FIRST, DO NO HARM: BEWARE IMPORTED DRUGS

By Curtis Ellis

Beware the law of unintended consequences.

This is the iron law that kicks in whenever Congress or a regulatory agency takes action.

The latest warning comes in light of a proposal from the FDA, the Food and Drug Administration, to set up a working group on drug importation.

The proposal comes in response to a very real problem. Some drug manufacturers exploit their virtual monopoly power over the supply of particular drugs by dramatically raising their price. And we’re not talking about novel, new drugs under patent protection.

62-year-old drug (well outside the limit of patent protection) used to treat parasitic infections went from $13.50 to $750 a tablet after it was acquired by Turing Pharmaceuticals, a start-up run by a former hedge fund manager.

A tuberculosis drug jumped from $500 to $10,800 after its manufacturer was acquired by another company.

The price of doxycycline, a decades-old antibiotic, rose to $1,849 from $20.

The administration has taken steps to use market forces to drive down prescription drug costs. One of the initiatives speeds up the review process for generic drugs that will compete with branded drugs. These are long overdue and worthwhile.

But in looking overseas for a solution to rising domestic drug prices, one risks invoking the iron law of unintended consequences.

Few are aware of the degree to which the American pharmaceutical industry has been outsourced.

Decades ago, penicillin, vitamin C and many other prescription and over-the-counter products were manufactured in the United States. But now, key ingredients for essential drugs sold in the United States, from antibiotics and antidepressants to blood pressure medicines and cancer drugs, are made in China. That’s according to Rosemary Gibson and Janardan Prasad Singh, co-authors of the book “ChinaRx: Exposing the Risks of America’s Dependence on China for Medicine.”

China is the world’s only source of antibiotics, including the main ingredient in vancomycin, a treatment of last resort used to treat infections resistant to other antibiotics, Gibson says.

Now, China is boosting exports of generic drugs to the U.S. as well as ingredients for manufacturing them.

Pharmaceuticals are on Beijing’s Made in China 2025 list of key industries it seeks to dominate globally.

China secured its commanding position in the drug industry the same way it did in so many others: State-owned Chinese companies, subsidized by the government, undercut established manufacturers in the U.S. who then shut down American factories and research facilities and moved to China.

All this is to say that as the FDA examines importing prescription drugs to cure rising prices, it should consider the possibility of secondary infection.

Single suppliers of prescription drugs drove the price spikes the FDA is seeking to remedy.

But if we become dependent on China for all our medicines, as the U.S.-China Economic and Security Review Commission warns, what’s to stop state-owned enterprises under the command of the Chinese Communist Party from jacking up prices the same way American hedge-fund trader Martin Shrkeli did?