By Matt Taibbi
Amidst all the angst and acrimony of last year’s trench-warfare presidential campaign, there was one area in which the two major-party candidates purported to agree. Both Hillary Clinton and Donald Trump favored allowing the importation of cheap drugs from Canada.
Drug reimportation would be a no-brainer policy move if actual human beings ran our government. Disgust with high prescription drug prices is nearly universal – 77 percent say drug prices are “unreasonable” – and 71 percent of respondents favor allowing the importation of cheaper drugs from Canada.
The entire pharmaceutical industry is floated by a protectionist racket. Drugs that are in fact very cheap to make are kept artificially expensive – we have drugs that cost $1,000 a pill here in America that sell for $4 in India, for instance.
The means of keeping prices high vary, but include lengthy patents to push production of generics into the future, the barring of foreign competition (usually on “safety” grounds), and the prohibition of negotiations to lower prices for bulk purchases by both the federal and state governments. Without government intervention, the pharmaceutical industry would be profitable, but it wouldn’t be the massive cash factory it is now. In 2015, for instance, the 20 largest drug companies made a collective $124 billion in profits.
All the industry needs to protect those sums is the continued cooperation of Congress.
So naturally it spends money – not a lot by industry standards, but a ton by the standards of the ludicrously cheap dates we call federal politicians – to make sure they always have just enough dependable people in office to block change.
Which brings us back to drug importation. Trump announced early in the race that he was in favor of bringing in cheaper drugs from Canada and made it a big stump theme. I remember in New Hampshire last year listening to Trump ridicule Jeb Bush for having a Big Pharma honcho as his campaign finance chairman.
“The head of Johnson and Johnson [Woody Johnson] is Jeb Bush’s top fundraiser,” Trump crowed. “Do you think Jeb Bush is going to make drug prices competitive?”
Trump continued this theme throughout his candidacy. He said “allowing consumers access to imported, safe and dependable drugs from overseas will bring more options.” Even after the election, in December, Trump sent pharma stocks tumbling when he vowed in Time to “bring down drug prices.”
The Democrats, meanwhile, put allowing importation of drugs from countries like Canada in their platform last summer. There were some ominous caveats in the language (“with appropriate safety protections”), but Clinton seemed to make bringing pharmaceutical prices down a priority in her rhetoric as the campaign progressed.
Along with scandals like the furor over drugmaker Mylan’s EpiPen – a lifesaving injection for sufferers of severe allergies, often children, that was being sold for an outrageous $630 a pop – the seeming synergy of the two candidates’ positions led to the hope that something might actually be done about the problem, no matter who won.
No such luck. Trump’s support for drug importation basically went up in smoke from the moment he started filling out his executive appointees. Virtually every Trump nominee who would have influence over the importation question was bluntly opposed to the idea.
His FDA chief, Scott Gottlieb, was not only against importation, he’d written a Forbes editorial in 2016 denouncing then-candidate Trump’s position on the issue. Trump’s Health and Human Services chief, Tom Price, also has a long history of supporting pharmaceutical industry initiatives. Price’s former press secretary, Ellen Carmichael, is now president of a political research firm called the Lafayette Company and just a few weeks ago was penning an anti-importation editorial reprinted by the Partnership for Safe Medicines, a leading industry group lobbying against reform.
Back in January, Sens. Bernie Sanders and Amy Klobuchar introduced an amendment to a budget resolution that would have paved the way for drug importation. Twelve Republicans, including John McCain, Rand Paul and Lisa Murkowski, voted for it. But the measure died when thirteen Democrats voted no.
Social media slammed the 13 Dems, who included Mark Warner of Virginia, Chris Coons of Delaware, and Cory Booker and Bob Menendez in New Jersey (a New Jersey senator voting against big pharma is as rare as an Iowan voting against ethanol, which makes it more notable that Booker later came around on the issue). Many of those senators had supported alternative plans that, they said, better addressed the issue that really concerned them: safety. One by one, each of the 13 Democrats insisted that they liked the importation idea in general, but were too concerned about foreign poisons to vote yes.
