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Remember how the reimportation of prescription drugs from Canada to the United States was going to bring down the cost of drugs?
Indeed, over the past few years, an increasing number of individuals and public entities turned to Canada because prescription drugs there, due to price controls, can cost a lot less than drugs in the United States.
But now, the reimportation drive is fading. As we recently reported, Springfield, Mass., which in 2003 became one of the first cities to implement a program to allow its employees and retirees to reimport drugs from Canada, now is pulling the plug on that program and will instead join a statewide benefits program that does not have a reimportation component.
At the same time, participation in programs set up by other public entities, such as Westchester, N.Y., has been much less than initially expected.
We are not surprised that the reimportation drive is faltering. In the first place, it is illegal for anyone other than the original manufacturer to reimport prescription drugs into the United States. That potential exposure to liability would make most employers reluctant to get involved in such programs.
Secondly, concerns that some of the drugs being reimported were counterfeit also caused U.S. purchasers to back away, as did stepped-up confiscation of the drugs by U.S. customs officials. Obviously, prescription drug purchasers would be more reticent to obtain drugs from a source knowing that the supply was not reliable and, as a result, they might not receive their prescriptions when needed.
Just as important, there is much less need to reimport drugs than there was a few years ago. For starters, millions of elderly Americans now have prescription drug coverage due to the expansion of Medicare.
Additionally, several hugely expensive and widely used drugs now are available as low cost generics, making moot the need to obtain the drugs outside the United States.
Still, there is plenty that needs to be done to keep prescription drug costs manageable. Employers have to continue to examine plan designs to ensure that employees have sufficient incentives to purchase generics rather than more expensive brand-name products. And the federal government has to act if brand name manufacturers are unfairly preventing the entry into the market of lower-cost generics.