Prescription drug re-importation
This is a big issue for some people. The high cost of prescription drugs is a prime mover of the increase in direct-to-consumer health care costs. As such, consumers are looking for a way to reduce this cost. This affects seniors the greatest because you does accumulate prescriptions as you get older.
It has been widely noted that drugs in Canada sell for a lot less than they do in the US. What's more, the costs are low enough on most of them that import duties aren't invoked when these 'scrips are passed through customs (if they were even declared). This particular 'loophole' has been exploited on a wider and wider basis in recent years as the cost of the drugs goes higher and higher. Some Canadian pharmacies are making quite a good business out of re-importing drugs into the US.
I say "re-import" since most of these drugs are manufactured in the US and then exported to the world market. The drug companies cry unfair to the reimportation practice because it effectively imports other countries price controls into the much less controlled US market. In effect, consumers are 'laundering' their medications through foreign countries in order to get a better deal. This, by the way, is what 'Globalization' is all about.
Another reason the drug companies claim for the need to stop the reimportation practice is the idea of counterfeiting. Drug counterfeiting already is a big business, and it is a much greater problem outside of the United States. Viagra is probably the most famous of the drugs to be counterfeited; should you ever reply to those spams about male enhancement, what you get in the mail was likely made in China without the knowledge Pfizer. By ordering your meds from overseas, so the argument goes, you do not get the benefit of FDA controlled distribution channels. Introducing middlemen to the process in the form of re-importers introduces another spot where fake (i.e. unsafe) drugs can be substituted.
This is somewhat disingenuous, at least for "first world" countries with their own medical boards regulating prescription drugs. Repute is a key thing to look for in a reimporter, and Canada is pretty reputable. Yes, their border controls are more porous than ours, but we're pretty strict with that as it is so that's no reason to hold it against them.
It is the price control argument that really sticks to me. Drug costs are subject to a complex array of factors. The drugs cost a lot, yet are needed for some people to continue living. This puts unique pressures that something like the price of steel isn't subjected to. Besides the 'standard' economic influences of price of the dollar in the local market, distribution details, and local competition, drug prices are also influenced by any nationalized health care system, out right legislated price caps, and socialist-seeming sliding-scales. That's quite a lot to contend with when you try to compete in the market.
Globalization has permitted a business culture such that if it is too expensive to produce or obtain something in one country, it is often far easier to obtain/produce it in another country. The export of jobs from the US and importation of Cheap Plastic Crap is but one symptom of this. Consumers are now exercising themselves in this 'new' market in the form of importing their own medications, and the companies are not liking it.
Protectionism is not the way to grow global prosperity, even in drug markets. The drug companies in the US are having to essentially compete with themselves in other markets, something they haven't done before. They claim that this reimportation practice will bring higher prices to Canadians (or other reimporting countries) in order to recoup losses incurred to US-based business. This can only go so far, especially in countries where price-caps set an absolute maximum. This very global competition is what globalization is all about, and should result in lower prices in the US.
It has been widely noted that drugs in Canada sell for a lot less than they do in the US. What's more, the costs are low enough on most of them that import duties aren't invoked when these 'scrips are passed through customs (if they were even declared). This particular 'loophole' has been exploited on a wider and wider basis in recent years as the cost of the drugs goes higher and higher. Some Canadian pharmacies are making quite a good business out of re-importing drugs into the US.
I say "re-import" since most of these drugs are manufactured in the US and then exported to the world market. The drug companies cry unfair to the reimportation practice because it effectively imports other countries price controls into the much less controlled US market. In effect, consumers are 'laundering' their medications through foreign countries in order to get a better deal. This, by the way, is what 'Globalization' is all about.
Another reason the drug companies claim for the need to stop the reimportation practice is the idea of counterfeiting. Drug counterfeiting already is a big business, and it is a much greater problem outside of the United States. Viagra is probably the most famous of the drugs to be counterfeited; should you ever reply to those spams about male enhancement, what you get in the mail was likely made in China without the knowledge Pfizer. By ordering your meds from overseas, so the argument goes, you do not get the benefit of FDA controlled distribution channels. Introducing middlemen to the process in the form of re-importers introduces another spot where fake (i.e. unsafe) drugs can be substituted.
This is somewhat disingenuous, at least for "first world" countries with their own medical boards regulating prescription drugs. Repute is a key thing to look for in a reimporter, and Canada is pretty reputable. Yes, their border controls are more porous than ours, but we're pretty strict with that as it is so that's no reason to hold it against them.
It is the price control argument that really sticks to me. Drug costs are subject to a complex array of factors. The drugs cost a lot, yet are needed for some people to continue living. This puts unique pressures that something like the price of steel isn't subjected to. Besides the 'standard' economic influences of price of the dollar in the local market, distribution details, and local competition, drug prices are also influenced by any nationalized health care system, out right legislated price caps, and socialist-seeming sliding-scales. That's quite a lot to contend with when you try to compete in the market.
Globalization has permitted a business culture such that if it is too expensive to produce or obtain something in one country, it is often far easier to obtain/produce it in another country. The export of jobs from the US and importation of Cheap Plastic Crap is but one symptom of this. Consumers are now exercising themselves in this 'new' market in the form of importing their own medications, and the companies are not liking it.
Protectionism is not the way to grow global prosperity, even in drug markets. The drug companies in the US are having to essentially compete with themselves in other markets, something they haven't done before. They claim that this reimportation practice will bring higher prices to Canadians (or other reimporting countries) in order to recoup losses incurred to US-based business. This can only go so far, especially in countries where price-caps set an absolute maximum. This very global competition is what globalization is all about, and should result in lower prices in the US.
posted by Corwin at 1:00 PM
0 Comments:
Post a Comment
<< Home