ANN ARBOR ? A study released Monday by MichBio, the state?s life sciences trade association, shows if the federal government approves a wholesale drug importation bill now before Congress, it could cost Michigan up to 133,000 jobs and $35 billion in personal income over the next decade.
The study funded by Pfizer, the world?s largest pharmaceutical company, was done by the head of the University of Michigan School of Public Health?s Department of Health Management and Policy.
MichBio Executive Director Michael Witt said the bill in Congress would not only allow cheaper drugs to flow into the United States from Canada, but also from any European Union country, including the newest members from what was the former Soviet block.
?The bill would gut FDA protections of the last 100 years,?? Witt said Monday. ?It would turn regulation of our drugs over to the international community.?
Witt said if the bill is approved by Congress, it also would devastate the state?s growing life sciences industry much the same way the state?s auto industry has been hammered by foreign competitors.
?Prescription drug importation could mean substantial job loss in Michigan and significant reduction in personal net income over the next decade,? said Dean Smith, Chair of the Department of Health Management and Policy, School Public Health, University of Michigan and author of the study, which assessed the impact of three scenarios of R&D investment reduction due to importation.
?An estimated 20,000 to 133,000 jobs and anywhere from $6 billion to $35 billion in personal net income could be lost in Michigan depending on what form of importation is adopted. Importation would require a complete re-thinking of Michigan public policies toward future life sciences investment.?
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The study projects the impact of federal drug importation over ten years and foresees several possible long-term consequences, including:
Decreased total investments in Michigan pharmaceutical and biomedical research and development due to lower expected global profitability;
Reduced direct and indirect pharmaceutical and biotech jobs in Michigan due to changes in the overall scale of industry investments and possible relocation or consolidation decisions;
Decreased availability of U.S.-discovered medicines around the world as a result of company decisions to limit launches of new medicines in international markets;
Diminished patient health benefits as a result of reduced future availability of new medicines from an overall reduction in R&D.
Smith?s study also shed light on several unique aspects of the debate over foreign drug importation, which includes:
Due to Michigan?s fragile position as a national biomedical research center, it is possible that importation would drive existing Michigan life sciences R&D to reduce activity in the state and consolidate in other West and East Coast centers, where broader concentrations of biomedical research activity already exist.
If foreign price controls compelled pharmaceutical firms to limit the launch of new U.S.- discovered prescription medicines, millions of patients worldwide would not have the benefit of biomedical research and product availability.
Experience in Finland and EU nations, where administrative expenses associated with importing firms and insurance companies captured much of the cost-savings, suggests that Michigan?s patients might not directly benefit from importation in the short-run.
?All scenarios for investment and applications to Michigan are dependent upon the particular rules of the legislation, how they would be enforced, investors? concerns about returns in the industry and the relative attractiveness of Michigan as an R&D location,?? Smith said. ?However, legislation to authorize importation of prescription drugs along the lines currently being considered (SB. 2328) could have a substantial impact on Michigan?s economy.
?As a state and as a country, the economic impact of pharmaceutical R&D as a means of employment and personal income should be carefully considered alongside other factors in the evaluation of this legislation,? he said.
