Study: Illinois Governor's Drug 'Reimportation' Plan Doomed to Fail, at State or National Level

11/3/2003

From: Al Cors, Jr. or Pete Sepp, 703-683-5700, both of NTU

ALEXANDRIA, Va., Nov. 3 -- Smaller-than- advertised savings for bigger-than-advertised risks ... that's the conclusion of a study examining the fiscal and medical aspects of Illinois Gov. Rod Blagojevich's plan to import or re- import prescription drugs from Canada for use by state government employees and retirees. The study, released today by the 350,000- member National Taxpayers Union (NTU), should also serve as a warning to policymakers hoping to replicate Blagojevich's plan on the national level.

"This study shows that Governor Blagojevich's political ploy for cheap pills is full of illusory savings and very real dangers to taxpayers and patients," said NTU Vice President for Government Affairs Al Cors, Jr. "Officials in Congress or on the Presidential campaign trail who are planning to follow the Governor's lead with a nationwide importation scheme should take a step back and consider the tremendous damage such a policy could inflict upon Americans."

Last week NTU made public a few limited findings of its research into Gov. Blagojevich's claims that his importation plan would save the state tens of millions of dollars. This week's full study only reinforces and amplifies those initial concerns. For example:

-- Using the most generous assumption from an October 2003 Congressional Budget Office analysis of national reimportation legislation, NTU concluded that the most Illinois taxpayers could expect to save from the Blagojevich plan is $2.7 million annually, or 0.8 percent - not the $91 million/39 percent figure the Governor touts.

-- These paltry savings translate to a mere 99 cents per enrollee per month (based on the number of workers and retirees in the Illinois State Employees' Group Health Insurance Program).

-- Meanwhile, such savings come at the price of severe safety problems. According to the FDA, "Virtually every shipment of prescription drugs from Canadian pharmacies to consumers violates (U.S. drug security laws) ... such drugs are unapproved, labeled incorrectly, and/or dispensed without a prescription."

-- Worse, Canada is becoming a dumping ground for "counterfeit or lower-quality" drugs from foreign countries that could be passed along to Americans. "Transshipments" to Canadian pharmacies from Argentina and Pakistan are up nearly 200 percent, and 300 percent from Bulgaria.

Ironically, Cors observed, Illinois could contain costs without risking patients, through "disease management" strategies that reduce non-drug health costs like hospitalization and surgery with closely-monitored long-term pharmaceutical therapies. The study cites two of many cases -- the PacifiCare Health Systems initiatives for renal and heart disease and the "CarePatterns" Disease Management Program for diabetes -- that show how consumer-based alternatives can help taxpayers and patients.

"Disease management is just one of the many options Governor Blagojevich and his colleagues on the national level can embrace, instead of big government schemes to import drugs from Canada," Cors concluded. "The fiscal and medical health of Illinois citizens, and all Americans, is at stake."

NTU is a non-partisan citizen group (with 15,000 members in Illinois) working for lower taxes, less wasteful spending, and accountable government at all levels. NTU has actively worked against government-dominated health care policies for over a decade, and has conducted many studies of drug price- and demand- control plans in states like Florida and Maine. Note: NTU Issue Brief 147, Planning to Fail: The Illinois-Canadian Drug Plan, is available online at http://www.ntu.org.