“Suppose Canadian drug prices are two-thirds the level of U.S. prices. Drug companies would face two choices: They could ship the U.S. supply of their drugs to Canada, reducing their revenue by one-third. Or they could tell Canadian authorities they will no longer sell at discounted Canadian prices, reducing their revenues by less than a tenth—reflecting the smaller market size and lower Canadian prices.
Their choice is obvious, and Canada would have to lift its prices nearly to U.S. levels if it wanted to keep the supply of drugs it needs flowing. Administrators of the perpetually crisis-ridden Canadian health-care system would be very unhappy.”
http://www.aei.org/publications/pubID.15570,filter.all/pub_detail.asp
-
That’s what I want to do; make Canadians unhappy so that they drop their price controls.
Clearly, the drug companies want you to believe they would. Clearly, those whom the drug companies essentially control or fund will claim that.
Looking at the articles, books and speeches that John E. Calfee, the author of the article you quote, has produced in the last six years, he clearly speaks from a position favorable to the current interests of the major drug companies. Further he, and the AEI, are partly funded by the drug companies, as stated at http://www.aei.org/publications/filter.all,pubID.26765/pub_detail.asp:
The stakes are always high in such cases, says John E. Calfee, a scholar at the American Enterprise Institute, a Washington, D.C.-based think tank that gets part of its funding from the drug industry. Calfee, who also does some consulting work for pharma firmsHere's a list, from the AEI institute, of some of John E. Calfee's recent articles. Examine them yourself, to see if my claims of his bias are fair.
Articles and Short Publications by John E. Calfee | |
Resident Scholar | |
|
|
It means we must maintain a healthy skepticism on the key step in his claims, that the drug companies would stop shipping to Canada, if it mean displacing their current sales to the United States, at lower prices.
Essentially, Congress, with these re-importation laws, is trying to import Canadian price controls, without calling it that, because price controls have a bad name (justifiably so.) And essentially the drug companies are saying they wouldn't sell to us at the controlled price, in an effort to break the price controls. And you're hoping that the Canadian price controls, caught in the cross fire, would break down.
That is, you're hoping that we can in the longer run reduce price controls, by, in the short run, importing them from Canada, leading to the drug companies successfully attacking and destroying the Canadian price controls, and by proxy our imported price controls.
I cannot know what would happen in such a scenario; my crystal ball is out for repairs.
However this sounds to me like giving an alcoholic free booze, in hopes he will get such a hangover that he decides to sober up.
My guess is you're being too clever by half; my preference is more direct, and that is to resist further socialization, regulation and government control of our economy and industry, including pharmaceutical. I don't agree to importing Canadian drug price controls in the hope that this will backfire on the controls, eventually loosening them.
Actually, not only would I advise resisting further government encroachment in the medical industry, I would further advise reducing the present intervention substantially. I'm not holding my breath on this one, however.