CVS Chief Calls for Legalizing Drug Imports

WASHINGTON – Breaking with others in his industry, the chief executive of CVS Pharmacy (CVS) called Wednesday for legalizing imports of prescription drugs. The statement by the nation's largest wholesale purchaser of prescription medicines came a day after the Bush administration's health secretary said legalizing imports appears inevitable.

Support is also growing in Congress, even among Republicans who previously opposed importation but now say constituents are clamoring for relief from soaring prescription prices (search).

"While many in our industry believe that the importation issue is a fundamentally flawed concept and oppose it without exception, I come with a slightly different view," Thomas Ryan (search), CVS chairman and chief executive officer, told a government task force on drug importation.

Ryan is the first executive of a large drug store chain to support importing drugs (search) from countries where prices are controlled by governments so that people can fill prescriptions more cheaply than they can at U.S. pharmacies. Ryan said such a move would be a recognition of reality — a growing, somewhat shadowy business enterprise that he said is valued at $2.5 billion to $3 billion a year, far more than other estimates of the cross-border drug trade.

"Millions of Americans have already opted to import drugs because they can't afford not to. We owe it to them to face this issue head on and not look the other way," he said.

Pharmacies want to prevent the loss of sales to the foreign drug industry, especially since some studies have shown that purchases of drugs from abroad are cutting into U.S. drug store sales.

The government panel is considering whether and how drugs could be safely imported from Canada and elsewhere.

The Bush administration and Republican leaders in Congress, as well as the pharmaceutical industry, have opposed legalizing drug imports, citing safety concerns.

Among rank-and-file lawmakers, however, momentum for import legislation apparently is growing. Lawmakers who are talking up the new Medicare (search) drug discount card are encountering complaints from constituents who say it will not do enough to lower prices.

"I just sense the buzz," Rep. Sherwood Boehlert, R-N.Y., said. "A lot of members are in their districts talking about this drug discount card. ... I have no doubt that many seniors are bringing this issue to their attention."

Boehlert voted against importation last year, but now supports drug imports from Canada.

On Tuesday, Health and Human Services Secretary Tommy Thompson said he believes Congress will pass a bill this year and he would advise President Bush not to stand in its way.

Ira Loss, a health care expert at Washington Analysis, a financial research company, said Thompson's comments send a signal that the "White House is prepared to bail on importation for political purposes if they need it near the end" of the presidential campaign.

White House aides have said they are awaiting the task force's report, which could come as early as this summer.

Ryan and three Republican governors who also testified Wednesday said the federal government can no longer avoid the issue because of rising drug costs and Americans' growing use of international pharmacies.

They also said the safety issue has been overblown, especially since they are proposing dealing only with licensed foreign pharmacies, not Internet operations of unknown origin.

"The safety concerns largely, if not entirely, melt away," said Minnesota Gov. Tim Pawlenty, who wants to permit Americans to fill prescriptions through licensed Canadian pharmacies. Govs. James Douglas of Vermont and John Hoeven of North Dakota also testified.

Twenty state attorneys general also expressed their support and suggested individual states, which already buy drugs in large quantities for their employees and retirees, could be responsible for safety certifications.

Ryan said prescription drugs can be imported safely by licensing foreign companies, using established distributors of pharmaceuticals in this country and selling the drugs through CVS and other pharmacies.

Even CVS, which Ryan said buys $16 billion worth of drugs a year at wholesale prices, pays 14 percent to 40 percent more than consumers in other countries. Such a difference, he said, tells him that consumers would see savings from imported drugs, even if they are passing through several entities before prescriptions are filled.