Pharmaceutical Re-Imports Threaten Medical Innovation

Contact for Interviews: Richard Morrison, 202.331.2273

Washington, D.C., July 18, 2003—The Competitive Enterprise Institute is opposing proposals to allow the re-importation of drugs from foreign countries.  Because of price controls and other medical regulations abroad, U.S. pharmaceutical companies are often forced to sell their products at below-market prices, usually to government-run healthcare bureaucracies.  Now some companies would like the opportunity to take advantage of those artificially low prices abroad by re-importing the same drugs back in the U.S. and pocketing the difference.  

U.S. pharmaceutical companies currently face a difficult international marketplace.  When selling at all in a nation with a socialized medical system, they essentially have only one client–the government.  Because those health services control demand for the entire nation, they can dictate prices to drug companies well below what the same firms charge American consumers.  It is therefore American consumers who end up making possible the development of new drugs for everyone by paying prices high enough to support the research budgets in the billions of dollars that are required to bring safe and effective new drugs to the market.

“The opposition to re-imported drugs is not a case of denying U.S. consumers access to lower-priced foreign goods.  These are drugs made by U.S. firms and extorted abroad under foreign price controls.  Re-importing those drugs means re-importing those price controls–a strategy that can only result in the destruction of the very industry that made those drugs in the first place,” said Fred. L. Smith, Jr., President of CEI. 

CEI was joined today in announcing their opposition to drug re-importation proposals in Congress by several national public policy groups, including the Frontiers of Freedom Foundation, the United Seniors Association, and the Coalition for Racial Equality.

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government.