Putting the Bottom Line Above the Law

Perhaps some elected officials need a refresher course in the fundamentals of American government and the rule of law. After all, ours "is a government of laws and not men" and "no man is above the law."

Yet lately, when the bottom lines of the states and municipalities have looked grim (due in large part, we might note, to excessive spending), our local representatives all too quickly and casually ignore what the U.S. Constitution calls "the supreme Law of the Land" — namely, "the Laws of the United States" — all in order to save a few lousy nickels, maybe more, maybe less.

One of those laws makes it illegal to re-import prescription drugs across the border unless and until the U.S. Department of Health and Human Services certifies their safety. But never mind that legal technicality, says a growing chorus of governors, mayors, and state and local officials, who are not only seeking permission, but also aggressively forging ahead with plans to buy prescription drugs from Canada — even though it violates federal law.

"It’s about time we stood up … and did the right thing and allowed citizens to purchase drugs from the most affordable supplier," says Governor Craig Benson (R-NH), who has announced that New Hampshire will be the first state in the country to begin buying prescription medications from Canada. Boston Mayor Thomas Menino puts it even more bluntly. "It’s illegal, but it’s about time we forced the issue. Why is the [American] consumer the only one to pay full price for prescription drugs?" he asks.

Well, in his populist rhetorical flourish, Mayor Menino answers his own question. "It’s illegal," he acknowledges.

As Mayor Menino knows, the United States Code prohibits the re-importation of drugs from abroad. It does so for some awfully good reasons, not the least among them being the health and safety of the American population.

Every former federal Food and Drug Administration Commissioner since 1969 has warned of the dangers of re-importing drugs from foreign countries. The risks are real and serious, sometimes leading to life-threatening consequences, and include the possibility that the medications will be unapproved, outdated, mislabeled, contaminated, counterfeit, or even the wrong dosage or drug altogether.

What’s more, these concerns are not avoided by re-importing medications only from other well-developed Western countries, such as Canada. Quite simply, when ordering from outside the United States, an American patient can never know exactly where his prescription originated. And, as noted in a report by Prudential Financial, there is already good evidence to suggest that Internet pharmacies in Canada are obtaining their drugs (for shipment to American consumers) from such medically-advanced and safety-conscious countries as Bulgaria (increase in drug exports to Canada up 300 percent), Pakistan (up 196 percent), Argentina (up 171 percent), South Africa (up 114 percent) and Singapore (up 101 percent).

Additionally, it’s not at all clear that re-importation would save all that much money, and, even if it did, it could come at tremendous future cost. Industry critics are quick to take note of the relatively cheaper cost of drugs beyond the borders of the United States, but these comparisons must be examined carefully. Prices abroad reflect not only varying exchange rates but also lower incomes and consumer buying power. This is not to mention the anti-competitive regimes imposed by many foreign governments that control the prices of many medications, while sometimes allowing other patented formulas to be counterfeited. Adjusting for these factors, as well as the role of generics (which are less important overseas), volume discounts, and frequency of use, Professor Patricia Danzon of the Wharton School at the University of Pennsylvania, along with co-author Jeong Kim, found "that the average U.S. consumer would have paid three percent more in Canada, 27 percent more in Germany, … 44 percent more in Switzerland, [and] 9 percent more in Sweden" for his or her prescription drugs. Not a net savings, but a loss. Thus, there is little certainty that, if and when re-importation reaches the vast American population, there will be any savings.

At what price will the supposed savings come? If Americans blindly hop on board for re-importation — figuring that foreign price controls will save us money, too — then there will be no place left for pharmaceutical manufacturers to recoup their tremendous costs for the research and development of new drugs. It is no doubt true that other countries are currently taking a free ride on the research and development bought and paid for by American consumers.

But when the United States tries to take the same free ride, then drug companies will be forced to drastically cut back, or even end, future research and development, because, as any basic economics course will teach you, the companies must be able to charge prices somewhere that are high enough to cover not only the manufacturing and R&D costs of their successes, but also their failures. In other words, although it may only cost a few cents to make the second pill, it cost millions to make the first and millions more to make several others that never made it beyond the laboratory.

Regardless, these good reasons for prohibiting the re-importation of drugs from foreign countries are all, quite frankly, beside the point. The fundamental problem with Mayor Menino, or anyone else, blindly re-importing drugs from abroad is that neither he nor any other elected official is above the law. As the Supreme Court has pointed out numerous times: "No man in this country is so high that he is above the law. … All the officers of the government, from the highest to the lowest, are creatures of the law, and are bound to obey it."

It’s about time that our elected officials recognize that the rule of law is "the only supreme power in our system of government, and every man who by accepting office participates in its functions is only the more strongly bound to submit to that supremacy." Mayor Menino and his band of duly elected smugglers shouldn’t be leading the charge to break the law; they should be doing everything in their power to uphold it.

After all, no man is above the law — even when the bottom line has become the top priority.

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