Insider's Rx For Drug Costs

By: Rebecca Leung

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Pfizer, the drug company Rost works for, declined to talk to 60 Minutes about Rost, but Pfizer's vice president of global security, John Theriault, did tell say that importing drugs is potentially dangerous.

"The position we take is that the more times a product changes hands, the more opportunity there is for the introduction of bad medicine," says Theriault.

"Some people might be skeptical of your saying it's not safe to import drugs from overseas," says Simon. "You do work for Pfizer and all the drug companies tend to lose money if drugs are cheaper."

"I'm not making a pricing argument today at all. But I don't think that patient safety should be sacrificed for affordability," says Theriault. "I think there needs to be a solution to this problem. But opening the flood gates to product from all over the world to freely enter the U.S. market, I think, is a mistake."

"Clearly this is a matter of profits. It's not necessarily a matter of safety," says Rost. "I mean, I think it would be derogatory to claim that Americans would not be able to handle re-importation when the rest of the educated world can do this."

How many cases of death or serious disease have there been due to this practice?

Rost says "there have been none known due to this practice."

So it works? "It works very well," says Rost.

Has anyone in Europe been hurt by taking a bad drug because of parallel trading?

"I don't know that anyone has," says Theriault. "But the point is that we're making the safety issue before that happens."

"My job is to ensure the safety of the American public," says Dr. Richard Carmona, surgeon general of the United States. He recently chaired a task force to study drug importation. It concluded that building a safe system to do it in the United States would be difficult, and very expensive.

"It could be done. The evidence that we have says it could. But the cost to do it, the additional regulatory authority necessary, the hiring of more people, then you have to step back and say, 'Well, is that cost gonna outweigh any savings benefit that we provide the American public,' and that's a very tough one."

"Why are drugs so much more expensive in the United States than they are in almost any other country?" asks Simon.

"The United States does a lion's share of research in the world for research and development of drugs," says Carmona. "That's why the Canadian government sells it cheaper. They don't have the overhead."

The surgeon general's task force report agrees with the pharmaceutical companies -- that if they lower their prices, they'll spend less on creating new drugs, and research and development.

Rost doesn't buy that argument. He says drug companies won't cut back on research and development because it's their bread and butter. They have to develop new drugs or they won't have anything to sell when the patents on their existing drugs expire.

He recently testified before a Senate committee, urging Congress to pass a bill legalizing the importation of cheaper drugs from overseas, even though his own employer is against it.

"Stopping good re-importation bills has a high cost, not just in money but in American lives," says Rost, who says he still works for Pfizer.

Pfizer, however, claims that Rost lacks the credentials to say anything about importing drugs from other countries. The company sent a letter to the Senate committee saying, "We have no basis to support Dr. Rost's purported expertise in this area…" Pfizer also sent 60 Minutes a letter saying: "Dr. Rost has …no substantive grasp of how importation threatens the safety of the U.S. drug supply."

"It's an attempt to discredit me. And they should have known better because they know that I have a lot of experience in this area, so it's completely wrong, and they knew it," says Rost. "I mean, you have an insider here who knows how things really work, who has lived this."

When he goes to work, what kind of response does he now get from his co-workers? "The majority of the feedback has been basically treating me like a sinner, somebody who has fallen from the righteous way," says Rost, who works from home a lot now.

He's still employed by Pfizer, but he's not sure how long that will last.

A bill has been introduced in the Senate that, if passed, would allow the United States to import cheaper drugs from other countries, just as they do in Europe. The pharmaceutical industry opposes it. But the large drug companies have announced they are expanding their programs to offer low cost drugs to the poor.