A Coons spokesperson said the Sanders-Klobuchar amendment “didn’t meet the safety standards he believes are necessary.” Booker said he wanted to “ensure foreign drugs meet American safety standards.” And so on.
But we already do import foreign drugs, and have an established safety certification process. In fact, an astonishing 40 percent of all pharmaceuticals sold in the United States are already imported, as are 80 percent of the chemical ingredients. These imported drugs and drug ingredients arrive by way of more than 300,000 foreign food and drug manufacturing facilities that are regularly certified as safe by the FDA.
These drugs come from manufacturing facilities not just in Canada but across the globe, from the first world to the third, sometimes using the same kind of degraded and underpaid labor forces we bemoan in other industries.
The only difference is that at the moment, the only entities that are allowed to benefit from these foreign imports are drug companies. The important ban only applies to pharmacists and consumers.
That’s why the pharmaceutical industry works so tirelessly to keep Congress captured. It’s not just to protect its many forms of federal subsidy, but also to keep customers and retailers from benefitting from the same money-saving overseas shopping in which they engage.
The controversy over the January fiasco led to hand-wringing within the Democratic Party. Minority leader Chuck Schumer convened an extraordinary meeting in mid-February to try to broker a truce between the reform advocates and the members who voted against importation.
That didn’t accomplish much, and Sanders and others decided to continue trying to get importation to a vote. This led to the most recent, and less-publicized, fiasco.
A few weeks ago, on May 11th, the Health, Education, Labor and Pensions (HELP) committee met to consider the FDA Reauthorization Act of 2017. This little-known piece of legislation would reauthorize the FDA to collect “user fees” from the makers of pharmaceuticals and medical devices. Although controversial to some who believe these fees make the FDA clients of the industries they’re supposed to regulate – Sanders and Paul voted against it in committee – the overall bill is likely to sail through Congress, and in fact passed in committee, 21-2.
Sanders, along with co-sponsors Elizabeth Warren and Robert Casey, offered an amendment to the user-fee bill that would have allowed for importation of drugs from FDA-approved facilities in Canada. As Casey pointed out in committee, the amendment is laden with protections, requiring patients to have valid Canadian prescriptions, allowing the FDA to shut down bad actors, etc.
Once again, Democratic discipline broke down. The amendment this time was beaten in committee, 13-10. Two Democrats, Patty Murray and Michael Bennet, both of whom accept a lot of pharmaceutical money, voted no.
Interestingly, two Republicans from states bordering Canada who voted for almost exactly the same measure earlier in the year – Murkowski of Alaska and Susan Collins of Maine – now voted no as well.
This often seems to happen with controversial bills. The math will allow a large-ish number of members to cast a vote in favor of a popular policy disliked by industry, but if there’s any danger of it actually passing, there will suddenly be defectors or converts. The political damage is limited to just a few poor souls who have to wear the unpopular vote.
Importation isn’t dead yet. It could still be offered to the whole Senate as an amendment to this same bill later on, but since it didn’t pass in committee, the idea’s proponents are now at the mercy of a series of dubious actors.
Majority leader Mitch McConnell could for instance prevent the amendment from being voted on through a process known as “filling the tree,” whereby bills are larded down with so many amendments by leadership before they hit the floor that there’s no room for other ideas.
“Filling the tree” is one of a whole range of tricks that exist in both the House and the Senate to save members from themselves – i.e., from having to vote on issues they know would be popular with people, but unpopular with their donors.
That’s not to say it will happen in the case of this issue, but that it does frequently with “populist” ideas. People like McConnell stay in leadership thanks in large part to their demonstrated skill at saving members from having to vote down ideas they know their constituents want.
The history of what’s happened with drug importation in the last year is a classic example of how American politics works. Politicians in both parties endorse ideas they know are popular, and often get themselves elected on the strength of them.
But once the ideas get into the weeds of Congress, there are a million tricks that can be employed to keep business flowing as usual while giving politicians political cover. A year ago, it looked like we had a good shot at ramping back this vicious predatory practice of overpricing life-saving drugs. Today, absent a major public uproar, it looks like the idea will have to wait quite a while longer. And people wonder why Congress is so unpopular.