interesting
Source
Pacific Research Institute "Kerry's Drug Policy Is Enough To Make Americans Quite Ill
by Sally C. Pipes
Sen. John Kerry punctuated his emergence as Democratic front-runner with a bold new drug plan that would supposedly lower prescription prices.
"I will repeal the ban on reimporting drugs from Canada," said Kerry to a packed audience in New Hampshire last week.
What Kerry left unsaid is that he wants America to import Canada's socialist price controls. Indeed, if Kerry's plan were enacted, it would almost surely backfire. Critical life-enhancing drugs would become less available -- and more expensive -- for Canadians and Americans alike.
In Canada, the government strictly controls drug pricing -- creating artificial, below-market prices that don't reflect actual costs. The Patented Medicines Prices Review Board also determines which drugs get on the Canadian formulary. U.S. companies -- which develop the vast majority of cutting-edge drugs -- are unable to sell to Canada at market prices. So they are faced with a choice. They can either sell to Canadians at a discount, or not sell at all.
Because Canada is one-tenth the size of the U.S. market, selling to Canadians at a discount is more a nuisance than a deal-breaker. However, what can't happen is for everyone to get a discount. If U.S. pharmaceutical corporations see their drugs returning en masse to the U.S. at Canada's below-market prices, they will respond by refusing to sell drugs to Canada altogether.
This is already beginning to happen. As more Americans use the Internet to illegally buy drugs from Canada, companies such as Pfizer, Lilly and GlaxoSmithKline are now limiting their Canadian shipments.
Sadly, this means fewer advanced drugs for Canadians.
Run For The Border
Today, many Canadians travel south for life-enhancing drugs that are simply unavailable in Canada. Some are available in one province but not another. Examples include Embrel and Remicade for arthritis, Reyataz for AIDS, and Glucophage 2 for diabetes. From 1999 to 2001, of the 100 drugs that came on the market in the U.S., only 43 made it on the Canadian formulary.
That's why David MacKay, head of the Canadian International Pharmacy Association -- which represents Canada's 25 largest Internet pharmacists -- isn't so keen on the idea of opening Canada's price-control utopia to a flood of American consumers. He says the firms he represents don't want to build their business on the "backs of Canadians."
If Kerry's plan were actually implemented, and America tried to piggyback on Canada's price controls, it would create an unprecedented health care disaster not just in Canada, but in the U.S. as well.
American companies spend an average of $800 million to develop a new drug. They must be able to recoup this investment, which is why the price of a drug is so much higher than the simple cost of manufacturing a pill. Apparently, Kerry has overlooked the unseen cost of research and development.
Politicians love to give away "free" stuff. But beyond the tax-subsidized fantasy world of Washington, D.C. -- where real companies go belly up everyday -- it's not possible to fill America's medicine cabinets at below-market prices.
Tangled Up In Rules
Think of the airlines and discount seats. If everyone were to fly in the heavily discounted seats, pretty soon there would be no seats available because the airline could not afford to fly. All passengers would lose. The same is true in the drug industry. "Cheap drugs" are good politics, but lousy economics.
Another key problem with importing Canada's system is that price controls create bureaucracy. The last thing America needs is to get bogged down in Canada's fever swamp of rules and regulations.
Many life-saving drugs aren't available at all in Canada simply because of an overabundance of red tape. For example, approval of AIDS drugs take twice as long in Canada as in the U.S.
Kerry should also note that drugs in Canada aren't always even less expensive. He claims that prescription prices in Canada "can be 30 to 80% lower for the same drug." But this is misleading, as he's talking about only nongeneric drugs.
Recent FDA research finds that Americans buying drugs from Canada may pay a lot more for their pharmaceuticals than they would if they had simply bought the generic version in the U.S. In fact, a 2001 Canadian study concluded that 75% of the 27 most popular generic drugs were actually significantly cheaper in the U.S. One good example is the cost of generic Prozac -- $13.19 for 100 20-milligram pills in the U.S. The next lowest price in any other nation is an exorbitant $49.78.
That's the reality of socialist medicine. Before Kerry turns his initiative into a platform, he should call someone in Canada who's suffering from AIDS, Hepatitis C or arthritis. Take it from me -- a Canadian -- America doesn't want Canada's price controls . . . at any cost. "
