Molecular
Targeted TherapyTranscript of CBS 60 Minutes
Prescriptions And Profit
March 14, 2004
It may come as no surprise that the pharmaceutical industry is the most
profitable business in the country. Americans pay far more for their
prescription drugs than citizens of any place on Earth.
It will also come as no surprise that as a political issue, the high price
of drugs has united both Republicans and Democrats. More than a million
Americans now buy their medications in Canada.
And it's no longer just older people taking buses across the border. Mayors
and governors from Minnesota to Alabama are helping Americans get Canadian
drugs by mail.
Such purchases are technically illegal. So far, the government has declined
to prosecute individual customers or the cities and states involved. But the
FDA - The Food and Drug Administration - has raised the specter of safety.
For more than a year, the FDA Commissioner, Dr. Mark McClellan, has been
waging a campaign against Canadian importation. The FDA has also issued a
serious warning that using Canadian drugs could be unsafe. Correspondent
Morley Safer reports.
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How unsafe? How common are the problems for drugs that people are buying in
Canada?
"Well, that's the problem. We don't know," says Dr. McClellan.
"Because we
don't have the authority to tell where these drugs have come from, or to
monitor closely how they're getting into the United States. And to make sure
that the drugs that come in are safe, it could be a widespread problem."
"That's a lot of hooey. There is no reason that buying drugs in Canada is
any less safe than buying them in the United States," says Dr. Marcia
Angell, who was executive editor of The New England Journal of Medicine for
11 years. She's currently writing a book on the secrets of the drug
industry.
"The people who say you have to worry about the safety of drugs from Canada
are imagining the way it was in the old days. That there's a moat around the
United States that drugs that are sold in the United States are made by only
American companies. And made in this country," says Angell.
"It's not that way anymore. Pfizer, for example, has 60 manufacturing sites
in 32 countries. So the drugs are made all over the world. They're sold all
over the world."
Most of Pfizer's anti-cholesterol drug Lipitor is made in Ireland. The same
Lipitor that's sold in both U.S. and Canadian pharmacies. Other familiar
drugs like Zocor, Nexium, and Prevacid are the same as the ones sold in
Canada. They're much cheaper there because the drug companies must abide by
Canadian government price controls.
Do the drug companies still make a profit?
"Oh, sure. Why else would they sell them in Canada? They're not charities.
Of course they make a profit," says Angell.
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The United States is the only industrialized country without some form of
control on the prices of drugs. The U.S. also accounts for more than half of
the industry's profits.
In order to keep those profits up, the drug companies have joined the FDA in
trying to shut down imports from Canada, and Canadian pharmacies are feeling
the pressure. In one pharmacy just over the border, Americans account for 30
percent of its business. They were nervous about having 60 Minutes mention
the actual name of the pharmacy.
"We've had several letters from the big multi-nationals, certainly
threatening to cut off the drug supply very explicitly if you are supplying
medications to U.S. patients," says the pharmacist.
This pharmacy supplies drugs to municipal workers in the city of
Springfield, Mass., through a program set up by former Springfield Mayor
Michael Albano.
"Major pharmaceutical companies are saying, 'We're going to limit our
supply.' What does that tell you? It tells you that they want to keep the
artificially high prices in America," says Albano. "How brazen is
that? It
just boggles my mind that they can get away with this."
When Albano was faced with a budget crunch last year, he had to lay off
firefighters, police officers, and teachers. By arranging for 3,000 city
employees, retirees, and family members to buy Canadian drugs, the city can
make substantial savings.
"We can save anywhere from $4 to $9 million on an annual basis if I get
everybody enrolled and everybody goes to Canada. And that's a huge amount of
money right now," says Albano. "If I can save $9 million for my city
and put
it back, redirect it back into police and fire and to public education,
it'll make a world of difference. So it's a huge savings."
Does he do it himself?
"I do it for my family's use. My son Mikey is diabetic. And we get his
insulin and related products for diabetes from Canada," says Albano, who
saves that saves his family $250 a year because there is no co-payment.
"And
it'll save the taxpayers who front 76 percent of the payment about $850 a
year. So it's a rather substantial savings for my family and for the
taxpayers of Springfield."
The FDA says importing drugs from Canada or buying drugs from Canada is
unsafe. Does Albano agree?
"The American public is not buying that safety issue. The fact is that it
is
getting insulting for the FDA to say that. I view myself as a responsible
father," says Albano. "And I could tell you that I would not let my
son
inject insulin into his body three times a day if I thought there was a
safety factor here."
