Wednesday, July 23, 2003

A Bitter Pill for Americans to Swallow

The New York Times today favors importing drugs for the purpose of taking advantage of the lower prices foreign countries impose on them. Their editorial disputes commentators who worry that pharmaceutical innovation will decline dramatically as the result of lower revenues, because the drug companies will put pressure on foreign governments to remove their price controls.

The Times must have Fred Barnes in mind, because he makes the argument today that drug re-imports should not be allowed. Barnes reminds conservatives that they must perform their traditional role of resisting instant gratification (more medication for more people now) in favor of keeping the pharmaceutical industry innovative and vibrant. Barnes reminds us to consider how moribund European pharmaceuticals are now due to price controls (though it's not clear why they haven't taken advantage of the lack of price controls in the US as have US companies).

The Times argument that the pharmaceuticals will be able to pressure European governments into reducing price-controls seems far-fetched. European countries are not enamored enough of the profit motive to reduce their price controls. The immediate good is achieved by controls, while the more distant benefit, the achievement of which is dependent upon the profit motive, is compromised.

Barnes barely mentions the question of justice regarding the American consumer single-handedly supporting research, but one may infer that he believes foreign price controls won't change and that the current situation beats the alternative of little or no research. It looks as if it is left to the American consumer to subsidize his counterparts elsewhere in the world, thereby assuming the bulk of the burden for supporting phamraceutical research, just as it is up to the American military to defend freedom around the world.


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