Wednesday, October 20, 2004

Drug importation is a very bad idea

Your voice: Alex. H. Keller

While all consumers would like to see lower prices on prescription drugs, the idea of importing them from Canada is a terrible idea. Why? Several reasons:

1. Let's remember why these drugs are cheaper in Canada. Canada has imposed price controls on prescription drugs. The Canadian government has the luxury of catering to its consumers (i.e., voters) without any concern for what it might do to an industry, since there is virtually no Canadian pharmaceutical industry. Importing drugs from Canada places the Canadian government, and its price controls, in control of U.S. drug pricing - a cowardly way for the U.S. government to handle it.

2. Our own experience with price controls in the 1970s led to the worst inflation in modern history when the controls were lifted in order to get our companies back to investing for growth - economic growth and jobs growth - but Canada can avoid that, since it has no pharmaceutical companies to speak of and, apparently, couldn't care less if it damages ours.

3. The Canadian situation is not unique. Many countries in Europe have imposed price controls on pharmaceuticals. This means that a manufacturer selling internationally is saddled with price caps in much of the world. The U.S. pricing truly is a result of these other countries holding our drug companies hostage. If these other countries actually paid a fair price for their drugs, the price in the United States would be notable lower.

4. These worldwide price controls have participated in no small way in the demise of the pharmaceutical industry in country after country, resulting in U.S. companies being the clearly dominant players in this field.

5. It takes upwards of $800 million to get a major drug to market - a drug which, by the way, can extend and/or save lives. Companies clearly must charge enough for their products to cover the huge up-front investment and produce an adequate profit.

If U.S. pharmaceutical companies cannot generate adequate revenue, we can forget about their continuing to develop life-changing and life-saving drugs. And if U.S. companies don't do so, no one else will, since no one else can.

Controlling U.S. drug pricing through the cowardly approach of importation from Canada will devastate our pharmaceutical industry - a very bad idea.

Instead, why doesn't the U.S. government, in concert with our pharmaceutical companies, make a case for market pricing - fair pricing - internationally?

Drug companies have been very forthcoming in offering certain needed drugs to specific countries - AIDS drugs in Africa, for example - and would clearly continue to do so. Let's try to level the playing field.


Alex. H. Keller of Anderson Township, a retired Procter & Gamble executive, is an arbitrator for the National Association of Securities Dealers and the Better Business Bureau, and is a volunteer high school teacher.

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