Saturn V,
I would like to see a law disallowing differential pricing between USA and most of the developed world. Or else the system has to allow the Pharmacies to freely import drugs from other countries. The present gross differential transnational pricing is a travesty !
As with almost everyone else, you have the economics exactly backwards.
Prescription drugs are characterized by huge development risks and costs and minimal marginal production costs.
If a drug company sells a drug to the government of Liberia at production cost for free distribution among its population, everyone wins and no one loses, as long as the drugs stay in Liberia. Any single worldwide price would assure that the only Liberians to receive the drugs would be the leaders of government and other criminal enterprises.
The same thing applies to Canada. The only people to suffer from controlled prices would be Canadian citizens themselves, as the availability of particular drugs would be limited to those that the drug makers and government could agree on a price for. If the government wants a discount price, it is going to have to ensure that the drugs are not significantly re-exported to the US. If the government fails in this task, then the drug companies will not sell to Canada. Anything the drug companies sell to Canada, even at a discount, is still positive incremental revenue. US consumers are no worse off if Canadians pay low, controlled prices because the prices Americans pay are not affected by anything that happens in Canada, as long as the drugs stay there. It is a myth that US consumers can significantly benefit if the US drug companies just drop ship into Canada.
It is rare when price discrimination can be enforced between separate markets, but when it can it is an overall social benefit.
Regards, Don |
