April 11, 2019

House Health and Insurance Committee
HCR 0107
Colorado General Assembly
200 E Colfax Avenue
Denver, CO 80203

Dear Health and Insurance Committee Members,

On April 17, 2019, you are scheduled to debate SB 19-005, the “Colorado Wholesale Importation of Prescription Drugs Act." This bill would authorize the Colorado Department of Health Care Policy and Financing to design a program to import prescription pharmaceutical products from Canada for sale to Colorado consumers, provided the U.S. Secretary of the Department of Health and Human Services approves the program. If passed into law, this bill will not lower costs for Coloradans and would open the pharmaceutical supply chain to dangerous and ineffective counterfeit drugs. On behalf of the more than 36,400 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Colorado, I ask that you reject this legislation.

Purchasing pharmaceuticals outside of the current closed U.S. system introduces enormous risk to the drug supply chain.  No secretary of Health and Human Services or commissioner of the Food and Drug Administration (FDA), of either political party, has ever certified that importing pharmaceuticals would keep Americans safe from counterfeit drugs, including dangerous opioids.  State officials are not equipped to assess whether imported drugs are pure and unadulterated without a huge investment, which would negate any anticipated savings.

This bill assumes that Canadian officials and pharmacies will sell their drugs without a considerable mark-up to cover their handling costs or that pharmaceutical companies will sell more drugs than needed for the population of a Canadian province.  Moreover, the importation of drugs from countries, such as Canada with its socialized medicine, is simply importing their price controls.  It is well-known that price controls create market disruption and result in less innovation and fewer cures.  It should be no surprise that Canada’s share of the world’s total pharmaceutical R&D is minuscule compared to the U.S.

It would be better for Colorado state officials to ask their U.S. congressional delegation to create an environment that fosters competition and innovation and to continue to hold the FDA’s feet to the fire to make sure the backlog of generic drug applications awaiting approval is cleared.  This would be a far more effective way to help bring down the price of prescription drugs than passing this harmful and counterproductive bill.

With respect to other productive actions you can take, CCAGW agrees with the Council of Economic Advisers that stated in their February 2018 report, “Reforming Biopharmaceutical Pricing at Home and Abroad,” that “Meaningful reforms would address the root of the problem: foreign, developed nations, that can afford to pay for novel drugs, free-ride by setting drug prices at unfairly low levels, leaving American patients to pay for the innovation that foreign patients enjoy.” Please urge your federal representatives to support trade deals that would require countries to respect our intellectual property and stop the free-riding on our research and development, instead of the U.S. adopting their destructive price controls.

The U.S. and Colorado need policies that support and speed-up innovation and competition.  Importing price controls that stifle it, like SB 19-005, should be rejected.

Sincerely,

Tom Schatz
President, CCAGW

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