O Canada Drug Imports

Importing prescription drugs, an issue that's vexed big pharmaceutical companies for much of this decade, is back.

The idea of legalizing cheaper imported drugs from other countries gained a lot of political momentum over the decade, especially on the state level, where governors struggle with underfunded Medicaid budgets.

This time it's wrapped into the health reform debate. A Senate proposal has bipartisan support and strong backing from the AARP, the largest organization of seniors. The amendment to the Senate's health reform bill would make it legal for Americans to buy cheaper drugs from Canada and other countries that have price controls for the cost of medicines.

It's huge issue for major drug companies like Pfizer, Inc. and Merck & Co., who count on the U.S. as their largest market for sales and profit.

The U.S. made up $291.5 billion, or 38 percent, of the global sales for prescription drugs in 2008, according to IMS Health Inc. What's more, the profits are far higher in the U.S. than other countries where Pfizer and others face limits on how they can price their drugs. In the U.S., the sky's the limit. While Pfizer's cholesterol treatment Lipitor can sell in the U.S. for $400 for 90 20-milligrams pills, that same quantity and dosage will cost a quarter of the price from mail-order pharmacies in Canada and Israel. It's illegal to buy from these online pharmacies, though it's unclear how well the law is policed.

The Kaiser Foundation says U.S. prescription-drug spending increased fivefold between 1990 and 2006. More recently, an AARP-funded study out last month found prices for brand-name drugs used by many Medicare patients rose more than 9 percent in the last year. That's up a lot considering consumer prices fell 1.3 percent overall in the U.S. during the same period.

The AARP made the importation amendment one of its key issues, meaning it's going to take note of any lawmakers that don't support the idea. That presents an interesting choice for Democrats, who have buddied up with the drug industry to gain support for President Obama's health reform. The Senate amendment is sponsored by Democrats Byron Dorgan of North Dakot and Debbie Stabenow of Michigan and Republicans Olympia Snowe of Maine, John McCain of Arizona, and Charles Grassley of Iowa.

Of course, the drug companies aren't talking about profits. They say they're concerned about safety. The industry's mantra to fight importation over the years has been raising the fear of counterfeit drugs making their way into the country, threatening consumers.

"We believe that Congress should not consider proposals that threaten patient health and safety," Ken Johnson, senior vice president for the trade group Pharmaceutical Research and Manufacturers of America, says in a statement.