Extended Interview

SUSAN DENTZER:

How much is [Illinois] spending on prescription drugs?

ROD BLAGOJEVICH:

Currently, the state of Illinois is spending $1.6 billion a year on prescription drugs for a variety of different programs that are available. And anything that we can do to bring down that cost is obviously a big help, not just when it comes to our budgets, but for men and women who have to buy medicine and have a chance to get it for less money.

SUSAN DENTZER:

And what do you estimate this proposal would save in terms of state expenditures on drugs?

ROD BLAGOJEVICH:

If the FDA allows the state of Illinois to go to Canada and purchase the same amount of medicine that we purchase here, made by the same companies that make the medicine that we purchase here, we could save for our consumer and our tax payers $91 million, and when you're talking about big budget deficits, $91 million is a lot of money.

And when you're talking about having a government that's going to be more efficient and more responsible to the taxpayer and run government more like a business, where businesses shop around for the best prices they can find, it seems to me that the FDA ought to change its policy and give us the opportunity to try to do this.

SUSAN DENTZER:

Describe what your proposal is and what you've asked the Department of Health and Human Services to do.

ROD BLAGOJEVICH:

Recently I sent a letter to the secretary of the Department of Health and Human Services asking them to join them in a pilot program where the state of Illinois and the Department of Health and Human Service can put together a pilot program and develop a program, where we can import prescription drugs from Canada, and do it under FDA guidelines, do it for only FDA approved medications and work together to be able make sure we address the safety concerns that have been raised, but understanding of course that if we are successful in this effort we can go a long way towards saving American consumers literally tens of thousands and tens of millions of dollars a year on the cost of prescription drugs.

So far they've not responded to my request, but we're going to keep asking because we think that this makes a lot of sense. We do not want to go to Canada without the permission of the FDA. Instead what we want is to convince them that their continuing policy of not allowing American consumers access to the marketplace, even though they know that every single year over one million Americans go to Canada and purchase prescription drugs. Even though they know that Americans have been doing this now for nearly ten years. We believe that since they allow that to happen that even thought they've raised concerns about safety, we want to be able to work with them to develop a pilot program and a plan so that we can alleviate whatever concerns they have regarding safety, safeguard the importation of prescription drugs from Canada, and, importantly as anything, help American consumers deal with the high price of their medicine.

SUSAN DENTZER:

Describe for me in just overview terms how you conceive of this working. A couple of big trucks driving up to Canada bringing drugs here all being distributed through one pharmacy? How do you perceive this is going to work?

ROD BLAGOJEVICH:

Well, there's several different approaches we could take, and we're not suggesting to the FDA or the Department of Health and Human Services precisely what method it ought to take, we're eager to hear some of their thoughts. Unfortunately we haven't been able to get them to respond to my request, where we work together in a constructive way to develop a plan where we can go to Canada and import prescription drugs and allow American consumers access to those drugs.

One approach could be, to be across the border and purchase, wholesale, large quantities of different medicines approved by the FDA. Another approach could be to explore the possibility of the use of the Internet. There are other concerns that relate to controlling the chain of custody and other safety concerns, but those are things that I think need to be discussed and considered.

We're not suggesting that we have a foolproof way of doing it though we think we can pretty much create one. Instead what we're saying to the FDA is, "Work with us, we have some of your concerns, we'd like to see what you would suggest we do when it comes to the importation of prescription drugs" and I would imagine that many of the ways that you import foodstuffs from Canada — which happens to be the United States number one trading partner — some of those safety provisions that are part of the FDA rules and regulations, I would imagine that many of those can be utilized when it comes to importing prescription drugs from the same place for the reasons I stated earlier, to reduce the high price of medicine for American consumers and Senior citizens.

SUSAN DENTZER:

The Canadian government says that it can't assure the safety of drugs that would be exported to the U.S. from Canada. The FDA says that it can't assure the safety of drugs that might be imported from another country to the U.S. So both sides, both the U.S. and the Canadian government seem to be saying that there's a huge regulatory gap here which nobody can step in to fill and nobody can assure the safety of drug shipped across the border.

ROD BLAGOJEVICH:

These are the same things that the FDA has been saying now for several years. It's the justification and the rationale for denying American consumers access to Canadian medicine, medicine that was made buy the same drug manufacturers that we purchase form here in the United States, the exact same medicine, but medicine that you can purchase in Canada for prices that are substantially lower.

