-Caveat Lector-

Shalala won't implement prescription drug law

By CHRISTOPHER NEWTON
The Associated Press
12/27/00 1:48 AM


WASHINGTON (AP) -- A new law aimed at cutting prescription drug prices by
allowing them to be reimported from Canada won't be implemented by Health
and Human Services Secretary Donna Shalala.

In a letter Tuesday to President Clinton, Shalala said the law had "serious
flaws and loopholes."

Those concerns "make it impossible for me to demonstrate that it is safe and
cost effective," she wrote. "As such, I cannot sanction the allocation of
taxpayer dollars to implement such a system."

Signed by President Clinton before Election Day, the law was an attempt to
address the clamor for cheaper prescription drugs -- particularly among the
elderly. Lawmakers were unable to agree on a more sweeping plan to add
prescription drug coverage to Medicare.

Drugs manufactured in the United States can be purchased for much less in
Canada, principally because the government regulates prices, a solution
fiercely resisted here.

For example, the allergy-sinus medication Flonase Nasal costs $46 in the
United States, but just $23 in Canada. Likewise, 45 pills of the
anti-depressant Prozac can cost about $106 in the United States and $43 in
Canada.

The law was vigorously opposed by the pharmaceutical industry and Democratic
critics called it a Band-Aid fix for the country's troubles with
prescription drug prices, manufactured to give political cover to those who
opposed broader solutions.

Shalala was directed by the legislation to review the law and determine
whether it was cost effective and safe. Shalala said she would not request
$23 million available to establish a system for overseeing the importation
of drugs from Canada.

She argued that the law raises safety issues because there's no guarantee
that imported drugs will carry labels approved by the Food and Drug
Administration. And she complained that the law did nothing to keep drug
manufacturers from strong-arming distributors into raising prices on
imported drugs.

But Sen. Byron Dorgan, D-N.D., a co-author of the legislation, said the
administration simply "chickened out."

"The best approach would have been to say, we'll pass a law that does
something and then we will wait and see how the drug companies react,"
Dorgan said. "If they start playing games then at least we'll all know who
the villain is. But this makes no sense at all. Now we know the drug
companies will do nothing because we're doing nothing."

Chris Jennings, Clinton's top health policy aide, said Shalala's stinging
assessment was on target.

"We have an obligation not to raise hopes with false promises," he said.
"There are loopholes that allow the intent of the legislation to be
completely thwarted."


Copyright 2000 Associated Press. All rights reserved. This material may not
be published, broadcast, rewritten, or redistributed.

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