KUDLOW ON DRUG IMPORTATION FROM CANADA

I think he has missed the main point -- that most "Canadian" drugs are actually manufacured on the same production lines that produce "American" drugs and that the higher prices in the USA are what underpin American drug research. But I may be missing something so I reproduce his post plus two of the comments on it:

"Drug reimportation is a terrible idea. 30 million Canadians cannot supply enough drugs for 300 million Americans. Leaving alone the safety issue (re-imported drugs are not produced under the auspices of the FDA), doing it wouldn't even save American consumers that much, after all the necessary bureaucracy is put in place. Two excellent articles on this theme, one from Rick Weiss in the Washington Post, and one from Laura Gilcrest at CBS Marktewatch, go into more depth. The more details emerge, the more it looks like generic drugs, US-made, are the way to go".

Comments:

AB said...

I don't think importing price controls from Canada is the answer to bringing down America's drug costs. Any initiative that squeezes drug companies profits could have the unintended consequence of hindering the incentives to develop new drugs. I would love it if this argument were refocused on two fronts:

1) making the FDA more efficient and thereby less costly for the pharmaceutical companies to get new drugs approved; and

2) putting more pressure on foreign governments that are controlling the prices of drugs in their respective countries to start paying their fair share of the R&D costs of existing drugs. As it stands now, Americans are paying a much higher percentage of the R&D costs for most drugs than the rest of the world, especially more than countries like Canada that do not allow drugs companies to operate in a free market.

These two initiatives would each allow drug companies to reduce the price of their drugs in the U.S. without negatively impacting drug companies' profit margins and without reducing the incentives for drug companies to develop new drugs.


Jake said...

In Canada, there is a $250,000 limit on pain and suffering awards. As a consequence, drugs are cheaper in Canada. In Mexico, it is unheard of to sue the drug companies. As a consequence, drugs are 50% cheaper in Mexico. If Bush's tort reform bill was passed, it would have a dramatic effect on drug prices.

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