Having said that, the FDA is well aware of the fact that for the last ten years, every single year, over a million Americans have crossed the border to purchase prescription drugs from Canada. The FDA is equally aware that they can't come up with one example of one person that was harmed because he or she went to Canada and purchased the same medicine made by the same company. And the fact that the FDA would on the one hand would raise safety as a concern, and on the other hand look the other way when every year a million Americans cross the border to Canada, and buy their medicine, and then come back to the United States and still allow them to do it. To me that's a fundamental contradiction, either they're safe or they're not and if the FDA really means that they can't guarantee safety, then they ought to do something about stopping the one million Americans who are crossing the border every year to purchase their medicine. Otherwise their derelict in their responsibilities to keep Americans safe. But I suspect the real reason is that the FDA simply is not willing to explore a new approach to bring down the prices.

The motivations are anybody's guess, but it's no secret that the big pharmaceutical companies have a great deal of influence in Washington. In fact on the legislation that Congressman Gutknecht and Congressman Emanuel passed out of the house, the pharmaceutical companies hired more lobbyists than there were members of the U.S. House of Representatives. There were over six hundred lobbyists lobbying 435 members of the house and I suspect that has more to do with the positions that are being taken in Washington than some of the safety concerns because if it was really about safety, then the FDA wouldn't allow a million Americans to go to Canada as they've allowed every year for the last ten years.

SUSAN DENTZER:

So the FDA is in the pocket of the drug companies?

ROD BLAGOJEVICH:

I don't know whether or not it's the FDA or others higher up in Washington, what their motivation might be regarding just how severe their relationship might be, but I do think it's a question worth asking. How is it that over a million Americans are allowed to go every year and buy medicine in Canada, medicine made by American companies, the same medicine we buy here, and there hasn't been one single case where someone has been found to have been harmed from that, and they continue to raise the safety issue? But, I do think it's legitimate to ask, maybe they do need to listen more to the American people, to the American consumer and less to all those lobbyists who work for the big drug companies who are essentially acting as guardians for a price structure that is anti-competitive, anti-marketplace, and essentially designed to maintain these huge profits that the big drug companies have been enjoying at the expense of the American consumers.

SUSAN DENTZER:

The FDA has said on a number of occasions that its great concern is that the desire to import drugs from Canada will create this giant sucking sound of American demand for drugs which the Canadians can't meet and so it will be an instigation for drugs to be coming in from third countries many of them in many cases counterfeit.

ROD BLAGOJEVICH:

…[I]f Americans are allowed access to the Canadian marketplace when it come to their medicine, what will happen is that the free market will be allowed to flourish and prices in America will come down and therefore there will be some correction in the prices in Canada, the likelihood is that some of the prices that Canadian consumers are paying may go up, the prices in countries like Italy and France and Germany, that also have artificially low prices, significantly lower than American consumers pay for the same medicine, those prices will likely go up a little bit as American prices go down.

In short, the marketplace will correct itself and it will stop this artificial practice where a price structure has been created, almost in a monopolistic way to protect the big profits of the big drug companies, and preserve the low prices that Canadian consumers, French consumers, German and Italian consumers pay while the American consumer is paying these extraordinarily high prices essentially paying the freight for consumers in other countries. Let the marketplace dictate what these prices should be, give American consumers access to the marketplace.

SUSAN DENTZER:

You don't think there's any risk that if you were to set up this program, that somebody in Illinois would end up getting a fake drug from Bangladesh or someplace else that got shipped through Canada, found its way into the Canadian distribution system and got shipped here everybody believing that it's a certified Canadian drug but it turns out that its a fake drug from another country. You don't think that could ever happen?

ROD BLAGOJEVICH:

I think those who are suggesting that are throwing red herrings in the way of what we're attempting to do. The fact is we want to work with the FDA to build a program to make sure that we import prescription drugs from Canada in such a way that prevents that very scenario from happening. They can help us to develop that sort of program just as they've been able to keep those very types of things from happening here in the United States today. The fact that they keep raising it is more of an excuse to justify their refusal to even talk to us about working together to build a program that would allow us to import drugs safely and efficiently from Canada and therefor reduce the prices that American consumers pay. We're not talking about going to Bangladesh or other countries to import prescription drugs.

