October 31, 2003
THEY ASKED FOR IT:
Lawmakers Are Negotiating Import of Prescription Drugs (ROBERT PEAR, 10/31/03, NY Times)
House and Senate negotiators say they are seriously discussing proposals to allow imports of less expensive prescription drugs from Canada, as well as a plan to give the Food and Drug Administration more money and more authority to police the market.The negotiators have worked for more than three months on a bill to revamp Medicare and to add drug benefits to the program. But until this week, they largely avoided the explosive issue of drug imports.
Lawmakers said they discussed it on Wednesday night and again on Thursday at meetings with Tommy G. Thompson, the secretary of health and human services.
"We are considering it," said Representative Michael Bilirakis, Republican of Florida.
Since they both refused to support us at the Un in the Iraq war run-up, why not bankrupt Mexico and Canada by letting their taxpayers subsidize our drug dependency? They'll inevitably have to stop doing so and the program will die a natural death, but not before wiping out many National Health programs around the world. Plus you get the side benefit of a respite on R&D for new drugs as profit margins disappear. In one of those ironies that makes politics so much fun and human nature so amusing, reimportation is a totally counterproductive policy for the general purposes of those who support it. Posted by Orrin Judd at October 31, 2003 9:19 AM
Who is standing up against socialist price controls in the Senate? Nobody.
This is why democracy and economics don't mix.
The issue here isn't so much socialized price controls in Mexico/Canada as it is price discrimination by the drug companies; they're taking advantage of a segmented market to charge the richer US consumers more, because that's what the market will bear.
That only works because it's different markets. If drugs could be freely imported, they'd all but have to set one worldwide price, which puts them in the ugly position where their optimal price - still high in the US, but probably a bit less - may well mean that third world countries can't afford it at all, and any other price will slash total margins.
Whether this is a bad thing for the US or not is very unclear. As Orrin notes, it's not at all clear we shouldn't reduce margins and research. Shortening the patent terms on drugs would have a very similar effect.
Posted by: Mike Earl at October 31, 2003 9:56 AMMike -
The optimal price being too high for many countries simply means they'll break the patents and produce the drugs themselves, as has been done in Brazil (IIRC), and threatened in other countries. They can always claim that they are putting lives ahead of profits, etc. The costs are diffuse and the benefits concentrated, always a thorny problem.
As a matter of fact, it's a problem with intellectual property in general - it's easy to rip off.
Full disclosure: my wife is an executive in the pharmaceutical industry, and I also have worked there in the past (and will probably do so in the future).
Posted by: Bruce Cleaver at October 31, 2003 11:23 AM"... why not bankrupt Mexico and Canada by letting their taxpayers subsidize our drug dependency? They'll inevitably have to stop doing so and the program will die a natural death, ..."
Yes, it's delicious. And the supreme irony is that it would work (i.e., fail for them) for the sme reason that so many of the Liberal policies fail---because they refuse to consider more than one step ahead. They never never ever look beyond the end of their nose.
Posted by: ray at October 31, 2003 6:33 PMIt will be interesting to watch Canadian and Mexican citizens wailing about the coming lack of certain pharmaceuticals in their markets. Those Americans are to blame!
The medicine price controls imposed by governments north and south will have the usual unintended consequences for all concerned.
Posted by: John J. Coupal at October 31, 2003 9:44 PMAnother unintended consequence may well be the quality of the medicine, once this process becomes more popular (i.e., endorsed by more states to save $$$). While the FDA's warnings today (on quality) sound a bit shrill, in just a few years, they might be prescient.
Posted by: jim hamlen at October 31, 2003 10:51 PM"Why not bankrupt Canada and Mexico..."
Because you would then just have to come in and rescue us at great expense 'cause that's what the United States does. Do you not think our current feckless leaders know that?
Posted by: Peter B at November 2, 2003 6:33 AMCool. You are our Manifest Destiny anyway.
Posted by: oj at November 2, 2003 6:35 AM