Skip to comments.Don't Import Rx Price Controls Into U.S. Health Markets
Posted on 10/20/2011 7:47:22 AM PDT by 92nina
This afternoon, the U.S. Senate will be voting on an amendment to H.R. 2112, the Agriculture-Commerce-etc. appropriations bill for FY 2012. The amendment (#769) is being offered by Senator David Vitter (R-La.)
The amendment in question would allow Americans to purchase prescription medicines from Canada. On its face, this is a pro-free market amendment. Why should the government prevent people from buying goods or services from anywhere they want to, especially a developed nation like Canada?
The free market answer is that consumers would often not be importing just the medicine, but also the price control. In most countries, the prescription drug industry labors under burdensome government-imposed price controls. These price controls allow politicians to give voters seemingly-cheap medicines, but there's a heavy price. Since the drug companies are left with little or negative profit, there is virtually no money left over to finance the next generation of drug research and development.
One of the only countries left that allows drug prices to be (mostly) set by the free market is the United States. The profits made here finance the next generation of life-saving and life-improving prescription medicines. If the U.S. market suddenly gets flooded with price-distorted drugs from all around the world (they only need to make their way to Canada first), our drug market will be permanently-damaged by price controls in other countries.
Think about it this way: suppose you are taking a blood pressure medication that costs you $50 per dose. This amendment passes, and you start to purchase a medicine from Canada (really, from anywhere) that only costs $20 per dose, thanks to the price control in the other country. You would be a fool not to take that deal. Millions of other Americans do the same, and suddenly no one is buying the $50 version of the drug anymore. No new drugs have entered the country--it's the exact same medicine whether it's a market-set $50 or a government-set $20. But price controls dictated by foreign bureaucrats has entered the country, totally distorting our drug market. By importing price controls today, the miracle drugs of the future are strangled in the crib. All the capital for future R&D is gone.
The Vitter amendment would be a good idea in a world free of market-distorting price controls. Free trade is a good thing. But free trade requires transparent prices set by markets, not by governments.
Read more: http://www.atr.org/dont-import-rx-price-controls-u-a6539#ixzz1bKi7Un2X
They decry drug shortages, then support price controls that insure that the shortages will worsen.
The next step is that Pharma companies are going to need to get money from governments to offset the difference because of price controls. OR....
The pharma companies are going to have to stop selling their drugs in certain countries when the patens expire.
If the government get’s involved in helping the pharma companies overcome the shortfall that the government first imposed, guess what. That’s the end of cheap medicine as we know it.
It might be fine to argue from a free market perspective, if there actually were a free market in pharmaceuticals.
Most of the drugs which drive prescription costs upward are not sold in a free market, but under government granted monopolies called “patents”. (I remind you all that the first modern patent law was the Statute on Monopolies of 1624, which limited grants of monopolies by the British Crown to new inventions and limited terms, and thus was the basis, along with the Law of Queen Anne on copyright, for our constitutional provision specifying authors and inventors and limited times. The corrupting notion that these monopolies constitute “property” is of relatively recent invention and is pushed chiefly by rent seekers rather than actual innovators.)
Price controls are obnoxious only when inserted into a free market. Thus we do not object that utility rates are subject to price controls, as utilities operate as monopolies. In the case of a life-saving drug with no competing drugs of comparable effectiveness, a patent creates the same circumstance and price controls may actually be warranted.
Yes, I recognize the cost of R&D needs to be supported, and that is why patents are warranted: the Founders thought the same. In cases where it price controls are imposed on newly developed drugs and comparable devices, the developer might be compensated with a longer patent term, or given the choice of accepting price controls and a longer patent term or allowing competitors to produce the drug or device under license and thus introducing price competition directly.
Try as hard as I can, I cannot like the drug companies. Using the Capitalist, Free Market model, it is in their Best Interest to never find a cure. Look for a cure - Yes! - that attracts Grant Money, but actually find a cure - Never! - that would cut off their sales of medications that alleviate symptoms. (Example: really cure the Common Cold and there goes the sale of all those fraudulent ‘cold cure’ medications). Drug sales and marketing reps live very high off the hog, they don’t want to give that up. See the 2002 movie “Phase IV” with Dean Cain.
If 300 million people’s worth of drugs are being funneled through Canada, the drug companies are likely to cut off sales to Canada completely
The way it works is each manufacturer allocates X amount of their XYZ product to countries with price controls. I think thats all countries except the US. When pharmacists sell those products back to the US, they charge prices lower than the US price, typically $1/pill, but substantially higher than they can get locally. Im guessing that since theres a higher priced market this means an automatic shortage in the host country. Once the allotment of drugs is consumed, the host country is out of stock and has to wait for the next shipment, which may already sold back to US shoppers. This may be why patients in Canada are medevacd to the US because of drug unavailability.
What annoys me is that in all the articles discussing the high cost of medicine and medical treatment they almost never mention the cause; regulation. Well, you might say, regulation saves lives. Ive read that most drug companies test their drugs on prisoners in China to find side-effects and the lethal dose. So, yes, regulation does save lives. But in the same way the US Navy dive tables, developed by the Nazis using Jewish prisoners to determine how long divers must decompress, saves lives.
We need to completely re-think everything that has to do with medicine and health. We should start by eliminating the FDA and starting over from scratch.
As someone who has worked in Big Pharma for 21 years, I can only say that you’re wrong about searching for “cures.” Contrary to popular belief, there isn’t always a single “cure” for most diseases and conditions. The real work for what you’re talking about is in the field of immunology rather than pharmacology. Vaccines, like preventative medicine, are the best hopes for avoiding disease.
I've read that Hitler landed on the moon after lifting off from Argentina in 1955.
As someone who works for Big Pharma, all I can say is, don't always believe what you read. We don't do a decade of clinicals here in the US and Europe for show.
That really sounds like the lightning speed of finding a real cure for Aids. Smallpox was attacked in a variety of ways over time and is now largely gone but that was impoverished Third World stuff. The bottomless (sorry!) mine of money from developed countries to keep Aids at bay is just too good to make go away too quickly.
My company is a leader in AIDS research and produces one of the most successful treatments to combat it. Frankly, there isn’t nearly as much profit as you think. We donate a huge quantity of products to third world countries, especially in Africa. In the US, federal programs pay for the bulk of AIDS drugs; the privately insured are by no means a huge number of AIDS cases.
Re-importation of drugs from Canada will destroy Canada’s preferential pricing overnight.
Let it happen.
Then Canada will have to support Research and Development with the cost of the drugs they use too.
I would like to say that my heart bleeds for your generous company, but then my cynical sidekicks in. Sorry no sale here.
It’s a lie. Canada bargains for the price, and the drug companies accept it. The same drugs by the same manufacturers are also priced far less by those manufacturers in other countries. They’re only propagandizing and trying to make Americans pay for all others. Anti-American, globalist, socialist crooks.