Head of Nation's Leading Drug Store Chain Calls for Safe, Legal Drug Importation
06 May 2004 - 4:31AM
PR Newswire (US)
Head of Nation's Leading Drug Store Chain Calls for Safe, Legal
Drug Importation CVS/pharmacy CEO Tom Ryan says global pricing
system needed to help alleviate costs for Americans WASHINGTON, May
5 /PRNewswire-FirstCall/ -- In testimony today before the
Department of Health and Human Services Drug Importation Task
Force, CVS/pharmacy Chairman, President and CEO Tom Ryan called on
Congress and the Administration to quickly establish a means for
consumers to legally and safely import prescription drugs. To do
otherwise, he said, would be to ignore the millions of Americans
who are forced to go outside the existing prescription drug system
in the U.S., which is intended to ensure drug safety, because they
cannot afford to buy drugs within the system. "While many in our
industry believe that importation is a fundamentally flawed concept
and oppose it without exception, I have come to a slightly
different view," Ryan said. "Simply put, there are too many
patients our pharmacists never see because they cannot afford the
drugs we dispense, and others who are unable to pay for a full
regimen of medications because it soaks up so much of their
disposable income." For those reasons, Ryan said he supports a
safe, legal system of importation that would include the bulk
importation of medicines from Canada as well as other nations where
safety and quality measures are similar to those in the United
States and dispensed by licensed U.S. pharmacies. Ryan added that
if such a system were put in place, CVS/pharmacy would commit to
playing an active role in providing access to imported drugs to
consumers who need them. Despite his support for importation, Ryan
said he believes it should be viewed only as a temporary solution.
In order to truly address the problem of skyrocketing drug costs
for Americans, the existing global pricing model, under which
identical drugs to those sold in the U.S. often cost far less in
other countries due to government price controls. "The existing
underlying global pricing model simply cannot be sustained," said
Ryan. The CVS/pharmacy CEO said that the federal government and
pharmaceutical companies must move the industry to a global pricing
system that is fair across all countries and that is based on what
the market is able to bear and the value delivered by the products.
"The United States cannot bear the cost of R&D for the world,"
said Ryan. "International trade negotiations are one place where
the U.S. can begin to lead the way to establishing a more
appropriate, market-based pricing system with our trading partners.
In the longer-term, the answer must be fair and equitable trade
practices and open access. We cannot allow millions of our fellow
citizens to go without life sustaining medications due to arbitrary
international trade practices. We don't do it for sugar, rice or
corn; we shouldn't do it for life saving medications." "It is a
complicated problem with neither simple explanations nor simple
solutions," Ryan continued. "But this much is clear: No industry
can permanently sustain a pricing system in which the cost of a
product varies so radically from one country to the next, and
pharmaceuticals are no exception." With over 40 years of dynamic
growth in the retail pharmacy industry, CVS is committed to being
the easiest pharmacy retailer for customers to use. With 4,187
stores in 32 states and the District of Columbia, CVS has created
innovative approaches to serve the healthcare needs of all its
customers through its online pharmacy, CVS.com and its pharmacy
benefit management and specialty pharmacy subsidiary, PharmaCare
Management Services. On April 5, 2004, CVS entered into a
definitive agreement under which it will acquire 1,260 Eckerd drug
stores, located mainly in the southern United States, in addition
to Eckerd Health Services, which includes Eckerd's mail order and
pharmacy benefit management businesses. The transaction is subject
to review under the Hart-Scott Rodino Act as well as other
customary closing conditions, and is expected to close in June of
2004. General information about CVS is available through the
Investor Relations portion of the Company's website, at
http://investor.cvs.com/. Remarks by: Tom Ryan Chairman, President
and CEO - CVS Corporation HHS Drug Importation Listening Session
May 5, 2004 Mr. Chairman and members of the Task Force, on behalf
of CVS/pharmacy, I am pleased to be speaking with you today to
share our views on the importation of prescription drugs. By way of
background, I am Chairman, President and CEO of CVS Pharmacy. After
completing our recently announced acquisition of part of the Eckerd
drugstore chain, CVS/pharmacy will become the largest retail drug
operator in the United States, with more than 5,000 retail outlets
in 36 states, filling over 400 million prescriptions per year
(which is equal to 13% of all prescriptions dispensed in the U.S.)
In addition, our Pharmacy Benefits Management company, PharmaCare,
will become the fourth largest, serving over 30 million lives.
While many in our industry believe that importation is a
fundamentally flawed concept and oppose it without exception, I
have come to a slightly different view. It's indisputable that
modern pharmaceuticals are tremendously valuable. Innovative drugs
save lives and improve the quality of life for countless people
around the world. However, there are patients our pharmacists never
see because they cannot afford the drugs we dispense, and others
who are unable to pay for a full regimen of medications because it
soaks up so much of their disposable income. Over the last few
years there has been some progress in reducing the financial burden
faced by many of those in the greatest need, including retailer /
manufacturer / and state-sponsored discount programs and, most
recently, the just-launched Medicare discount cards. While these
are helpful, they do not treat the underlying condition; they only
relieve some of the symptoms. That condition is the way
pharmaceutical prices are set around the world. As you know,
identical drugs to those sold in the U.S. often cost far less in
other countries due to government price controls. As a result, a
multi- billion-dollar industry, operating outside U.S. law and
federal regulation, has emerged to facilitate the flow of
prescription drugs from Canada, and other countries, into the U.S.
