Therapeutic Dose: At What Cost Quality?

Domestically manufactured drugs bearing FDA approval are facing stiff competition from less costly Canadian pharmaceuticals

The U.S. has long laid claim to the safest, highest quality drug supply in the world. Indeed, under the aegis of the 65-year-old Food, Drug and Cosmetic Act, the pharmaceutical industry and the U.S. Food and Drug Administration have labored long and hard to build an extensive closed system of drug manufacture and supply that is the envy of the world.

Today, however, that system is under attack, and spiraling price disparities in the U.S. relative to other countries are to blame. Even as I write this column from the northwest suburbs of Chicago, Illinois Governor Rod Blagojevich remains in a pitched battle with the FDA and the pharmaceutical industry to import drugs from Canada and Ireland. Other states and now even the Mayor of Washington, D.C., are exploring similar steps.

Central to the FDA’s case against imported drugs is its mandate to ensure the safety and efficacy of the U.S. drug supply. William K. Hubbard, FDA associate commissioner for policy and planning, made the case clearly in a recent letter to Rhode Island Governor Donald Carcieri.

“When involved in shipping prescription drugs to consumers in the U.S.,” Hubbard wrote, “businesses and individuals must ensure, among other things, that they sell only FDA-approved drugs that comply with FDA standards in all respects, including manufacturing location, formulation, source and specifications of active ingredients, processing methods, manufacturing controls, container/closure systems and appearance…

"We are particularly concerned that the state’s endorsement of such pharmacies would give Rhode Island residents a false sense of safety in the drugs dispensed from abroad when, in fact, neither FDA nor the state would be able to assure their safety or effectiveness."

Most Americans, I believe, would be willing to pay more for drugs with the FDA’s seal of approval. But the critical question is how much more? Sure, drugs that are manufactured in line with cGMP standards, in facilities that meet the FDA’s validation guidelines, will likely be more expensive. But should those drugs cost two or three times as much as well-publicized foreign-made drugs that are superficially comparable?

Accusations of greed and price-gouging leveled at pharmaceutical companies are only likely to intensify, and no amount of lobbying appears likely to derail popular sentiment. Indeed, in a recent poll of Pharmaceutical Manufacturing readers on our website, a full 88% of respondents believe that if the current situation continues, increased government intervention or price controls are likely.

Unless industry can compose a more cogent rationale for price discrepancies between the U.S. and other countries based, in part, on true manufacturing cost differentials to ensure safety and quality, the task will be out of our hands for good.

Keith Larson, Editorial Director
klarson@putman.net

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