Sunday, December 13, 2009

On the Re-importation of Drugs

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Call it "the law of unintended consequences"...

John Lott had a post on "The amendment that may kill the health care bill", that prompted me to jot down one of my long held convictions on the subject.

One aspect of Obamacare under debate, is whether or not to allow the re-importation of drugs from Canada, ostensibly to reduce costs, since those drugs are available in places like Canada for less than they can be purchased here.

It's my belief that if there were a large scale re-importation of drugs from Canada, the first thing that would happen is that costs would go up on Canadian drugs.

US firms can currently increase their market share by shipping drugs to Canada at reduced rates, where costs (read: litigation) are lower.

If those same drugs were to come back across the border, they would subject those companies to the same liabilities as other drugs in the US market. I believe that the first thing the pharmaceutical companies would do, is raise prices to a level more commensurate with US sales, partly to help them cover the increased cost of litigation.

Liberals should rejoice over this, since it is a form of "leveling the playing field". Both countries should suffer equally for the rampaging litigious society in the US.

The only thing large scale re-importation will do without some version of tort reform, is screw the Canadians, putting even more pressure on their underfunded and overburdened health care system.

Cross posted at Say Anything

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