The Pharmaceutical Market Access Act was introduced in Congress last month. It allows American consumers to import FDA-approved prescription drugs from FDA-approved facilities in 25 industrialized countries. The bill’s sponsors believe the bill will save huge amounts of money, because many drugs are a lot cheaper abroad.
(I cannnot get the link to work, but I got the above quote from this google page.)
Pitts’s column starts badly. His horror story concerns the importation of a drug banned by the FDA, but the bill only allows FDA-approved drugs to be imported.
I agree with Pitts that price controls are a terrible idea. However, is allowing price-controlled drugs to be imported equivalent to imposing US price controls? I suppose one could flesh out the argument this way:
Suppose all other countries impose such extreme price controls that drug companies can’t afford to develop new drugs. If the US allows these price-controlled drugs to be imported, then US drug companies will have to drop their prices in order to compete. Then they won’t be able to afford to develop new drugs either.
This argument might make economic sense, but the assumptions would have to be carefully verified.
Still, it’s hard to oppose a law that increases economic freedom and promises lower prices.
We should not need a special law. Free trade is supposed to mean that we can buy or sell into or from any market. There is no logical reason today why we cant buy Canadian drugs at the Canadian price.
The american drug companies are unfairly trying to get themselves excluded from the free trade policies that nearly every other industry enjoys.
These same drug companies do not think twice about employing foreign workers at a lower cost(the “world cost of labor”) yet they dont want their products to be sold at the “world price” of drugs, and they dont think twice about opening up factories in foreign lands to make drugs cheaper.
It would be inconsistant and hypcritical to not allow drugs to be brought in at whatever lower price we can get them for from some other country.
On the contrary, there’s no logical reason to allow it. You seem to be missing some crucial points:
These drugs aren’t from another market. They’re from ours. They were designed in our country, and in many cases manufactured in our country. For most commodities, the reason we import them is because other countries have a comparative advantage in making them; it’s more efficient for them to make what they’re good at, and for us to trade what we’re good at. But in this case, the lower price does not reflect a higher efficiency. It simply reflects a more meddlesome government.
This isn’t free trade. Other countries restrict (restrict as in make not free) the prices that drug companies can charge. Not all restrictions on trade are restrictions on free trade. For instance, it’s illegal to import pirated movies from other countries. Violation of free trade? Of course not.
From the article:
The article has it backwards. It’s not outrageous that we pay 30 to 300 more than other countries. It’s outrageous that people in other countries pay so much less.
But just because a drug is approved by the FDA, that doesn’t mean it was created in accordance with FDA regulations. All drugs made in the US are required to have extensive documentation of how they were created. In some countries, there’s nothing to stop someone from slapping a “Prozac” label on a container of sugar pills and selling it.
I can sort of see the logic for third world countries: they can’t afford full price. In some cases the drug companies voluntarily lower their prices to increase their customer base. But Canada is no charity case; it’s time for them to stop getting a free ride. They’re essentially stealing from the American economy. We should tell them to repeal their price controls (I would think they’re illegal under NAFTA), and if they refuse, either respond in kind (put price controls on Canadian products) or prohibit American drug companies from doing business with them.
Absolutely! Pharm is BIG BUSINESS and intentionally drains american consumers/insurance companies because there is no price regulation (unlike canada, and other contries).
The pharm industry claims that these exorbitant prices are there to fund research, yet they (across the board i should add) spend more on advertising than R&D. Thus american consumers are paying for the advertising budgets of the big pharm guys, while other contries reap the benefits.
Government’s can subsidise the cost of medication, rather than put a price control on it. For example, I am on medication which costs just over $US170 per 2 months. I pay $US 4.50 per 2 months, and the government picks up the tab with my taxes. This way, everybody get’s cheaper medication when they need it and pays for it incrementally over time through taxes, the pharmaceutical companies still get all the money they wanted to get for the product in the first place - meaning no lowering of R & D budgets.
(btw I’m in Australia, where we are subject to the “evils” of socialism such as cheap medicines )
Umm, no my point was that govt subsidized programs such as yours would be BANKRUPT under current pharm pricing in the US. It simply does not have enough money to subsidize that many people under such an overly priced market.
Well our government does not set pricing for medication at all, and some run into the the thousands of $$ per prescription. The medications have to approved for subsidies, though most medications are subsidised (for example in sleeping pills, temazepam is but stilnox isn’t, though they do pretty much the same thing so most doctors prescribe temazepam for patients they know cannot afford stilnox).
I don’t really believe the “government can’t afford that” stuff when the US has a higher GDP and higher average income per person than Australia - if anything, you guys have the ability to subsidise more things if you adopted the same tax rates as we have.
revolutionarily: I don’t really believe the “government can’t afford that” stuff when the US has a higher GDP and higher average income per person than Australia - if anything, you guys have the ability to subsidise more things if you adopted the same tax rates as we have.
You almost sound as if the money wasn’t already spoken for by other things. Which it is.
TheRyan: These drugs aren’t from another market. They’re from ours. They were designed in our country, and in many cases manufactured in our country.