Establishment Democrats Vote Against Amendment to Allow Americans to buy Prescription Drugs from Canada


Sipa USA via AP

Senator Cory Booker (D-NJ) asks a question to Oklahoma Attorney General Scott Pruitt during the Senate Environment Committee, for his consideration to be Environmental Protection Agency Administrator, in the Dirksen Senate Office Building, in Washington, DC on January 18, 2017 (Photo by Riccardo Savi) *** Please Use Credit from Credit Field ***(Sipa via AP Images)

Luke Dalessandro, Politics Editor

An Amendment drafted by Sen. Bernie Sanders (I-VT) and Sen. Amy Klobuchar (D-MN)  which would have encouraged the federal government to allow Americans to purchase pharmaceuticals from Canada, where they consistently rank substantially cheaper went to the Senate floor on January 11th.

While the Amendment was generally expected to fail to pass, the manner in which it did fail to pass was not. As opposed to sticking to party loyalties which many expected, 13 Republican Senators voted in favor of the Amendment, however, 13 Democrats flipped against Sanders to oppose it.

The Amendment could have passed with the Republican votes it ultimately got, including that of Republicans with generally libertarian leaning positions, including Rand Paul, as well as multiple other Senator’s including Texas Senator Ted Cruz. Among the Democrats who flipped against Sanders were Chris Coons of Delaware, and New Jersey’s own Senator Cory Booker.  They voted against the highly symbolic Amendment in spite of high public approval for it, a recent Kaiser poll conducted in 2015 reveals when asked the question of allowing Americans to but prescription drugs imported from Canada, 69% of Democrats referred to it as favorable, furthermore 76% of Independents and 75% of Republicans also agreed to this as a favorable solution to lower drug costs in the U.S.

In support of the Amendment Bernie Sanders tweeted out a now well known diagram comparing prices of popular pharmaceuticals in Canada compared to the U.S. The diagram reveals this through comparisons in Abilify, a common drug for depression, costs on average $2,626 in the U.S while only costs $436 in Canada. At the same time, Nexium, a common pharmaceutical for heartburn, while costing $736 in the U.S while only $214 in Canada.

The comparison of drug prices in Canada compared to the U.S, released by co sponsor of the Amendment encouraging importation of Canadian pharmaceuticals, reveals many common drugs in Canada cost less than 25% of what the same drug would in the U.S.

Americans have now long since favored permitting the U.S government to negotiate prices of medications with drug companies for those on Medicare, with a Kaiser Poll also finding such a solution favorable to 93% of Democrats, 83% of Independents, and even 74% of Republicans. On top of widespread public approval for an initiative to do this, it is also viewed as an effective solution, with 88% of Democrats, 74% of Independents, and 56% of Republicans referring to it as an effective method to lower drug prices.

In contrast to most of the industrialized world, Medicare, which covers over 55 million Americans, is not permitted by law the ability to negotiate prices of pharmaceuticals with private sector drug companies, per the Medicare Drug Benefit, created in 2003. At the same time while drug prices remain far more than countries with a single payer healthcare system such as Canada or Great Britain, the U.S also spends much more on pharmaceuticals than other OECD (Organisation for Economic Co-Operation) countries. Based on pharmaceutical expenditure in 2013 among OECD nations, based on PPP (Purchasing Power Parity) the U.S ranks as the highest by a substantial margin, ranking the highest in both prescribed and over the counter medicines, in total spending more than double the OECD average expenditure.

Based on pharmaceutical expenditure in 2013, the U.S spends 1,026 relative to PPP on total pharmaceutical spending, far more than the next highest country, Japan, who spends only 752 relative to PPP, and spending more than double the OECD average.

A common case made for the high prices of pharmaceuticals, is based on innovation taken by private insurers and companies in developing new novel drugs. Often used to justify this is expenditure on Research and Development made by biopharma companies. On average, companies in the biopharma industry expend approximately 23.4% of revenue on Research and Development (R&D). Similarly, competition in the industry is often cited as a solution to getting drug prices down. However, historically in the U.S competition has not been an effective solution to the end of lowering costs.

A key example to explain this would be the rise in insulin prices since 2001. There is certainly a competitive market for insulin in the U.S, many companies including Eli Lilly and Co, Sanofi Aventis, and Novo Nordisk produce and sell insulin. However this has not driven down prices like many other industries, specifically a vial of Sanofi insulin, ‘Lantus’ sold for $34.81 per vial in 2001, however since the last price raise for ‘Lantus’ which happened in 2014, the price for the same vial of insulin has inflated to $248.51 per vial. However this was certainly an effect of Sanofi monopolizing the insulin market, as in 2006 a new brand of insulin known as ‘Levemir’ was released in 2006 by competitor Novo Nordisk, starting at $66.96 per vial. Today Levemir costs $269 per vial, a price very similar to the price set by Sanofi. Evidently competition has done little in driving down prices of insulin, despite the competition in the industry, and the prices have steadily rose (by a factor of over 600% in the case of Lantus) for the same product. This is a practice known as ‘Shadow Pricing’ a practice in which prices for competing drugs, rather than being driven down by competition or innovation in R&D, rise in lockstep with each other.

insulin prices lantus levemir V2
As opposed to competition driving down prices, in many cases in the pharmaceutical industry the prices for competing drugs rise in lockstep with each other, the opposite of what competition generally is intended to do in other industries. Two competing insulin sellers have had the ability to price gouge consumers despite competition in the market.

At the same time, many companies in the industry have monopolies on certain products which are in practice government protected. Specifically the U.S has in place a patent system which allows manufacturers to consistently remain the sole manufacturer of drugs that they have had a patent on for an excess of 20 years, allowing them to monopolize said drugs with protection from the implemented patent system. To this end the purpose of the patent system is to promote innovation, which while it often succeeds in, allows exclusivity and absolute market control of prices of drugs that are often necessary to treat highly uncommon diseases.

However, while importation of Canadian pharmaceuticals appeared to be a short term solution for Americans who can not afford drugs produced in the U.S, New Jersey’s Democratic Senator Cory Booker evidently saw flaws in the Amendment. During a statement to the media after the vote, he explained that he believed the Amendment’s lack of a protection for consumers which facilitated that imported drugs meet U.S safety standards. He said, “any plan to allow the importation of prescription medications should also include consumer protections that ensure foreign drugs meet American safety standards. I opposed an amendment put forward last night that didn’t meet this test.”

In spite of this the safety excuse fails to hold itself, as a majority of drugs that would be imported from Canada were already manufactured in the U.S or by U.S corporations with facilities in Canada. With the Canadian governments price negotiation system, drugs fall to a much cheaper price than in the U.S. Referring to this same argument, former governor of Minnesota Tim Pawlenty once asked during his own push for importation, “My first response to that is to show me the dead Canadians. Where are the dead Canadians?”

However, many democrats who flipped on the vote are longtime recipients of donations from special interests in the pharmaceutical industry, Booker himself has received more money from pharmaceutical manufacturing companies over the past six years than any other democratic senator, at $267,338. Other democrats who voted with Booker as well are close friends with the industry, with Casey, Pat Murray, and Michael Bennet having received more than $100,000 from the pharmaceutical industry.