Stateline Story

Minnesota Governor Leads Fight for Legal Rx Imports

Minnesota Gov. Tim Pawlenty (R) is leading a growing cadre of governors who, in defiance of the Bush administration, are taking steps to help residents import less expensive medicine from Canada as a way to curb rising prescription drug costs.

In a lengthy interview with Stateline.org, Pawlenty said his strategy is to pressure the pharmaceutical industry to change its pricing or, failing that, to prod Congress to pass legislation making drug imports legal. He said the United States is being played as "a chump" because it swallows high drug prices to cover the costs of innovative drug research while consumers worldwide benefit and pay lower prices.

Pawlenty, who is chairman of the Gopher State's campaign to re-elect President Bush, is bucking the Republican White House but said he isn't fearful of being taken to court by federal officials over his state's drug imports. He is one of four GOP governors pushing for imports, a contentious issue that's creating a rift between many states and the federal government and is making waves in the presidential campaign.

"The re-importation of prescription medicines from Canada is a way to put pressure on the federal government and the (pharmaceutical) industry for change," said Pawlenty, who sat down for a discussion of his health care agenda at the Republican National Convention in New York this month.

"What it really boils down to is the need, and the need is obvious. We're paying 30 to 90 percent more than our counterparts in the developing world for prescription medicines, and that's not fair," Pawlenty said. "I think Americans can reasonably be expected to pay a premium for innovation, but there's a difference between paying a premium and being a chump, and we're on the chump side of the ledger in that equation."

Going against the U.S. Food and Drug Administration, which has the power to enforce a federal ban on prescription imports, Pawlenty launched the first state-sponsored Web site to help residents buy lower-priced medicine from Canada. He has forged ahead of his gubernatorial colleagues by waiving $15 insurance co-payments for state employees who opt to get their medicine by mail from Canadian pharmacies.

More than 105,000 people have visited the state's Web site MinnesotaRxConnect and at least 2,500 orders have been placed since its launch in late January 2004, according to the Minnesota Department of Human Services. About 1,000 of the state's 48,000 employees signed up to import medicine from Canada during June, the first month of the program.

New Hampshire, North Dakota and Wisconsin have followed Pawlenty's lead by setting up similar Web sites, and the governors of Illinois, Iowa, Oregon, Vermont and West Virginia also have come out in support of importation.

Elected in 2002, Pawlenty came into the governor's office at the heels of the "larger than life" former wrestler and political independent, Gov. Jesse Ventura. However, the 43-year-old St. Paul, Minn., native has managed to make a name for himself by wiggling onto the national stage with his bold stance on importation.

In fact, Pawlenty recently earned the "dark horse" spot on Wall Street Journal columnist John Fund's list of potential 2008 Republican candidates for president.

The first-term governor has taken his case on importation to Congress and his fellow governors. He has sent teams of state employees to certify pharmacies in Canada and examine industry standards in the United Kingdom. He also has pleaded with drug company executives and the FDA, which staunchly maintains that imported drugs are illegal, unregulated and unsafe.

Pawlenty is playing his cards carefully. He isn't planning to sue the FDA if they don't cooperate, as Vermont is doing and Iowa is considering.

"Right now our focus is on trying to entice (the FDA) into a partnership, and I think if we want to be constructive, potential partners, suing them wouldn't be a good move. They haven't sued us either, so there's a mutual respect to the extent that we're not suing each other," he said.

Pawlenty said he doesn't give credence to FDA's warnings. "As to the safety issue, there's a bunch of junk on the Internet, there are all kinds of shady characters and unsafe Internet sites. But that's not what we're talking about and not what we're proposing," Pawlenty said. "We're talking about identifying a limited number of established, credible, reputable, licensed Canadian pharmacies, and the states, or ideally the FDA, would certify safety standards that apply to those pharmacies, and they would be the ones featured in this relationship."

He continued: "The other argument that comes up is, Well, you're re-importing price controls from Canada.' I find that an amusing argument coming from conservatives or the industry for this reason: It is true that Canada and other countries negotiate prices with the drug companies, and they require government-negotiated prices, but for almost every other product, American consumers and American businesses scan the globe for the best deal.

"We don't get uniquely self-righteous for any other product. We don't say to China: We're not going to trade with you because you're a communist country, you lack modern labor laws, you lack modern environmental laws, you lack a market system, you lack integrity around individual property rights.' We don't get self-righteous with respect to China or other countries ... so why would we pull our punches when it comes to trade with Canada for prescription medicines, even if their system is flawed?" Pawlenty said.

The solution, as Pawlenty sees it, relates to trade and health care. He said the pharmaceutical industry needs to rebalance world prices, which will happen only "if the industry feels the pressure because we are succeeding at re-importation, or eventually Congress gets enough guts to take bold action."

Despite Pawlenty's infectious optimism, he's realistic about what he admits is an uphill battle. He concedes that his brazen actions likely have not had a large impact on drug companies.

"I think our efforts have gotten (the pharmaceutical industry's) attention, but they're having a modest impact on their revenues. I think they're keeping an eye on it, but I don't think they're seriously threatened by it yet," he said. "And they're trying to choke off the (drug) supply to Canada, so we may have to open up the supply lines to other modern developed countries like the United Kingdom or Switzerland."

Pawlenty isn't a one-issue guy. The former technology company executive, attorney and long-time state legislator is taking a broad look at health care reform. He created a Governor's Health Care Cabinet and is holding town hall meetings about health care across the state. Minnesota also recently won federal approval to join a multi-state purchasing pool to negotiate lower drug prices for Medicaid patients, and Pawlenty said he plans to unveil a crop of small-to-mid-scale health initiatives when the state Legislature convenes in January.

Pawlenty also is taking health care into his own hands -- and feet. An avid runner, Pawlenty is training for a marathon in the Twin Cities and just maybe next year's New York City marathon. He also recently completed a Rollerblade marathon in the state capital. "I gained some weight after I was elected governor, so this summer, since I'm not up for re-election, I'm desperately trying to exercise," he quipped.

Flouting federal law isn't an easy road, but Pawlenty said he likes to stick his neck out for the right cause. The governor's efforts have been assailed by some members of the GOP and a Republican administration that opposes imports. Massachusetts Sen. John Kerry (D) supports importation.

"You do take some heat," Pawlenty said. "It's not the most popular thing with some of the people in the Republican Party, and it's certainly not popular with the very powerful drug industry, so I've taken some flak. But you can't change anything if you're not willing to take on the status quo."

Pawlenty said that he's not conflicted over Bush's opposition to drug imports and that bipartisan legislation pending on Capitol Hill to allow imports has a fighting chance.

"I'm not going to agree with (Bush) on everything, ... but I'm still a loyal and excited and enthusiastic supporter," said Pawlenty, a 1980s classic rock fan who also joked that he is still dealing with the heartbreak of Bruce Springsteen's endorsement of Kerry.

"(U.S. Health and Human Services Secretary) Tommy Thompson said some months ago that he thought importation was inevitable' ... so that's at least a glimmer of hope," Pawlenty said. "I think the president has said he's willing to do it if it can be safe, so I'm going to jump up and down and wave my hands and say, Well, let's try it! ... We're willing to try it. We're willing to pay for it. We're willing to put the energy and time into a pilot project. Give us a try."