Reimporting drugs from Canada wouldn't help

Importing Less Expensive Drugs Not Seen as Cure for U.S. Woes
By EDUARDO PORTER

Because most other industrial countries maintain some kind of price controls on prescription drugs, the United States has a...drug price gap with the rest of the world. The Congressional Budget Office estimated that average prices for patented drugs in 25 other top industrialized nations were 35 percent to 55 percent lower than in the United States.

But the United States market is hard to compare with any other. It represented more than half of the global drug industry's sales of $410 billion last year and was the country in which drug companies make the bulk of their profits. Whatever one thinks of the pricing disparity, efforts to force down American prices to Canadian or European levels could radically change the economics of the pharmaceutical industry - which effectively depends on United States profits for all of its activities, including a substantial portion of its spending on research and development.

American consumers are "subsidizing everyone's R&D," said Mr. Love, the consumer advocate. "We're paying way more than everyone else. Others should pay more."

In testimony before Congress last May, John Vernon, an economist at the University of Connecticut, estimated that dropping drug prices in the United States to the levels in the rest of the world would cut drug companies' investment in research and development by 25 to 30 percent.

Critics of pharmaceutical companies dispute many of their cost estimates, noting that much research spending is squandered on the development of "me too" drugs that are not truly innovative. They argue that drug companies are spending large sums in marketing to persuade patients to demand expensive new medications even when older, cheaper drugs have the same effect.

That is why the critics say the entire drug industry needs to be shaken up. Maybe the United States should pressure other rich countries to raise the prices of their drugs, so they shoulder a higher share of the global research burden. Or maybe, the critics say, the United States needs to join the rest of the world in setting price controls.

The debate over reimporting drugs from Canada does not address any of those issues.

Meanwhile, in
A.M.A. Says Government Should Negotiate on Drugs By ROBERT PEAR,

The American Medical Association says the government should negotiate directly with drug manufacturers to secure lower prices on prescription medicines for the nation's elderly...

The association, often viewed as a conservative voice for organized medicine, is influential on Capitol Hill. It strongly supports Republican efforts to limit damages that can be awarded in medical malpractice lawsuits.

I guess the physicians don't care about research.