Prescription Pricing

In one more sign that health reform legislation is not a government takeover of healthcare, the legislation which has passed the House and Senate, or which is proposed by President Obama, does not allow re-importation of drugs from other countries which negotiate drug prices with pharmaceutical manufacturers.  Neither does it allow price negotiation with pharmaceutical manufacturers. A senior White House adviser, David Axelrod, was quoted as saying the White House would push for legislation to allow re-importation of pharmaceuticals in separate legislation, after the health reform bill is passed.
Thousands of Americans break the law by importing prescription medicines from Canada or Mexico at prices that can be 70 percent below the prices in America's pharmacies.  Kansas, Minnesota, Illinois, Wisconsin, Missouri and other states have even supported this illegal activity, by developing web site applications to make the process more convenient.  During the 2004 presidential election contest, allowing the importation of drugs was actually a campaign issue.  As Americans, we are arguing about the wrong issue.  The problem isn't laws which prohibit the re-importation of drugs.  The problem is too many Americans cannot afford the cost of the medicines they need.  If we are willing to consider importing the price controls that make Canadian drugs so much less expensive than the same drugs in America, we ought to consider developing our own price controls so all Americans, not just those most desperate, can benefit.   

The pharmaceutical manufacturers insist that their enormous profit margins are critical to the development of new drugs.  There is no doubt that the research and clinical testing required to bring new drugs to market is expensive, costing tens of billions of dollars.  But there is no reason why Americans should be the only people to shoulder this cost.  Drug prices are higher in America, because governments in Canada, Great Britain, France, Germany, Japan and the rest of the industrialized world control the prices of drugs sold in their countries.  So pharmaceutical manufacturers--both American and foreign--turn to the vulnerable American consumer to generate the profits required for drug research.  The American consumer has the wealth to pay more, and lacks the price protection provided by government that the rest of the world enjoys.  The American consumer is easy prey.  If America decided to control the price of drugs sold in this country, does anyone believe that drug companies would give up the search for the new products required to sustain their existence?  More likely, the worldwide pharmaceutical industry would be forced to do the hard work of negotiating better prices for its products with other industrialized nations, if it lost the American consumer as its profit patsy.  This would spread the cost of drug development to all people around the world who benefit from the effort, rather than expecting the American consumer to bear most of the cost of research and testing.