Claims that allowing parallel trade in pharmaceuticals is opening the door to counterfeiting and bioterrorists have been refuted by a senior executive at Pfizer in testimony to the US Senate's Health, Education, Labour and Pensions Committee.
The pharmaceutical industry has long argued that parallel trade - in which a trader sources lower-priced products from one country and imports them for sale in another where prices are higher - introduces a risk of mislabelling that puts patients at risk, an entry point for counterfeit goods and even an opening for bioterrorists.
But Peter Rost, vice president of marketing for endocrine care at Pfizer and a long-standing critic of the broader industry stance on this issue, believes there is no substance to these claims.
In front of the committee, he noted that the German Federal Health Ministry has said that not a single confirmed case of a counterfeit medicine has ever come through the parallel trade chain. Meanwhile, the UK - which accounts for around 70 per cent of the trade in parallel imports in Europe - has described the level of pharmaceutical counterfeiting as 'virtually undetectable', according to the European Association of Euro-Pharmaceutical Companies (EAEPC), which represents the parallel importers.
The hearing was set up to advise the US government on prescription drug importation, a hot topic because US consumers are increasingly importing drugs from other countries, notably Canada, to circumvent the high price of medicines in their own country.
Dr Rost, at pains to point out that these views are his own and not necessarily those of Pfizer, told the meeting that the drug industry's opposition to re-importation is a means to continue to charge full price for medicines to the uninsured, elderly, poor and weakest citizens, 'while giving everyone else a rebate'.
The issue of product safety all but disappears when you consider that the US has thousands of secondary wholesalers that trade drugs, licensed not by the FDA but individual states, he pointed out. Citing Aaron Graham, Purdue Pharma's head of security, he said that "all it takes for a terrorist to become a drug wholesaler is $1,000 and a driver's license."
A more fundamental safety and security issue is that in the US medicines are shipped in vats to wholesalers and then poured into smaller, bulk-sized containers from which tablets are dispensed manually to the patient. In contrast, drugs in Europe are sold in tamper-proof individual bottles or blister packs.
"So I believe that getting a drug from Europe is actually safer than getting it in the US," said Dr Rost.
Dr Rost also suggested that the US should adopt a system of reference pricing for drugs, rather than allowing pharmaceutical companies the pricing freedom that has helped make the US the largest market for drugs in the world with prices up to 100 per cent higher than in Europe, according to a London School of Economics study published in 2003.
He pointed out that half of the largest pharmaceutical manufacturers are foreign corporations and asked the panel why foreign companies should be allowed to come in and gouge American taxpayers?
The US Department of Health and Human Services Task Force recently published a Report on Drug Importation which suggested that if re-imports were to be permitted, US drug purchasers might receive discounts of only 20 per cent or less, with the rest of the difference between US and overseas prices going to the traders. This phenomenon - known as price shadowing - has been well described in Europe.
But the US is making a mistake if it rules against drug re-imports, said Rost.
"Every day Americans die because they can't afford life-saving drugs because we want to protect the profits of foreign corporations," he told the committee, adding "we have to be in favour of free trade and against a closed market."