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Sen. Dorgan wants restrictions eased on imported prescription drugs

GRAND FORKS -- Responding to a new report today that drug companies are boosting prices this year in anticipation of Congress passing health care reform, Sen. Byron Dorgan, D-N.D., said he will offer his bill easing restrictions on importation of cheaper drugs as an amendment to the Senate reform bill.

"We've tried and tried and tried" to make cheaper imported drugs available to American consumers, Dorgan said. "This is the time to get it done."

The New York Times reported today that the drug industry "has been raising its prices at the fastest rate in years," even as drug makers "promise to support Washington's health care overhaul by shaving $8 billion a year off the nation's drug costs."

While the Consumer Price Index has fallen by 1.3 percent in the past year, wholesale prices of brand-name prescription drugs rose about 9 percent, the newspaper reported.

Dorgan said he has more than 30 cosponsors for his prescription drug importation bill, including Republicans Olympia Snowe of Maine and John McCain of Arizona.

The bill would allow U.S. pharmacies and drug wholesalers to import FDA-approved medications from Canada and several other countries and pass savings on to customers. The Congressional Budget Office has estimated the legislation would save U.S. consumers $50 billion over the next decade, Dorgan said, including $10 billion saved by the federal government.

But despite promises to help contain escalating health care costs, the drug makers "are ratcheting up brand name drug prices," he said. "It's the way they do business. It is why consumers need some protection here, with the freedom to benefit from the global economy."

His amendment would not require consumers to buy the imported drugs, Dorgan said. "But if they are allowed to do it, to buy elsewhere those same drugs they need at a fraction of the price, it will force the pharmaceutical companies to offer fair pricing."

Drug makers say they need to raise prices to fund research and development of new drugs. "Price adjustments for our products have no connection to health care reform," Ron Rogers, a spokesman for Merck, told the Times.

But "that's just not true," Dorgan said. "They spend more money on advertising and marketing than on research. All that commercial time telling you to ask your doctor if that little blue pill is right for you -- maybe they could knock off a little of that."

The Times quoted a University of Minnesota scholar who has analyzed drug pricing for AARP, the seniors advocacy group, which supports health care reform that has passed the House.

"When we have major legislation anticipated, we see a run-up in price increases," Stephen Schondelmeyer, a professor of pharmaceutical economics, told the newspaper.

Also, a Harvard health economist said he "found a similar pattern of unusual price increases after Congress added drug benefits to Medicare a few years ago."

The Senate is expected to start debating its health care reform bill later this week. Dorgan said it probably would be "a couple of weeks" before senators take up his amendment.

"The pharmaceutical industry has a lot of clout and fights back hard," he said, "so we'll see. But this is the time to get this done. A lot of people are able to stay out of hospital beds if they can afford to use these drugs."