Prescription Drug Affordability

At Issue

Nothing in the Medicare Modernization Act of 2003 (MMA) sections of the legislation signed by President Bush in December 2003 attracted more attention than the prescription drug benefit. Prescription drugs have become a significant part of recovery, often replacing surgery and other invasive procedures that required significant recovery time and lost workdays.

In 1984, Congress passed the Hatch-Waxman Act in an attempt to balance the needs of drug innovators for patent protections to encourage research and development with the development of the expanding generic drug industry.

In the intervening years, the United States has become the beacon for drug companies to develop countless new drug therapies from mental illness to cancer and even sexual dysfunction. Americans have become dependent on many of these new drugs. Unfortunately, while the variety of drugs we need grows as we age, some of these drug therapies are increasingly expensive, rising faster than the general growth of inflation.

NAHU's Position

NAHU has urged Congress for many years to pass a Medicare prescription drug bill and with the passage of the Medicare Modernization Act, we believe that seniors' quality of life has been vastly improved. NAHU also supported changes to the Hatch-Waxman Act that largely restores the equilibrium and intent of the original legislation so that lower cost generics can be available in the marketplace in a timely manner.

NAHU does not support the importation or re-importation of brand drugs from abroad because of our concern for the potential safety implications this policy poses to the American public. We are concerned that savings gained from importation would be more than offset by the cost to create the infrastructure to ensure their safety, but will support the recommendations made by the Department of Health and Human Services and FDA in this regard. We are hopeful that the language contained in the Medicare Modernization Act calling on our traded representatives to negotiate with our trading partners for a more equitable contribution to the cost of prescription drug research and development will result in less dependence on the American public to shoulder these costs.

NAHU's Actions

NAHU is a member of the Rx Benefits Coalition which supports private sector tools in the management of pharmacy benefits to keep drug costs affordable for more than 170 million Americans who receive benefits through their health plans. Employer and unions sponsored plans account for 70 percent of the 3.2 billion prescriptions filled each year.

NAHU Letter to FDA Regarding Canada Rx

Additional Resources

Food and Drug Administration

Oversees the safety of food, drugs, medical devises, biologics, animal feed and drugs, cosmetics, radiation-emitting products, and other products.

Access to Generic Drugs:

• Consumer Guide to Generic Drugs - National Consumers League brochure
• Generic Drug Ad - Food and Drug Administration
• Generic Drug Ad - Food and Drug Administration

Additional Information from FDA:

• FDA Warning Letter to WI Governor Jim Doyle - Food and Drug Administration, July 22, 2004
• Buying Medicines and Medical Products Online - Food and Drug Administration
• Combating Counterfeit Drugs - Food and Drug Administration
• Consumer Education: What You Should Know About Buying and Using Drug Products - Food and Drug Administration
• FDA/U.S. Customs Import Blitz Exams Reveal Hundreds of Potentially Dangerous Imported Drug Shipments - Food and Drug Administration, September 29, 2003
• Importing Prescription Drugs - Food and Drug Administration
• Rx Depot, Inc. Warning Letter from the Food and Drug Administration - March 21, 2003
• Recent FDA/U.S. Customs Import Blitz Exams Continue to Reveal Potentially Dangerous Illegally Imported Drug Shipments - Food and Drug Administration, January 27, 2004
• Schemes to Import Prescription Drugs: Risky Business for You, Risky Medicine for Everyone - Food and Drug Administration
• Statements of William K. Hubbard, Associate Commissioner For Policy and Planning. "Canadian Prescription Drug Re-Importation: Is There a Safety Issue?" - Committee on Government Reform, Subcommittee on Human Rights and Wellness - U.S. Hosue of Representatives - June 12, 2003

Congressional Budget Office

• Would Prescription Drug Importation Reduce U.S. Drug Spending? - Congressional Budget Office, April 29, 2004 - Legalizing the import of drugs from Canada would only modestly reduce drug spending in this country, the Congressional Budget Office said in an analysis released April 29.

Government Accountability Office

• Preliminary Observations on Efforts to Enforce the Prohibitions on Personal Importation - GAO-04-839T - July 22, 2004

To find out more about prescription drugs in Medicare, please click here.

For more information, please contact John Greene.

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