Equalize Drug Prices
Byline: The Register-Guard
Just before its August recess, the U.S. House of Representatives passed a bill legalizing the importation of pharmaceuticals from countries where drug prices are lower than in the United States. The White House opposes the legislation, and it's not likely to survive in the Senate. But the bill reveals an inequity in international drug pricing, one that deserves examination before the importation proposal vanishes into a senatorial cul-de-sac.
Widespread drug importation is occurring already - and much of it is the reimportation of drugs made by U.S. companies. American citizens go by the busload to Canada or Mexico, where they get their prescriptions filled for half what they'd pay at home. The mayor of Springfield, Mass., wrote in The Register-Guard's Aug. 17 Commentary section about his plan to save millions in health-care costs by purchasing city employees' and retirees' pharmaceuticals in Canada. The House's drug importation bill, approved by a vote of 243 to 186, would make it legal for individuals, pharmacies and wholesalers to buy cheaper drugs in 26 countries and bring them to the United States.
International boundaries do not have a magical effect on drug prices. Americans can find less expensive pharmaceuticals abroad mainly because the United States does less than most other countries to control drug prices. The control is exercised primarily by national health care systems that buy in bulk and negotiate - or dictate - prices. In some nations, drug companies can lose their patents if they refuse to sell their products at the prices the government demands.
As a result, drug companies' profits on foreign sales are relatively slim. The largely unregulated United States market has become the pharmaceutical industry's main profit center. The industry has been among the most consistently profitable sectors of the economy because of the prices Americans pay, even though drug companies' market is worldwide. American consumers also finance the drug companies' research and development programs - a heavy burden, considering the fact that it costs about $850 million to bring a new drug from the laboratory to the pharmacy. …