gloopie-
i followed the dialogue you had with santiago
and agree with him - you are an honest man
looking for answers and altho i don't agree
with your conclusions, i admire that you were
brave enough to spell them out on this forum.
the best anyone can do, is vote as their conscience
dictates.
thought you might have interest in these two articles
from today's globe and mail - a canadian perspective
on the drug issue.
-alien
What ails John Kerry's drug plan?
By BRIAN FERGUSON
In Florida, Democratic presidential candidate Senator John Kerry recently denounced the Bush administration for not permitting the reimportation of pharmaceuticals from Canada, so that seniors, many of them Florida swing voters, could get cheaper drugs.
Does this mean Mr. Kerry, formerly a protectionist, has become a free trader? Will he allow Americans to import other goods at world prices when those prices are below U.S. prices? Softwood lumber, say?
Dream on. Despite the fact free trade in Canadian lumber would reduce the cost of rebuilding homes owned by hurricane-devastated Florida voters, Mr. Kerry is too dependent on the Democratic Party's protectionist wing, and too hungry for votes in swing states that blame their economic decline on unfair foreign competition.
Hypocrisy aside, does the Senator believe Canada's tiny pharmaceutical-production industry could supply the U.S. market? The bulk of our prescription drugs come from the same U.S.-owned Puerto Rican factories that supply most of the U.S. market. Why does he think it's called "reimportation"?
And does he really believe drugs would remain cheap if large-scale reimportation were permitted? That's true now only because the trade has been tiny relative to the U.S. market. Large scale reimportation would require a different distribution system, causing cross-border price differentials essentially to disappear.
Why? To start, Canadian-based firms could charge prices above current Canadian levels but below current U.S. levels (U.S. customers would still win). Of course, the U.S. pharmaceutical firms would fight back by raising the price they charged Canadian re-export firms. And since we're talking about U.S.-destined drugs, there's no reason for Canadian price regulators to interfere; Canadian retail price controls only apply in Canada.
There's another reason that hasn't got the attention it deserves: The United States is a litigious society. For example, lawsuits against makers of childhood vaccines drove most suppliers out of the market, with the result that the U.S. vaccine supply is precarious. According to one published study, between 1982 and 1986 the price of DPT vaccine rose from 11 cents a dose to $11 a dose; more than 70 per cent of the increase was for an insurance reserve. A 1997 study published in the Journal of Law and Economics found that half the price difference between Canadian and U.S. drugs can be explained by the need to set aside reserves against litigation awards.
Mr. Kerry's running mate, Senator John Edwards, made his fortune suing doctors. He convinced juries many children with cerebral palsy would have been born healthy if only they had been delivered by C-section, despite the absence of any medical evidence supporting his argument. When it comes to health-care costs, Mr. Edwards is part of the problem.
Where millions of dollars are involved, lawyers will find a way. Large scale reimportation from Canada would require some business presence in the United States, and that would be vulnerable to U.S. juries. Or the courts could simply make the U.S. parent companies pay on the grounds something bad had probably happened when these drugs crossed into Canada. We are, after all, the country they blame for introducing mad-cow disease into their food supply; most of the drugs would have crossed the Canadian border twice en route to U.S. consumers.
If Mr. Kerry truly believes the Canadian approach to drug pricing is the best way to lower U.S. prices, he should announce that a Kerry administration would impose serious tort-law reform. If, like so many people, he really believes price controls keep drug prices down, he should announce his administration would impose made-in-USA ceilings on prescription-drug prices. But then he'd have to take full responsibility for the declines in investment, innovation and employment in the biopharmaceutical sector that are the documented outcome of such policies. Politically, how much better to support the apparently innocuous practice of trying to import price controls via the back door from Canada -- surely a vacuous "solution."
Mr. Kerry may or may not be fit to command, but he's certainly doesn't seem fit to run a corner drug store.
Brian Ferguson, a University of Guelph health-care economist, is preparing a paper on the economics of drug policy for the Atlantic Institute for Market Studies.
theglobeandmail.com
and this one:
Booming Internet drug sales to Americans are a prescription for disaster in Canada
By ANDRÉ PICARD
Thursday, October 14, 2004 - Page A19
Selling prescription drugs to beleaguered Americans is good business in Canada: There are now more than 100 Internet-based pharmacies here with annual sales exceeding $1-billion (U.S.).
Heck, with prices for some Canadian drugs a fraction of what they are in the United States, it seems downright neighbourly to lend a helping hand, particularly to cash-strapped seniors south of the border. More than two million Americans now buy their prescription drugs in Canada.
But despite the superficial appeal, the practice should stop, and quickly. If Internet-based sales to the United States continue unabated, Canadian consumers and taxpayers are going to pay dearly.
There is nothing wrong, per se, with filling legitimate prescriptions on-line. It is legal in Canada to export drugs to the United States, but illegal there to import them, though there is a move afoot to change the U.S. law.
What is occurring today is akin to cigarette smuggling: Products that can legitimately be sold in one country are being shipped to another in a manner that sidesteps local laws. That it is being done openly, and on a grand scale, makes it no more legitimate.
In the case of cigarettes, Canadian jurisdictions tax much more heavily than their U.S. counterparts. With prescription drugs, the price differences are just as pronounced.
Plenty of rhetoric is flying in the U.S. presidential campaign about the importation of Canadian drugs. What is rarely discussed is why Canadian drugs are cheaper in the first place.
Prices are lower because of Canadian laws and practices. Canada has imposed price controls; prescription drugs, before they can be sold in this country, must pass muster at the Patent Medicine Prices Review Board. It reviews pricing in a number of Western countries, and sets our prices below the median.
Because provinces buy their drugs in bulk (based on centralized formularies of drugs that are reimbursed under provincial drug plans), they can also negotiate lower prices for consumers.
This approach -- which most mainstream American politicians would dismiss as socialism -- serves consumers fairly well.
The United States, on the other hand, has a market-based system. Thousands of enterprises, from single hospitals to huge state Medicare plans, negotiate prices with individual manufacturers.
The United States is one of only two countries in the world where prescription drugs are freely advertised to consumers, at a cost of billions of dollars annually. In the United States, consumers can usually get new prescription drugs faster, and with fewer impediments than in Canada. But two Americans buying the same drug at the same pharmacy could pay different prices for the same medication, depending on their health plans.
The large pharmaceutical companies are not fools. If the dizzying level of cut-rate Internet sales continues, they are going to cut off supplies to Canada, and move to raise prices in this country. They will, in the jargon of the industry, "protect the integrity of supply," meaning they will not increase supplies in Canada to undercut their sales in the United States.
We are already seeing sporadic but increasingly frequent shortages of prescription drugs as pharmaceutical companies crack down on Web-based sellers. It is absurd to consider that a senior citizen in Halifax might not have access to a prescription drug because that same drug is being sold, in bulk, to a drug plan for employees of the City of Boston.
It is also frightening to consider the impact on Canada's publicly funded health system if prescription prices were to jump to U.S. levels. Last year, according to the Canadian Institute for Health Information, Canadians spent $16-billion on prescription drugs -- one in every six dollars we spend on health care. If drug prices were to rise 10, 20 or 50 per cent, where would the money come from? And who would benefit?
Selling prescription drugs to Americans at Canadian prices provides absolutely no benefit to Canadians. It is, at best, a Band-Aid solution for a tiny fraction of American consumers.
If Americans want Canadian-style prices, they should create a Canadian-style system, with state control of drug prices, centralized buying, strict formularies and severe restrictions on advertising.
If they don't want to do so, they should pay the market price, not raid their neighbour's medicine cabinet.
theglobeandmail.com |
