Thursday, December 10, 2009

The stupidest good idea ever

Louisiana Senator David Vitter (R) is speaking on the floor of the Senate right now in favor of Byron Dorgan's amendment allowing the "reimportation" of drugs from, among others, Canada. "This amendment gives Americans immediate relief from high prescription drug prices," he promised.

The case for drug reimportation, as Vitter says, proceeds from the recognition that residents of other countries get much, much lower prices on drugs than Americans do. Many of these drugs were invented by American companies and produced in American factories. But Canada gets them at a discount. Why?

Well, Canada's government bargains its prices down. So does the French government, and the German government, and the British government. The results of this strategy are not in doubt: These countries pay far less than we do for the exact same drugs. Our solution? We will go to these countries and buy these drugs!


In closing, Vitter urged the Senate to "take this step and do what we all say should be a top priority and actually lower health-care costs. I urge all my colleagues to come together and do this in a bipartisan way." Boiled down to its essentials, Vitter just made a case for a bipartisan embrace of a single-payer system.


410E9th said...

Canada doesn't bargain its prices down - rather, the government enacts price caps (aka price controls) and tells big pharma what they are allowed to charge canadians for their drugs. big difference. bargaining is a good free market principle. price caps are not. caps make sense in certain markets where the entry costs for competition are very high (utilities, etc.), but not necessarily here.

the bottom line is that canada (and france, germany, etc.) effectively is screwing us. because big pharma can't charge market rates in canada, so they charge more in the US to make up the difference. but if the US enacts price caps, because we are such a big market, there could be a severe decline in pharma R&D. canadian drug companies are already causing a problem in that regard - so much so that canada had to force its drug companies to spend more on R&D.

maybe permitting importation of drugs from canada is not such a bad idea. it will force pharma to lower their costs in the US (and convince canada to permit high prices in canada), or to stop selling in canada altogether to prevent this) and that will screw canada at their own game. of course, canada could restrict exports and screw us back. a tricky game.

there is no easy solution to this problem. but the one thing i know for sure is that you should be mad at canada.

410E9th said...

C'mon Midtown,
If you are against government negotiated prices/ price caps/ price controls how can you support this bill? This makes no sense

I understand that one might be against this because he is worried about the evils of socialized medicine and the poor PHRMA compainies functioning. I also understand that one might be for this because he cares about pharma profits as much as they care about banker profits, and the advantages of a large organization getting lower drug prices makes sense.

If you are for this rube goldbergian scheme why not do a less convoluted thing and be for the ability of the government to negotiate/reduce the price down itself?
This, I dont understand.
The only reason I can see for someone to be for this bill but against the country doing it by itself is because they are more interested in punishing other countries who socialize their medicine then you are in lowering costs for your citizens. That or you are trying to destroy the whole healthcare bill
Vindictiveness is always a good reason to make decisions.

BTW Vitter is the guy who has a diaper sex fetish.

410E9th said...

it is not vindictiveness. canada is screwing us, and i am trying to defend ourselves. i don't care what they do with their health care system and i am not trying to affirmatively screw them. i just want all of us to be on the same playing field. and i don't want us to be forced into socialized medicine (or price caps) because canada thinks it is a good idea. that is a stupid reason to do something.
-Sincerely Midtown