More on Drug Importation Economics

Given the heavy site traffic and comments (public and private) about Thursday’s importation posting (Surprise! New Importation Bill Introduced), here are a few more thoughts on the topic along with some totally unrelated Spinal Tap news.

Currency fluctuations can scramble importation economics

Check out the dollar’s volatility over the past six years – a 25 percent decline from 2002 through mid-2008. The trend sharply reversed in August as global investors fled to our (for now) safer currency.

The weak dollar led to a U.S. export boom, although export growth is now slowing as global economies falter and the dollar strengthens.

Will huge U.S. deficits lead to a weaker dollar in the future? I have no idea, but I don't see how patients benefit from currency-driven drug shortages a la Parallel Trade and UK Drug Shortages.

Just more sand in the vaseline for importation enthusiasts.

More Fun from the CBO

Ooops. I pointed you to the wrong Congressional Budget Office (CBO) analysis in Thursday’s post about importation.

I highlighted this 2004 CBO white paper. But CBO has done at least two more recent reports, although the overall conclusions (limited savings of about 1%) were the same:

• Analysis of S.1392 FTC Reauthorization Act of 2005 (9/8/05)
  
  
• Analysis of H.R. 380, the Pharmaceutical Market Access and Drug Safety Act (10/19/07)
  

Note that CBO 10-year cost savings estimates went down by about $1 billion between 2005 and 2007, presumably due in part to the currency issue.

Thanks to Nick Basta, editor of Pharmaceutical Commerce magazine, for pointing out my oversight.

Manufacturer channel strategies

I got a number of emails regarding my comments about new limitations for U.S. distribution agreements from Pharmaceutical Market Access and Drug Safety Act (S.525).

In 2007, I highlighted one issue with regard to a predecessor bill in Will US logistics deals be illegal? I am also working on some educational materials about the impact of importation on pharmacy economics and the pharmacuetical supply chain. Drop me a line if you want to talk more.

SPINAL TAP: UNWIGGED AND UNPLUGGED

2007’s California pedigree legislation revealed that many Drug Channels readers are also Spinal Tap fans. Check out their current Unwigged and Unplugged tour. I just bought tickets for the May 14 show at the Keswick Theatre!