Letter to Congress on Chamber Opposition to H.R. 2427, the Gutknecht-Emerson Proposal

July 16, 2003

To Members of the U.S. House of Representatives:

The U.S. Chamber of Commerce, the world's largest business federation with more than three million businesses and organizations of every size, sector and region, opposes H.R. 2427, the Gutknecht-Emerson proposal allowing the importation of prescription drugs from other countries. Proponents of this measure claim that purchasers may safely acquire identical medications at lower cost due to other nations' price controls. In fact, H.R. 2427 threatens the health and well-being of our citizens while undermining the integrity of companies' manufacturing processes.

In contrast to H.R. 2427, the Medicare legislation just passed by the House of Representatives includes a provision that would legalize the importation of medication from Canada, provided that the Secretary of Health and Human Services certifies such importation poses no additional risk to the heath and safety of Americans. This safety provision is already part of current law, but would be repealed under the Gutknecht-Emerson bill. As a result, America's borders would be open to a stream of counterfeit drugs and other dangerous products that are potentially injurious to the public's health and which pose a threat to the security of our nation's drug supply. The FDA could no longer assure the safety, effectiveness or quality of the medications Americans legally purchase and ingest.

U.S. employers have sought to maximize their health care dollars by eliminating medical errors, improving the quality of the services they purchase and investing in technologies with the best outcomes. These significant efforts are put at risk when counterfeit drugs enter the health care system and become part of the supply chain to hospitals and pharmacies or are put directly into the hands of American consumers. With no way to assure their reliability, users and purchasers could end up spending thousands of dollars to remedy even a single adverse outcome resulting from the consumption of a counterfeit drug.

Furthermore, the cost, use and trade of prescription drugs from other countries' health systems is under consideration in the ongoing multilateral trade negotiations among the 145 countries that are members of the World Trade Organization. Prescription drug prices in many countries are determined not by market forces or innovation costs but rather by the amount of money available to the governments. In some cases, foreign governments may determine that it is in their "national interest" to expropriate or "pirate" the drugs in question. The definition of "national interest" in this instance is now being negotiated.

Among the advanced economies, U.S. and other countries' policymakers have long recognized the importance of ensuring that foreign products are not dumped (sold below the cost of production in the home market) in other markets to increase unfairly a supplier's market share. In addition, there is a long acknowledged public safety interest that such imported drugs meet U.S. or other importing countries' health and safety standards, if those standards are based on sound science.

We appreciate the concerns of Congress to make prescription drugs more accessible, but we are also deeply troubled by the recent surge in drug counterfeiting cases and ensuing threats to public safety. It is essential that manufacturers in all sectors of our economy be able to protect the integrity of products bearing their name. The Chamber urges your opposition H.R. 2427, the Gutknecht-Emerson proposal allowing the importation of prescription drugs.

Sincerely,
R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce