Drug Importation: Entrepreneurial Innovation, Quality Jobs, Consumer Safety at Risk

By at 10 May, 2017, 6:36 am

Dear Members of the U.S. Senate Committee on Health, Education, Labor and Pensions:

The Small Business & Entrepreneurship Council (SBE Council) strongly opposes efforts to undermine entrepreneurship and innovation in the prescription drug manufacturing industry by directly or indirectly imposing price controls on life-saving and enhancing medicines.

The HELP Committee is likely to face amendments to the FDA Reauthorization Act (S.934) that would allow for the importation of prescription drugs from nations that impose price controls. Importing price controls will only serve to undermine property rights, investment and innovation, hurt small, entrepreneurial firms, and create safety risks for consumers.

The U.S. ranks as the global leader in prescription drug innovation and manufacturing, which generates tremendous benefits for U.S. patients and consumers. There are a variety of reasons for this, as the U.S. International Trade Administration explained: “The United States has a supportive domestic environment for the development and commercialization of pharmaceuticals. Its strengths include a robust intellectual property system that recognizes and rewards innovation and a science-based regulatory system that is considered the most rigorous in the world. FDA approval facilitates regulatory approval in other countries, especially in developing economies. The U.S. is the world’s largest market by value and its reimbursement and pricing environment is considered by industry as the most favorable in terms of recognizing the value of innovative drugs.”

Such an environment is vital, of course, especially given the considerable costs and risks involved in the pharmaceutical industry. As PhRMA has reported, it takes some 10 years for a drug to get to market, and the average cost is $2.6 billion.

For good measure, it must be recognized that the pharmaceutical and medicine manufacturing industry overwhelmingly is populated by small businesses. According to the latest U.S. Census Bureau data, 57 percent of employer firms in the industry have less than 20 workers, and 80 percent have fewer than 100 employees.

Drug Safety a Major Concern: In addition, by allowing for drug importation, American consumers would be exposed to counterfeit medicines and drugs with potentially dangerous ingredients. It is a real threat acknowledged by the FDA itself.

To sum up, price controls limit potential returns on entrepreneurship and investment, and given the costs and risk involved in the industry, price controls diminish innovation in medicine. By allowing for importation of drugs, the U.S. would effectively import foreign price controls. The potential negatives for consumers, patients, and entrepreneurs, businesses and employees in the pharmaceutical and medicine industry are immeasurable.

I strongly urge your opposition to any and all efforts at imposing price controls on those who make pharmaceuticals and medicines, including via the importation of price-controlled drugs. Thank you for your time and attention on this issue that is of vital interest to the small business community.


Karen Kerrigan, President & CEO














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