Mayor Albano concedes that casually buying drugs on the Internet could be
risky, but says it was quite simple for him to check out his Canadian
supplier, and challenges the FDA to do the same thing.
"The FDA has become a pawn of the pharmaceutical industry, that they are
protecting those high profit margins. If the FDA wanted to put a plan
together similar to what we're doing in Springfield, that would be good for
all Americans, they can do it in 15 minutes, relative to safety," says
Albano.
"We get all our medications from certified, regulated pharmacies in Canada.
It's no different than going to your neighborhood pharmacy. And it's the
exact same medication."
So why can't the FDA insure the safety of products from Canadian
pharmaceutical exporters - and make sure that it's as safe as any product
leaving an American company?
"Under current law, we don't have the authority to insure the safety of
foreign produced, foreign distributed drugs," says McClellan.
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So what would motivate the FDA, which is not in the business of profiting
from drugs, to put out an alarm about Canadian drugs?
"The influence of the pharmaceutical industry on our government is huge.
And
the FDA is a part of the executive branch of the government. And this is
just the propaganda that's put out to do the drug company's bidding, to make
sure that Americans don't have access to cheaper drugs," says Angell.
"Because then they'll come to know what's going on. And what's going on is
that these drugs, while they're made by global companies all over the world,
are sold in this country for about double what they're sold for everywhere
else. And that they wanna keep secret."
"Our interest is in protecting and promoting the health of the
public," says
McClellan.
Of course, the whole controversy over Canadian drugs would be moot if
Republican Congressman Dan Burton of Indiana had his way. During the recent
debate over the Medicare bill, he co-sponsored a provision that would have
legalized bringing in Canadian drugs with safeguards.
But Burton says he ran into two brick walls: the drug industry and the U.S.
government: "This is a perfect example, in my opinion, of where a special
interest, the pharmaceutical industry, has been able to manipulate the
Congress and the government of the United States to their benefit, and to
the detriment of the American taxpayer and the American people."
Since 1999, the drug industry has given more than 45 million dollars in
political contributions, and it's spent hundreds of millions more on an army
of more than 600 lobbyists to work its will on Capitol Hill.
Congressman Burton says the new Medicare act makes it clear the industry got
its money's worth. He says billions of dollars are in it for drug companies
in this new Medicare Prescription Drug Benefit.
"In the new Medicare Act, the federal government is specifically prohibited
from negotiating prices with drug companies," says Safer.
"That is unconscionable. The government of the United States negotiates
prices in the Defense Department, in every area of government," says
Burton.
"And here we are, going to spend billions and billions and billions and
probably trillions of dollars on pharmaceutical products. And we cannot
negotiate the prices with the pharmaceutical industry. That's just not
right."
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In December, surrounded by members of Congress, President Bush signed the
new Medicare act. Since 1999, these legislators have accepted more than a
million and a half dollars in campaign contributions from people working in
the pharmaceutical industry. President Bush alone has received more than
half a million dollars.
But now, the new Medicare prescription drug benefit is being billed as a big
victory for America's seniors.
"You gotta be kidding me," says Burton. "Seniors, when they find
out what's
in that bill, are gonna be very angry. The problem is, they're not gonna
find out about it until after this next election."
The plan doesn't start until 2006. Does Burton think that will reduce the
attraction of importing drugs from Canada?
"Oh, I don't think so," says Burton. "Because even when you talk
about the
discount cards and the other things, you're gonna find that seniors are
gonna be paying, in many cases, more than they are paying for Canadian
imports right now."
60 Minutes contacted Bristol-Myers Squibb, Pfizer, Merck, Wyeth, Glaxo
SmithKline, and Eli Lilly. None of them would agree to be interviewed. Safer
asked Dr. Angell about the case the industry invariably makes to justify
drug prices.
"This is a kind of blackmail. What they're saying is, 'Don't mess with us.
Let us charge whatever we want for our drugs. Otherwise, you won't get the
miracles,'" says Angell. "And the truth is that they spend less in
R&D then
they make in profits. And far less then they spend on marketing. And they
don't make that many miracles in the first place . The problem is, is that
we're no longer getting our money's worth."
Adds Albano: "The pharmaceutical industry is gouging the American consumer.
There's no other conclusion one can draw. And why should we, in this
country, have to pay the highest prices in the world? Why isn't the
president doing something? Why isn't Congress doing something? Someone has
to wage this battle. So we're prepared to do it here."
Political pressure is building. Congress now plans to reconsider legislation
that would legalize Canadian drugs. As for Dr. Mark McClellan, he is leaving
the FDA and becoming President Bush's new head of Medicare and Medicaid.
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