Thom Hartmann: Peter Pitts on the line with us, he is the former associate commissioner of the Food and Drug Administration in the Bush administration and currently a director with Porter Novelli, a PR firm and president and co-founder of the Center for Medicine in the Public Interest , which had its origins as a project of the Pacific Research Institute, a San Francisco think tank with ties to Phillip Morris. Peter, welcome to the program.

Peter Pitts: Oh, thanks for having me on. I should also add that we’ve never accepted any tobacco money and we were part of Pacific Research Institute for about two months. But thanks for the intro.

Thom Hartmann: Okay, the correction stands. And thank you for that. We have Byron Dorgan from North Dakota and Brian Schweitzer from Montana asking federal officials to allow their states to, their states, not just individuals in their states, but for their state medical programs, to go to Canada to buy drugs. Pharmaceutical drugs. What’s wrong with this?

Peter Pitts: Well, there are really two issues and then I guess there’s the third example of all the states that have already tried this. The two issues, the most important issue is obviously safety. And the second issue is, would this actually, you know, provide broader access to pharmaceuticals? And then the third issues is, why hasn’t it worked in other states?

The safety issue I’ll speak to first because it’s most important. And being a former FDA person it’s the most important to me. Is the FDA can’t regulate drugs from all around the world. And that’s not to say that drugs, if you go to Canada and walk into a pharmacy, those drugs are safe and effective, Canada’s got a world class system. But when you begin to think about drugs from the Internet, and that’s largely what this is about. This is not really about people…

Thom Hartmann: No, they’re asking for their state medical systems to be able to buy, their Medicare systems, Medicaid systems, excuse me, to be able to buy pharmaceuticals from Canadian manufacturers and pharmacies. And in Canada you’ve got the, you know, Health Canada, the Canada Food and Drug Acts and regulations. Some of them are much more rigorous than ours at the FDA. And many of the drugs that we sell here in the United States are made in Canada.

Peter Pitts: No, that’s right. Well, but the point is that the drugs that say Minnesota or Wisconsin, two states that’s kind of toyed around with this process. Illinois under Rod Blagojevich, was they were buying their drugs not from suppliers but from Canadian Internet pharmacies who honestly were telling these states that they were sourcing their products from other countries. So the drugs, which are by the way I should add, not even legal for sale in Canada. So the point about the same drugs that people in Canada get isn’t necessarily true.

Thom Hartmann: Well the fact that somebody did it poorly or did it badly in the past, I mean if, just seems to me that this is one giant shill for big Pharma. The pharmaceutical companies in the United States are ripping off consumers more than any other country in the world. This is a multi billion dollar industry in the United States. Many of our drugs are made outside the United States. In fact according to the Government Accountability Office in 2007 80% of all the pharmaceutical ingredients sold in the United States are made outside the United States. If Canadian drugs are so dangerous, where are all the dead Canadians?

Peter Pitts: Well, first of all, I guess it depends how many dead Canadians you need because there certainly are anecdotal examples of that. But the point is that these, the drugs that are being sent to states who are buying from Canadian pharmacies, are not the same drugs that are for sale in Canada. They are drugs that are being sourced from outside Canada’s borders. So we have to be honest about where these drugs are coming from…

Thom Hartmann: So would you be, would you accept, because Canada has price controls for pharmaceuticals which makes the pharmaceutical industry crazy. Would you accept a piece of legislation that said yes, North Dakota and any other state that wants to do it, frankly, I mean, right now it’s North Dakota and Montana, can buy Canadian pharmaceuticals for sale in North Dakota and Montana but they have to be from an actual real registered Canadian pharmacy or actually from Canadian pharmaceutical manufacturers or wholesalers?

Peter Pitts: Well yes the question is, that those don’t exist. I mean there’s no such thing as…

Thom Hartmann: Of course they exist. How do Canadian pharmacies buy drugs if not from Canadian wholesalers?

Peter Pitts: Well Canadians, they buy, wholesalers buy the drugs from drug companies that have those patents. I guess the question it becomes, you can’t supply a country of 320 million people or a state like California with, you know, 50 million people, from a country that has 30 million people in it. The populations are upside down.

But that kind of raises the second issue is why these plans haven’t worked in the past. And in my mind one of the major reasons is all these states that have had these programs in place, Minnesota, Wisconsin, Illinois, just to name three, is the states have always said they will take no liability for these products. And when people have bought through these state programs, most of them have gone away, oftentimes, I can’t give you an exact percentage, but more than a few hand offs, these drugs have been knock offs, they’ve been generic drugs and drugs that were not ordered. There’s no real quality control and it gets, at the larger level, when you allow drugs to come into this country that are not under the jurisdiction of the FDA the question becomes who is responsible for the quality control if not the state? Somebody’s got to ultimately bear the responsibility for the quality of these products.

