The panacea that is drug reimportation is finally getting its due. I’ve been wondering what the big hoopla is regarding “cheap” drugs from Canada and other foriegn nations. Sure, the Canadians and other countries use their monopolistic buying power to negotiate cheap prices from drug manufacturers, and some American consumers may be able to save significant dollars (barring a more significant decline of the US$) by piggybacking on those nations’ smart buying.
But on the whole, buying drugs from Canada is NOT an answer to the US drug cost inflation problem.
A just-published HHS study on the reimportation of drugs demonstrates that this “strategy” provides negligible savings.
Leaving aside the question of how a country that consumes 2% of the world’s pharmaceuticals can supply a nation that consumes over 50%, the real implication is clear – reimporting drugs is no solution. While it may be politically expedient, it is merely allowing US consumers to use the leverage of the Canadian government to buy drugs at a marginally lower cost.
Interestingly, the same US politicians that bought into the (at the time politically attractive) Medicare Drug bill also included provisions prohibiting the US government from negotiating with drug manufacturers. Thus, the politicians refused to allow the US government to employ the same “price lowering” tactics used by the Canadians, tactics that were delivering prices so attractive to voters that these politicians were in favor of allowing drug reimportation.
Have your cake, eat it too, and don’t get fat. Or in this case, please the big pharmas, protect the little guy, and thus preserve both campaign donations and votes. What a great country.
An excellent summary of the issues surrounding drug reimportation is provided by California HealthLine.

The HealthLawProf blog has an interesting post about the need for the FDA to set up an independent testing arm. The post opines positively about this idea and makes a solid case.
The blog cites a NYT article, and provides a good synopsis (brief and to the point).

The Agency for Healthcare Reseach and Quality (AHRQ), recently published a study examining hospital admission patterns. The study indicates that a significant percentage of admits could have been eliminated if the patient had received appropriate care earlier.
It will be no surprise to faithful readers that there is significant variation across geography, with rates highest in the west. AHRQ theorizes that this is due at least in part to the greater distances people in rural areas have to travel to seek care; thus preventing them from receiving care earlier in the disease process.
Poverty, rural locations, and diagnosis are also key variables influencing the “avoidable admit” rate. There was much more variation for chronic than for acute conditions:
“Among the 10 chronic conditions, differences in admission rates between the lowest and highest income communities range from 76 to 278 percent.”
The report notes significant cost implications –
“Potentially preventable hospitalizations are a significant issue with regard to both quality and cost. During the year 2000, nearly 5 million admissions to U.S. hospitals involved treatment for 1 or more of these conditions; the resulting cost was more than $26.5 billion.1 While some hospitalizations were likely inevitable, many might have been prevented if individuals had received high quality primary and preventive care. Identifying and reducing such avoidable hospitalizations could help alleviate the economic burden placed on the U.S. health care system. Assuming an average cost of $5,300 per admission, even a 5 percent decrease in the rate of potentially avoidable hospitalizations could result in a cost savings of more than $1.3 billion.”

Medpundit, a blog published by a practicing MD has an excellent and brief summary of the recent Celebrex news. The net is celebrex increases the risk of cardiovascular events significantly; and the higher the dose, the greater the risk increase.
While we can blame the FDA, the big pharmas, consumers, physicians, and the big bad wolf, our time will be much better spent learning from this fiasco.
Early lesson – stick with the proven meds, which in this case are Tylenol et al, and ibuprofen et al. They have the benefit of much lower cost, very similar outcomes, and a much longer track record.

The Global Medical Forum held their 2004 US Summit in Washington DC last week, focusing on the different systems’ approaches to health technology. Building on the 2003 Summit’s focus on Pharmaceuticals, the presentations provided compelling insights into the ways technology is reviewed, adopted, and reimbursed in the EU.
Some of the more intriguing points included:
—the evaluation process tends to be much longer in the EU than in the US, and involves stakeholders from the patient, provider, hospital, and governmental communities
—in Germany, this process includes consideration of appropriate reimbursement amounts (contrast this w the US “we approve, you pay” methodology)
—cost-effectiveness is absolutely a consideration when reviewing new technology for possible reimbursement
—in Germany, only 20% of new health care technology applications are accepted..
I left with several other impressions and “take-aways”. First, the EU relies, to a surprising degree, on US health care data when evaluating their own situation or projecting into the future. Second, the evaluation of the cost-effectiveness of a specific technology makes a lot of sense, and is done rather well by the Germans. Third, in Great Britain’s much-maligned National Health System, there is surprising (at least to me) willingness to consider new technology, and to pay for expensive evaluations of same.
We can learn quite a bit from our colleagues in the EU. Health care systems in the EU tend to deliver excellent care for a lot less money than we do here in the US.
Paradoxically, I heard from several European experts that they see real value in some of the components and attributes of our system. For example, we are much better at collecting, analyzing, and using data.

Health care cost increases, which appeared to be moderating last year, appear to be stepping on the accelerator again. The Center for Studying Health System Change’s recent analysis indicates that health care costs continue to grow much faster than either overall inflation rates, or, more importantly, worker incomes.
CSHC’s analysis indicates that hospital price increases are one of the key factors driving health cost inflation, with prescription drug costs continuing to accelerate as well.
CSHC’s analysis and review of the numbers forecasts the impact of continued inflation, noting :
“Health care costs likely will continue to grow faster than workers’ income for the foreseeable future, leading to greater numbers of uninsured Americans and raising the stakes for policy makers to initiate effective cost-containment policies or accept the current trend of rapidly growing health care costs and gradually shrinking health coverage.”
With the number of uninsured exceeding 45 million by most counts, 18% of the non-Medicare population is now uninsured. This compares to an uninsured rate of 0.1% in Germany, a country with health care costs as a percentage of GDP some 50% less than ours.

I live in Madison, Conn., a town of some 18,000 located between New Haven and Old Saybrook on the Connecticut shoreline. Madison is a pretty well-off place; schools are excellent, services good, and government responsive.
To fulfill my civic responsibility, I have been working on a couple of projects with the Superintedent of Schools, a very professional, and very capable, woman. Of late, the topic of interest has been health care. Madison has some 550 employees, including teachers, administrators, police, and town office staff. Most of these employees are covered under one of another union-negotiated health plan, and all get great (read “expensive”) health benefits.
The Town is now in negotiations with the unions on new contracts, which will include health insurance coverage. The contracts will run for three years, and benefits are fixed for that period.
Here’s the issue. Costs are around $7000 per employee per year, and increasing over 12% per year.
Think about that. Costs will be $14,000 per employee in 5 years, and $28,000 in 10. That is not a long way off.
These increases are simply unsustainable. Like many others, I have been predicting we would finally reach a point where we could not afford health insurance. Clearly, for the taxpayers of Madison, that point will be reached in the next ten years.