Washington Post Examines Effect of Boston Reimportation Program on Biotech Industry

The Washington Post on Tuesday examined how some Boston officials have "drawn the ire of biotechnology executives" because in July it will become the "largest and most influential city to make it easier for public employees" to reimport lower-cost, U.S.-manufactured prescription drugs from Canada. According to the Post, Boston is "at the center of an emerging tug-of-war between the pursuit of lower drug prices and the desire to remain a hospitable business climate for biotech companies," the Post reports (Finer, Washington Post, 6/1). In February, Boston Mayor Thomas Menino (D) announced that the city on July 1 will begin a reimportation pilot program, which could save the city as much as $1.5 million. Under the program, Boston will allow about 7,000 city employees and retirees who receive prescription drug coverage directly from the city to purchase some medications from Canadian pharmacies (Kaiser Daily Health Policy Report, 4/30). The program, which will last one year followed by a three-month evaluation period, will not allow the reimportation of certain categories of prescription drugs considered "risky," the Post reports. More than 280 biotech companies are headquartered in Massachusetts, and most are located in the Boston area, which has "an attractive synergy of resources" because the city is home to five of the top U.S. hospitals and several large research universities, the Post reports. In addition, the biotech industry accounts for about 17% of the public companies and 18% of the venture capital investments in Massachusetts; the Boston area receives more NIH funds than any other U.S. city.

Reaction
Joshua Boger, CEO of Cambridge, Mass.-based Vertex Pharmaceuticals, said, "To have the economic and political leaders of the Boston area actually asking" for the legalization of reimportation "gives, as it were, license to the rest of the country, which may not have a stake in this industry, to say, 'Well maybe they know better.' This has the potential to be a major trendsetter." Mark Trusheim, interim president of the Massachusetts Biotechnology Council, said, "Some people here seem to think they can have it both ways. Our view is that they can't." According to industry observers, venture capital investment for biotech research and development likely will "dwindle if the importation movement accelerates" because lower prescription drug prices will limit potential profits for new medications, the Post reports. David Stone, managing director of the Cambridge, Mass.-based venture capital group Flagship Ventures, said, "The vast majority of the products the companies develop will never see market. You are basically taking a shot that they will strike it big once, but if the possibility of really cashing in on that is taken away, people will put their money elsewhere." However, Menino said that Boston must consider reimportation because of the high cost of prescription drugs in the United States and the effect on uninsured city residents. Mark Reynolds, a city hall adviser, said, "The mayor serves a wide range of constituencies and the biotechnology industry is an important one. So are the uninsured." Reynolds added that biotech companies have advantages in Boston that outweigh concerns over reimportation (Washington Post, 6/1).

CongressDaily Examines 'Limited' State Reimportation Action
CongressDaily on Tuesday examined how state legislatures this year "thus far have had limited success in moving" reimportation legislation. According to CongressDaily, several state legislatures have had "some symbolic successes," such as a bill passed by the Hawaii House that would call for HHS to legalize reimportation. In addition, the Vermont Senate in March passed a bill that would require the state to provide residents with information on reimportation from Canada, and the New Hampshire Senate has passed legislation that would call for a state reimportation program. The Rhode Island House and Senate also have approved separate bills that would allow licensed Canadian pharmacists to conduct business with the state. The California Legislature has passed a bill that would establish a reimportation program for state agencies and a reimportation Web site for state residents, but Gov. Arnold Schwarzenegger (R) has not taken a position on the legislation. Reimportation bills have failed in the Florida and Virginia legislatures (Albanesius, CongressDaily, 6/1).