resurrectionsong

August 19, 2004

And, Finally...

Just saw this on CNN:

With political pressure mounting to allow imports of cheaper prescription drugs from Canada and other countries, President Bush appeared to move closer to supporting the idea Wednesday -- but only if the safety of the drugs could be assured.

This issue isn't safety of drugs. The issue is allowing the governments of other nations to set price controls on drugs researched and manufactured in the United States and then calling the process a free market.

Government price controls don't sit well with me to begin with. Canada and the EU setting drug prices for our market sounds even worse. This foolishness comes only because it's easy to point angry fingers at those big, faceless drug companies who profit off of our misery.

Remember to be a little thankful for the new drugs that they've given us and the better lives that many people lead because of these drugs that even twenty years ago would be labeled miraculous. And if that doesn't work, just remember that if the drug manufacturers can't set their own prices, their research and development will suffer--and that means that the future cure for baldness or arthritis or asthma that would make your life measurably better may not come in time to make a difference to you.

Reimportation is a recipe for short-term lower costs (although that will very likely rectify itself when companies create their own solution, possibly setting quotas for how many pills they will send overseas--leaving little more than is necessary to cover "legitimate" needs). Long-term effects are harder to predict. Will drug companies abandon the US the same way that they've abandoned Germany? Will it simply depress research and development by forcing the companies to run significantly leaner?

If the companies do leave the US, there will be a cost in jobs and economic performance.

Don't do it, Mr. President. I know the pressure is great, but it is decidedly not the right solution to the problem.

Read the story.

Posted by zombyboy at August 19, 2004 01:13 AM

Comments

Like you, I am normally opposed to the government getting in the way of the open market. On this point, however, I am with you 100%. People who see drug reimportation from Canada as a solution are short-sighted and selfish. Drun R&D costs money - a lot of it. The high prices of many drugs are a direct result of that. It isn't about drug company execs sticking it to the poor, it is about very real fiscal needs - the need to generate the funds necessary to recoup the costs of past R&D and to generate the funds for future R&D. The only reason that drugs in Canada are so cheap is that the government there screws up the market by through price controls. The result is that the drug companies have to charge more. Reimportation, like you said, would undercut the market here, thus robing the drug companies of the funds that they need for future R&D. The direct result would be increased loss of life as drug comapny R&D is reduced. Our "friends" to the north are actually doing us a grave disservice through their price controls. If the Canadian government would lift those controles the drug companies would charge Canadians more, but they would then be able to reduce the costs here. Basically, the Canadian government is taking advantage of the affluence of Americans for their own short term gain. This is no different that the wealth-redistributing "taxes" proposed by the UN and one more reason to reconsider the word "friend" when referring to Canada.

Posted by: Jerry at August 19, 2004 07:00 AM

To coin a phrase...

Blame canada!

How the hell did the words "ally" and "friend" come to mean "people who screw us over for their own self-interest." To coin another phrase, "with friends like these [Canada, France, Germany..], who needs enemies?"

Posted by: Jerry at August 19, 2004 07:02 AM

Yes, it boggles my mind that people think they're getting "something for nothing (TM)" by re-importing drugs from Canada that we sent them in the first place!

Of course, bush is in a double-bind here. If he doesn't do it, dems and populists will claim he's just bending to pressure from "Big Medicine."

Posted by: bryan at August 19, 2004 08:33 AM

You are absolutely right, Bryan. He truly is damned if he does, damned if he doesn't.

Posted by: Jerry at August 19, 2004 08:35 AM

Aren't the Canadian price controls on these products a violation of NAFTA or of the WTO? Wouldn't we then be justified in barring further exportation of U.S. prescription medications to Canada until those controls are lifted?

Posted by: McGehee at August 19, 2004 09:08 AM

That's a really interesting angle--I hadn't thought of it.

Anyone knowledgeable enough on NAFTA in particular to say whether there could be something to this idea?

Posted by: zombyboy at August 19, 2004 10:08 AM

Even if this is true, I doubt the it will make any difference. Remember, the Canadians are our "friends."

Posted by: Jerry at August 19, 2004 10:14 AM

All NAFTA members are "friends," so that's actually a point in the direction I'm thinking.

WTO is supposed to squelch preferential or punitive trade policies that affect other nations adversely. I believe an argument can be made that Canadian price controls effectively have U.S. drug buyers subsidizing Canadian drug buyers -- hence an illegal trade policy.

I'd really be interested to see whether there are legitimate arguments against this view.

Posted by: McGehee at August 19, 2004 10:39 AM