• This is a partial transcript from Your World with Neil Cavuto, December 23, 2003, that was edited for clarity.

    Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

    TERRY KEENAN, GUEST HOST: Thousands of Americans are now buying their drugs from north of the border, and now some states and cities are trying to get into the act as well, even though the FDA (search) says the practice could be illegal. Well, my next guest says that he’s going ahead with his plans that could save Boston residents millions of dollars in healthcare costs (search).

    Joining me now, Boston’s mayor, Thomas Menino.

    Mayor, welcome. You’re going to be buying these drugs for your city workers. Why?

    MAYOR THOMAS MENINO, BOSTON: Great to be with you, Terry. Why? Because of the reduction in cost.

    FDA has refused to deal with this issue, and it is about time we as cities and states take this matter into our own hands. FDA can work with Health Canada (search) and make sure that they’re safe drugs -- that’s the issue I hear, about safe drugs. While people are buying drugs over the Internet, nobody is even talking about that and how we stop that.

    Why are they trying to stop cities and states from buying them from Canada? We, as a city of Boston, will make sure that the supplier has a certificate from Health Canada that they are safe drugs. Why does the consumer have to pay full price for the drugs? Everybody else gets a discount but the consumer.

    KEENAN: Well, I mean, some people, including people who work at a lot of the companies in your area, Genzyme and a lot of the biotech companies in the Boston area, would say, we have to pay full price because otherwise we’re not going to be able to develop these life-saving drugs.

    MENINO: Well, that is not true at all. They sell the drugs to other countries. Look at the cost of drugs in Germany and Italy, 25 to 35 percent below what you pay for them in the USA. Who does the development of those drugs? American companies, with R&D money from the taxpayers of America.

    Why can’t we do something to help the prescription drug use in America? Why can’t we buy drugs from Canada? Why can’t we create an alliance with Health Canada, FDA? What is the reasoning why?

    Under the new Medicare legislation it gives the secretary of HHS the opportunity to put a pilot program in place. Let’s put a pilot program in place. It also says to the secretary, you must have a review of the prescription drug policy in America.

    I say to the secretary, put an advisory board in place. Don’t let the bureaucrats make the decision. Get some outside advice on this issue. It is an important for all people in America, especially in cities.

    KEENAN: So are you saying you are hoping by doing this, and if other cities and states follow, that you’ll pressure U.S. regulators to force the drug companies to bring down prices here?

    MENINO: I think the pressure is being built up now. You have Minnesota, you have New Hampshire, both Republican governors, myself. You have many other mayors throughout America. It’s a bipartisan issue. It’s not a Democratic issue.

    It is a people’s issues, and that we have to continue to work to force folks to reduce the cost of drugs. Because the money that goes into the research and development comes from the taxpayers of America. Why shouldn’t we get a reduction?

    KEENAN: But, I mean, the drug companies aren’t stupid. They’re not going to be shipping more drugs to Canada than there are people so that they can be shipped back here at 30 percent discounts, right?

    MENINO: OK. So why don’t we reduce the cost of drugs in America? That is the other part of this. Why are drugs in Germany and Italy 25 to 35 percent cheaper than the drugs we buy in America? Answer that question.

    KEENAN: All right. I will...

    MENINO: The same companies develop them.

    KEENAN: I will pose that question to our next guest. Thanks for joining us today. And happy holidays.

    MENINO: Thank you much.

    KEENAN: Good to have you with us.

    MENINO: You too.

    KEENAN: Mayor Thomas Menino.

    Well, joining us now with the other side of the story is Peter Pitts, FDA’s associate commissioner for external relations.

    And commissioner, welcome. Well, you just heard the Boston mayor. He wants to know why drug prices are so much cheaper everywhere else on Earth.

    PETER PITTS, FOOD & DRUG ADMINISTRATION: Well, drug prices are high all over the world because most countries have prices controls that basically allow them to ride on the backs of the American consumer. We carry the costs for R&D and they get good health care. And that certainly has to change. We have to address that problem. The mayor is absolutely right.

    But I should also add that the mayor is absolutely wrong when he says we can guarantee the safety of drugs that come in from foreign countries. I mean, Health Canada is on record saying not even they can guarantee the safety of drugs sent into this country via the Internet or program schemes, like the mayor is talking about.

    So I think these things have to be considered really very seriously, because you really can never trade savings for safety. That is really the foundation of the American health care system. And people can really trust that the drugs we’re getting are safe and effective. And to trade that for some transitory savings that are really even questionable on that front I think is really a bad place to go.

    KEENAN: I mean, we have been fighting all sorts of trade wars here, this year, and it seems like this is kind of a different type of trade war, where the customers, being other countries, are putting price controls on U.S. companies trying to sell their drugs.

    PITTS: Oh, I think you are absolutely right. And the mayor makes a good point.

    You know, the system is very clearly broken. And it has to be fixed. And people are angry, and rightfully so, about the high price of pharmaceuticals. And something must be done.

    But there are things that we can do domestically. You know, FDA is speeding to market generic drugs, and we want to work with states, we want to work with cities on helping them develop plans that can bring safe, quicker access to safe and effective drugs. And that is why we want to work with public officials rather than being in confrontation with them.

    You know, when the mayor says that safety is a bureaucrat’s issue, I think that is very hard to believe. I mean, safety is a public health issue. And we don’t really understand why the mayor would want to endanger the health of the people of Boston with a risky scheme that may not even save his people a lot of money.

    KEENAN: I guess the answer to that is it seems like many Americans don’t care. They are buying their drugs across the border, from Europe, wherever they can get them.

    PITTS: Well, I think the overwhelming amount of Americans are not. They are following the regulatory pattern that FDA sets forth. You know, the gold standard of the world. Although there are a lot of people that need better access to less expensive drugs, and some people are finding as an excuse to get that, to go overseas.

    KEENAN: OK. We’re going to have to leave it there. To be continued another day. Thanks for your insights, though. We appreciate it.

    PITTS: My pleasure. Thanks very much.

    KEENAN: Peter Pitts, from the FDA.