BIO CEO Letter Opposing Importation

Dear Majority Leader Frist:

We, the undersigned biotechnology executives, strongly oppose further
efforts to legalize prescription drug importation. Importation will put patients
at risk, chill investment in biotechnology and other pharmaceutical research
and development, and threaten intellectual property protections.
First, legalizing importation will place patients at risk of obtaining
products that do not meet the FDA standards that patients have relied upon for
decades. Since biotechnology products are unique, many are particularly
susceptible to adulteration, degradation and virtually undetectable
counterfeiting. Many cannot be administered safely by the patient, but require
intervention and/or supervision of a health care provider. BIO believes that the
importation of non-biotechnology products could increase the availability of
unsafe or ineffective biotechnology products.

Second, efforts to legalize importation (and to import foreign price controls)
will have a negative impact on biotechnology investment. The cost and time to
develop a new pharmaceutical product is generally agreed to be more than $800
million and 12-15 years; the costs and time to develop a new biotechnology
product can be substantially greater. Since many biotechnology companies do
not have the financial underpinning provided by multiple profitable products
already on the market, they rely on maintaining a high rate of capital
investment for long periods of time – investment that is made based on an
expectation of a healthy return. National or local policy changes that affect the
potential viability of the biotechnology market (via price controls or any other
means) will affect the willingness of investors to take this risk.

Third, prescription drug importation legislation will erode intellectual
property rights. One bill would prevent U.S. manufacturers from enforcing
their patents against foreign products that, if marketed in the U.S. under current
law, would violate the patent on the U.S. product. Even though the foreign
product is imported into the U.S. market in direct competition with the U.S.
FDA-approved drug, the manufacturer would be denied recourse under U.S.
patent laws. The impact on the biotechnology industry of such a change to
patent rights would be enormous.

Finally, although efforts to legalize importation are intended as a
mechanism to lower the price of prescription drugs, the Congressional Budget
Office and numerous economists have challenged the assumptions of
substantial cost savings, noting both the unique features of the world
pharmaceutical marketplace and the substantial costs incurred by intermediaries
in the proposed import/export scheme that certainly would be passed along to
patients. Moreover, recently introduced bills would impose numerous
requirements that were not even envisioned by the economists who looked at
earlier legislation, so transaction costs under these proposals would be
significantly higher. Additionally, examination by economists of European
parallel imports shows that the expected significant savings for consumers have
not materialized, although the traders have realized tidy profits. None of the
bills recently introduced guarantee that the cost differential for the
importer/exporter actually would be passed along to the consumer.
We urge you to oppose further importation legislation. Importation
measures will harm the biotechnology industry and will, more importantly,
harm the patients we are dedicated to help. Legalizing importation is not the
answer to improving access to prescription drugs. Its promise is false and its
dangers are real.

Sincerely,

Richard F. Pops

Carl B. Feldbaum
Bob Booth
Steve Boggan
Mike Alder
Charles E. Bugg, Ph.D.
Royce L. Watkins
Dante J. Marciani
Mike Allen
Lawrence W. Greer
David E.I. Pyott
Duane J. Roth
Dennis M. Fenton
Ginger L. Graham
Kleanthis G. Xanthopoulos, Ph.D.
Gerald J. Yakatan, Ph.D.
Matt Gardner
John P. Walker
Joseph D. Panetta
Frederic D. Price
David Gollaher
David F. Hale
Stephen A. Sherwin, M.D.
Richard W. Hamilton
Howard Pien
Lawrence C. Fritz
Tom Wiggans
A. Stephen Dahms
Louis G. Lange
Jay M. Short, Ph.D.
Dan Browne.
Thomas Okarma
John Martin
Evan B. Siegel, Ph.D.
Steven J. Mento, Ph.D.
Gregory T. Lucier
Martin D. Cleary
Lewis J. Shuster
David E. Robinson
Larry G. Stambaugh
Walter H. Moos
Robert Chess
Paul Freiman
Ted W. Love, M.D.
Hollings C. Renton
Jennie P. Mather
Edward Lanphier
James Mitchell
Timothy J.R. Harris, Ph.D.
Jeffrey N. Peterson
Rick E. Winningham
David V. Goeddel
Benjamin F. McGraw
John L. Castello
Denise Brown
Timothy C. Rodell, M.D.
Colin Foster
Paul R. Pescatello
Kevin Rakin
David R. Brennan
Thomas McLain
Charles A. Rice
John Spencer, Jr.
William D. Johnston, Ph.D.
David Miller
Norbert Riedel
James Hussey, MBA
Sidney Taurel
Vickie Hall
Doug Getter
Alex Day
Kenneth C. Carter, Ph.D.
Shirley Gotner-Arnowitz
Rachel K. King
William A. Haseltine, Ph.D.
Douglas A. Doerfler
C. Robert Eaton
David Mott
David P. Wright
Carol A. Nacy, Ph.D.
Dyan Brasington
Russell Herndon
Una S. Ryan Ph.D.
James C. Mullen
Michael Webb
Henri A. Termeer
Geoffrey F. Cox
Mitchel Sayare
Mark Trusheim
Mark Levin
Steven M. Rauscher
Diedre Gillespie, M.D., M.B.A.
Fereydoun Firouz
Garen Bohlin
Joshua Boger Ph.D.
Christopher Perley
Duffy DuFresne
Michael Witt
James V. Adam
Ray Frost
Saint Paul, Minnesota
David Sethman
Debbie Hart
James B. Palmer, M.D.
John Jackson
Bruce A. Williams
Joseph C. Scodari
Martin Soeters
John H. Johnson
Robert Pestka
George Abercrombie
Nutley, New Jersey
George A. Oram
Ron Cohen
Göran Ando, M.D
Gary K. Zammit, Ph.D.
Frederick Frank
Timothy Cooke
Karin A. Duncker
Fred Telling
Lynne H. Parker
Michael P. McDermott
Peter F. Young
Joseph Akers
Scott Uknes
Nancy Wysenski
Chris Viehbacher
Clint G. Dederick, Jr.
J. Donald deBethizy, Ph.D.
J. Bruce Kaylos
Gil Van Bokkelen
Anthony J. Dennis
Bruce A. Peacock
Raymond K. Houck
Tony Vernon
Frank Baldino, Jr.
David W. Anstice
C. Boyd Clarke
Fritz Bittenbender
William B. Wiederseim
Mickey Flynn
Robert R. Ruffolo, Jr.
David Bengston.
West Greenwich, Rhode Island
Anthony Boccanfuso
Dennis Grimaud
Patrick. B. Flanagan
David Anderson
Michael T. Redman
Nancy Chang
Tom Kowalski
Peter D. Meldrum
Brian H. Moss
Mark Herzog
Randal Hassler
Erick Rabins
Paul Clark
Albert A. Luderer, Ph.D.
Steven C. Quay, M.D., Ph.D.
Ruth M. Scott
Bruce L.A. Carter