Bay Windows - April 15, 2004
Mubarak Dahir

This issue has been a point of contention for years, for Americans with all kinds of illnesses, ranging from cancer patients to people with HIV and AIDS.

Finally, thanks to a particularly outrageous move by Abbott Laboratories to raise the price of its AIDS drug, Norvir, by 500 percent, this issue is getting some serious consideration by the government.

Typically, whenever consumers and advocacy groups raise a stink and demand they be allowed to legally import drugs from Canada or Europe for a fraction of the price that those same drugs cost here in the United States, there is a lot of government hand-wringing and more than just a little sweating from the drug companies.

However, so far sick Americans in need of affordable drugs have simply been stonewalled by both the drug manufacturers and the government regulators with rather lame excuses.

The federal government's claim that Americans' health would be at risk because it could not guarantee the safety of foreign-imported drugs seems spurious. Are we really supposed to believe that citizens of Canada and Western Europe are putting their health at risk for the cheaper drugs? Are we really supposed to buy the notion that health safety is only a concern in the United States?

We import all kinds of products from overseas, and they must undergo scrutiny for safety requirements before they can be sold here. It seems unfathomable that the federal government couldn't devise regulations for the safe import of foreign drugs. In reality, this isn't a question of health and safety, but of trade protectionism. So much for free trade.

The drug companies try to tell us that they don't make huge profits from the drugs, despite the often enormous cost difference between those same drugs here and in foreign countries. They also say that a lot of the money that is made off of existing drugs gets put back into research and development, to work on discovering newer, better drugs.

While both the arguments from the drug companies and the federal government have a grain of truth in them, none of the arguments are strong enough to present real or unsolvable barriers to allowing more affordable imported drugs into the United States.

The main reason we don't have cheaper, generic drugs in this country is simple: greed.

The recent debacle over the AIDS drug Norvir is an excellent illustration of why the government needs to stop pampering pharmaceutical companies and start standing up for patients who need access to cheaper drugs.

Abbott Laboratories began marketing Norvir in 1996. At the time, it was only the second in a class of revolutionary drugs known as protease inhibitors, which radically changed the course of medical treatment and outcome for people with HIV and AIDS.

In addition to the benefits of Norvir itself, doctors soon discovered that this drug had the distinctive ability to enhance the effects and benefits of other protease inhibitors. So, in addition to being prescribed as a medication in the class of protease inhibitors, Norvir also became widely used as a supplemental drug for people with HIV and AIDS who were on protease inhibitors.

Norvir soon became an integral part of the so-called "cocktail" of drugs that so many people with HIV and AIDS take.

This made Norvir a huge success. Since its introduction, the total sales of Norvir have passed the $1 billion mark, making it highly profitable for Abbott Laboratories.

Usually, as a drug becomes more widely used and more profitable, its price goes down, not up.

But in January, Abbott Laboratories decided to raise the average price of the drug, used by tens of thousands of Americans with HIV and AIDS, from about $1500 per year up to about $7800 per year. That means the same dose of the drug today costs five times more than it did a year ago.

Compare the price here to the average cost of the same exact drug in Europe - where governments typically keep drug prices under control through national health care plans. The typical yearly cost of a dose of Norvir in Europe is somewhere around $700. That means Americans are now paying 10 times more for Norvir than are Europeans.

There's another important factor in the Norvir debacle, too. The initial research and testing of the drug was made possible by a federal grant to Abbott Laboratories from the National Institutes of Health. That federal grant money came directly from taxpayers.

"The grant was critical in allowing us to make the rapid progress that we made [on Norvir]," Dr. John Erickson recently told the New York Times. Erickson was the former chief of Abbott Laboratories' drug research program. He now works for another pharmaceutical company.

In other words, taxpayer money subsidized Norvir, which went on to be a huge profit-maker for Abbott Laboratories, a company that now is turning around and charging the public exorbitantly high rates for a product that has already made them a bundle. Sounds like double dipping to me.

The fact that Norvir was developed with the help of a federal grant is important for another reason, too: Part of the fine print in any such grant made by the federal government to a drug manufacturer is that the government has the right to insist on "reasonable" prices for the discoveries made with the help of its money.

Even the greediest corporate executive has to concede that a five-time, overnight increase in the cost of a billion-dollar, already-profitable drug is hardly reasonable.

Activists are pressuring the government to use its leverage in the Norvir case, and there is some evidence that at least a few politicians are finally listening.

The Department of Health and Human Services held a hearing April 14 on Norvir in particular, and on the question of cheaper imported drugs in general. The National Institutes of Health is also set to schedule hearings on the issues.

At least six members of the House have signed a letter to Tommy Thompson, the Secretary of Health and Human Services, asking him to assert the government's right to demand "reasonable" prices on drugs discovered through federal grants.

One bill has already been introduced in the Senate to gradually allow imported drugs from Canada, Europe and Australia. And John Kerry, the presumptive Democratic vice presidential candidate, has voiced his support of legalizing imported drugs, signaling it may be an issue that gets heightened attention in the presidential election.

Activists are also encouraging a boycott of Abbott drugs. While Abbott has a monopoly on Norvir (and no one is suggesting that patients in need of the drug stop taking it to make a political statement), consumers can express their displeasure with Abbott's pricing by purchasing other brands when buying drugs where Abbott has competitors.

But in the long run, the solution to the problem of unaffordable drugs is to allow the import of foreign medicines. There's nothing like competition to keep down price gauging.

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