I applaud the efforts of this Task Force to address this important
health care issue. Much of the discussion and debate has focused on
the risks to patient safety, such as the dangers associated with
counterfeit drugs and the inability to consult with a licensed
pharmacist, weighed against the value of access to prescription
drugs for consumers who cannot afford them at current U.S. prices.
Safety and accessibility are important questions, but these
arguments miss the core issue. "The existing underlying global
pricing model simply cannot be sustained." Let me be clear: I am
not advocating that price controls are the solution. It's a fact
that a Ford Taurus, Dell laptop and bottle of non-prescription
Tylenol all cost more in the U.S. than in Canada. That's the market
working, not arbitrary government price controls. Global pricing is
a complex problem with neither simple explanations nor simple
solutions. But this much is clear: No industry can permanently
sustain a pricing system in which the cost of a product arbitrarily
varies so radically from one country to the next, and
pharmaceuticals are no exception. We must find a common ground. I
put forth two basic principles that might help move the dialogue
forward: First, the federal government and pharmaceutical companies
must move this industry to a global pricing system that is fair
across all countries. The United States can no longer bear the cost
of R&D for the world. Trade negotiations are one place where
the U.S. Trade Representative, among others, can begin to lead the
way to establishing a more appropriate, market-based pricing system
with our trading partners. The recent U.S.-Australia Free Trade
Agreement is a notable advance on this front. This Administration
must elevate pharmaceutical pricing issues to the forefront of
international trade negotiations. Fixing the disparities in price
that have evolved around the world will not be a simple task, nor
will it be quick. This leads to my second principle -- while that
process moves forward, the fact remains that many Americans need
help today with the cost of their prescription drugs. It is to
serve this real need that CVS/pharmacy calls on the Administration
and Congress to quickly establish a means for consumers to legally
and safely access imported prescription drugs for a temporary
period - - perhaps 3 to 4 years, perhaps longer -- while a viable
long-term solution is pursued. To do otherwise would be to ignore
the millions of Americans who are playing "Prescription Roulette"
as we speak, forced to go outside our existing system, which is
intended to ensure drug safety, in order to preserve their
pocketbook. Today there are well over 100 internet pharmacies
sending medications into the U.S. from Canada alone. In addition,
as you heard this morning, there are states and cities setting up
programs to direct their uninsured citizens to international
pharmacies, or even to purchase products directly for their
employees. Our concern at CVS/pharmacy is for our customers and the
trust they place in our pharmacists. Mr. Chairman, I believe that
if CVS tried to import drugs to meet our customers' needs, Federal
and state authorities would shut us down within an hour. It is not
acceptable to allow this trade to continue in the shadows. I
recognize that there are many issues that require resolution before
importation can be temporarily permitted. These include: deciding
which drugs to import given the lack of uniform international
standards, ensuring adequate product supply, and determining how to
protect intellectual property rights, to name just a few. Also, in
a program of this kind, we need to prioritize providing relief to
uninsured individuals -- making imports available to any and all
payers would strain supplies to the point where cost savings would
disappear. Opening up our domestic drug distribution system to
additional sources of products undoubtedly increases the potential
for counterfeit and/or adulterated products to enter the system.
Therefore, I believe that the lowest risk approach would be bulk
importation: sourced from approved foreign entities, imported by
established domestic distributors, and dispensed by licensed U.S.
pharmacies. Such a system should include requirements for clear
drug pedigree and chain of custody, the use of appropriate
anti-counterfeiting technologies, and adequate fees charged to
exporters to offset the additional cost of federal inspections and
oversight. In contrast, legalizing direct importation by consumers
would involve millions of packages from hundreds of sources; the
resources needed to ensure safety in that model would be massive
compared to adding some safeguards to the safe, well-established
distribution system already in place in the U.S. Clearly, the most
logical path would be to leverage the drug distribution system we
already have in place today. To conclude, we all know this is not
an academic exercise - millions of Americans already have opted to
import drugs because they can't afford not to. We owe it them to
face this issue head-on and not look the other way. If importation
is made legal and safe, CVS/pharmacy, as the nation's leading
pharmacy chain, is committed to playing an active role in providing
access to imported drugs to American consumers who need them. In
the longer-term, the answer must be fair and equitable trade
practices and open access. We cannot allow millions of our fellow
citizens to go without life sustaining medications due to arbitrary
international trade practices. We don't do it for sugar, rice, or
corn; we shouldn't do it for life saving medications. I would be
pleased to answer any questions the Task Force has for me. Thank
you. DATASOURCE: CVS/pharmacy CONTACT: Todd Andrews, Director of
Corporate Communications of CVS Corporation, +1-401-770-5717 Web
site: http://www.cvs.com/
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