Thom Hartmann: And you’re not willing to accept the Canadian government’s quality controls?

Peter Pitts: Well the Canadian government certainly isn’t going to put it’s stamp of approval on drugs that are sold outside of it’s borders. Health Canada has made that extremely clear on a number of different occasions which is why the plans in conference….”

Thom Hartmann: So then why don’t we allow individual states to negotiate, well actually, why don’t we allow Medicare to negotiate with big Pharma. Why don’t we break up some of these giant monopolies here in the United States and have actual competition? We’re talking with Peter Pitts, the former associate commissioner of the FDA in the Bush administration.

We don’t have capitalism in the United States, particularly in the pharmaceutical industry. We’ve got monopoly capitalism. We’ve got giant corporations that are robbing and raping us. They’re draining the blood out of this country and they’re not allowed to do that in any other country in the world. Why do we put up with this other than the fact that they’ve got a whole lot of really highly paid shills that go out there and pitch their products?

Peter Pitts: Well, gee what do you really think? I guess the issue is you know why can’t…

Thom Hartmann: Well address that question.

Peter Pitts: I guess the answer is…

Thom Hartmann: Prove me wrong.

Peter Pitts: Well the answer to the question is one: you have many different companies selling competitive drugs, so I certainly don’t see that as a monopoly situation. And secondly…

Thom Hartmann: How many companies control 70, 80 % of the total drug market in the United States?

Peter Pitts: Well the overwhelming majority of the drugs sold in this country are generic drugs. So what we’re really talking about is the sale of, on patent drugs, which I should add represent about 9 cents on the US healthcare dollar. So yes, you have to put it in the proper perspective.

Thom Hartmann: But we’re really talking about 5 or 6 corporations, aren’t we?

Peter Pitts: Well you have a whole bunch of companies, you have a whole bunch of generic companies. I guess it depends how far you want to go down the money chain but the issue then becomes why does the rest of the world pay a lower price and we pay a higher price which becomes in my opinion a real important trade issue. You know why does the American consumer have to carry the cost of burden for innovation for the rest of the world? And I know the US trade representative just came out with a report …

Thom Hartmann: Except that a lot of these are Swiss companies. Novartis is a Swiss company, Bayer is a German company. I mean a lot of the innovation is not happening in the United States, sir.

Peter Pitts: Well the companies are global companies, they’re all global companies. But the R&D is all done in the US and the…

Thom Hartmann: No it’s not.

Thom Hartmann: The American consumer…. Oh I beg to differ, it most certainly is. If you look at the research budgets of Novartis which is a Swiss company, of Roche Genentech which is a Swiss company, of GSK which is a British company, of AstraZeneca which is a British company, you have Takeda which is a Japanese company, all their R&D is largely done in the United States which is where the expense is, is done.

Thom Hartmann: Hm. Is that because we’re offering them incredible tax breaks for it?

Peter Pitts: Well, this is where the scientists are. Now obviously you know…

Thom Hartmann: Is that because our federal government funds to the national academies, or the National Institutes of Health, most of the research that leads to pharmaceuticals? We’re paying for it with our tax dollars and then they get to screw us for the price of the drugs?

Peter Pitts: When you talk to the people at the National Institutes of Health they’ll be the first person to tell you that the drug discovery work is not done at the NIH. The NIH does extremely important research but drug discovery and development is exclusively, you know a private industry proposition. So the NIH has an important role to play.

And the point you raised earlier which is most drug companies as well as all companies, car companies, computer companies, are able to write off their R&D expenses. So sure they do get to write that off, but that’s the most important part of the proposition and the expense against R&D has gone up dramatically over the past 5 years as we move from small molecule drugs to biologics which are much more difficult; the science is much tougher. So we’re going to have to put more money in if you want to get more product out.

Thom Hartmann: So the question is why, we just have a few seconds left here, Peter Pitts. Why would any country in the world regulate the price of drugs if it meant, you know, let me just reverse engineer the question. Why are other countries keeping the price of drugs down?

Peter Pitts: Other countries keep the price of drugs down because drug companies spend more here and they feel like they’ve got us in a bind. They can steal people’s patents, it’s not fair, and that’s something I believe the government needs to address at a much higher multinational level.

Thom Hartmann: Okay. Peter Pitts, CMPI.org the website. Thank you for dropping by today, sir.

Peter Pitts: My pleasure, thank you.

Thom Hartmann: Yeah, good talking with you. Still not buying it.

Transcribed by Suzanne Roberts, Portland Psychology Clinic.