My request is only one country, Canada, a country that is our number one trading partner, a country that is just across the border to the north of us, a country that historically has had very good relations with the United States, a country that has had relatively loose borders vis-a-vis our country, and a country that does a lot of business with America and why should it be any different when it comes to medicine and prescription drugs, particularly when those very medicines and prescription drugs were made by companies here in the United States.

SUSAN DENTZER:

Does it strike you as illogical that we're here in a country that has decided not, for whatever reason, good or bad not to control drug prices so now we're going to piggy back off of all the other countries that do make efforts to control drug prices?

ROD BLAGOJEVICH:

No, what we're advocating is not price controls but free market principals. What we're saying is allow American customers access to the marketplace in this increasingly global economy that we live in. The fact is that today in Illinois and around America, too many Americans have lost their jobs because of this global economy, too many Americans have lost their jobs because we've had trading policies that have been premised on the notion that we nee to allow the marketplace, around the globe, to dictate the demand and supply and the movement of goods and services around the world.

It's interesting how many of the advocates for those policies somehow are not advocating those same free market principles when it comes to giving American consumers and our senior citizens access to the global economy and lower prices on medicines that were made here in the United States. And, to me the inconsistency really is on the part of those who are denying American consumers access to the free market.

SUSAN DENTZER:

Why not just pass a law that Illinois will only pay so much for drugs?

ROD BLAGOJEVICH:

Well, we're doing a lot of different things here in Illinois, we're the first state in the nation to have a buying club where we're inviting our senior citizens, all 1.5 million of them here, to purchase, to be part of a purchasing club where we can then leverage their buying power by pooling their buying power together and negotiate lower prices for our seniors.

We think we're going to be able to reduce prescription drug prices here in Illinois by 20 or 30 percent but this idea is also one that is predicated on free market notions which is to say you pool buying power and negotiate lower prices by shopping around and ultimately the profit motive on the part of the seller will be such that there apt to negotiate a better price if they can get the business. What were trying to do is be consistent with what the principles of our economy are and that is allowing Americans' choices…

SUSAN DENTZER:

Many people who believe that there is a problem with the prices of drugs say that what needs to happen now is that there needs to be a global solution to this, that Canadians are not paying enough for research and development for drugs, many other countries are not paying enough, that Americans are in effect overpaying their share of the burden of R&D. So, if anything, a more global solution to this problem has to be addressed as opposed to just trying importing drugs from the countries that are underpaying their fair share of R&D expenses. What do you say?

ROD BLAGOJEVICH:

Well, I think one of the things that the big pharmaceutical companies don't talk too much about, and it's not something they volunteer, is the fact that American taxpayers for years have been very generous with tax credits — research and development tax credits — that give the big pharmaceutical companies the ability to do the research and development that they've been successful at. But it isn't so much the huge profits they're bringing in that gives them that opportunity, it's the generosity of the American taxpayer who's been providing tax credits for research and development for years. Second, I have no objection to a more holistic approach — a more global approach — to the issue of prescription drug costs and medicine, but don't let that be an excuse to keep us from doing something that's so immediately available and that makes so much sense, and that is, give Americans access to the marketplace in Canada to get the same medicine that they can get here at half the price. And some Americans will choose to do it, and others may not. But give Americans the freedom to make choices like that and stop denying them the freedom to make such choices.

SUSAN DENTZER:

You're trying to organize a summit now with Governor Pawlenty in Washington for later in February. What do you plan to do?

ROD BLAGOJEVICH:

Well, we're working on the particulars now and Governor Pawlenty from Minnesota is a member of the other political party, which is to show that on an issue like this — because its so real to people in all parts of our country — it's not an issue that impacts a member of the Democratic party or the Republican party any better or any worse.

This is an idea that has bipartisan support and Governor Pawlenty has been a champion in Minnesota, and is now working with us to encourage other governors to join in this effort and continue to put pressure on those policy makers in Washington who are essentially siding with the big drug companies against the American consumer. In the final analysis, this is what this is really about: whose side are you on? Are you on the side of senior citizens in our country? Are you on the side of American consumers in our country? Or are you on the side of big drug companies? And the good news is that there are Democrats and Republicans who believe we should be on the side of the American people. This is what this is all about, and this is why this idea will ultimately prevail.