CHI Issues Statement on Gov. Schwarzenegger's Call for Federal Action on Prescription Drug Importation.

LA JOLLA, Calif. -- California Healthcare Institute (CHI) president and CEO David Gollaher, Ph.D., issued the following statement today in response to a letter Gov. Arnold Schwarzenegger issued to Congressional leadership calling for federal legislation that would enable Americans to import prescription drugs from foreign countries:

"Today Gov. Schwarzenegger, in a letter to Congressional leadership, has called for federal legislation that would enable Americans to import prescription drugs from foreign countries 'in a manner that protects patient safety and respects intellectual property rights.' In addition, the governor reaffirms his opposition to price controls and calls on Congress to 'demand an end to price controls in foreign countries' so that the rest of the world would bear its fair share of the research and development cost of new medicines.

CHI agrees with the governor's views that pharmaceutical price controls would damage the California biotechnology industry's ability to produce medical breakthroughs, and that other nations' price controls unfairly shift the cost of biomedical innovation onto American consumers. Yet the reason many drugs are cheaper in Canada and Europe than they are in the U.S. is because those countries' governments impose price controls. If these controls were eliminated, prices would undoubtedly rise, making importation of drugs unattractive. What is critical, though, is that any threat of price controls or importation reduces the flow of investment capital into biopharmaceutical companies, and has the most serious effects on the small entrepreneurial companies that are the mainspring of medical innovation. Importation has the potential to undermine our state's world leadership in biomedical R&D.

We concur with the governor's opinion that drug importation is a matter of federal law that should not be addressed by the state legislature. Congress has charged the U.S. Food and Drug Administration (FDA) with responsibility for drug safety, and any system of foreign importation should conform to FDA regulation.

Nonetheless, we do not believe that foreign importation would solve the problem of making drugs more accessible and more affordable for millions of uninsured Californians. To get a prescription, a patient must first visit a physician. And lack of coverage for basic medical services means that most uninsured patients never get the appropriate prescription in the first place. CHI believes that access to drugs cannot be separated from the larger issue of access to health care coverage, an issue that we look forward to constructively engaging in 2006 with the governor, state legislature and the state's congressional delegation."

CHI represents more than 250 leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. CHI's mission is to advance responsible public policies that foster medical innovation and promote scientific discovery. CHI's web site is http://www.chi.org.