDA has been engulfed in criticism in recent weeks and months over the withdrawal of Merck & Co.'s Vioxx and disclosure of health problems associated with Pfizer Inc.'s Celebrex. Both arthritis pain drugs have been on the market for five years, but the companies have now said they increase risk of heart attack and stroke.

In another blow to the drug industry, a study this week found that naproxen, the ingredient in the over-the-counter pain remedy Aleve, also posed health risks. The task force that wrote the report found that 10 million packages containing pharmaceuticals for individual American consumers entered the United States in 2003, about half of them from Canada. Under US law, those imports are illegal, but the FDA has an official policy of looking the other way for individual orders.

Task force members traveled to a mail warehouse at John F. Kennedy International Airport and were astonished at the volume of prescription drugs they saw, said US Surgeon General Richard H. Carmona, who chaired the task force. While acknowledging there have been no reports of Americans harmed by this vast flow of prescriptions, he said the dangers were obvious to the task force members.

"Clearly what we see is a great potential for harm to the public," Carmona said in a conference call with reporters. The report said the government has seized from the mail or observed drugs that were improperly labeled, improperly packed, withdrawn from the US market, require special handling or dosing, and drugs that have only been approved in other countries.

Another administration official who briefed reporters on the report yesterday, Undersecretary of Commerce Grant Aldonas, responding to a question about the quality of safety protections in the United States, said the FDA already has enough on its plate.

"We've got plenty of things that we need to focus on here at home," he said. "Trying to chase down thousands of Internet sites is not where we need to be focusing our attention."

In a letter to congressional leaders that accompanied the report, Secretary of Health and Human Services Tommy Thompson said Internet sales would be impossible. But he said the administration would consider imports from Canada to US wholesalers if a tightly controlled system were established. Those controls would include importing from a short list of drugs that would be identical to US drugs and contained in identical packages. Administration officials did not have a cost estimate for opening a commercial channel from Canada.

The practice of individuals importing prescriptions has exploded in the last four years as Americans without health insurance look for low-cost alternatives to skyrocketing US prices. They find savings in Canada and other countries with price controls of between 20 to 80 percent. The task force report, citing data provided by consulting firm IMS Health, said the value of drugs from Canada reached $700 million in 2003, with about half through the Internet and the other half from seniors crossing the border by car and bus to buy drugs.

The report portrayed the potential losses in pharmaceutical profits as potentially significant. Imports could result in the loss of four to 18 new drugs each decade, the report said.

And it said Americans may not be saving as much as advocates claim. By shopping for drugs or by choosing generics, they could save as much or more on drug bills, it said. Brand-name drugs from Internet pharmacies were 37 percent cheaper on average in Canada, but generics were 32 percent cheaper in the United States than they were in Canada, according to the study.

Furthermore, middlemen will soak up much of the savings in a legalized system, much as they do under so-called "parallel trade" throughout the European Union, the report said.

Christopher Rowland can be reached at crowland@globe.com.