Are Imports the Solution to High Drug Prices?

Washington,
D.C., April 25, 2008—With the
high cost of pharmaceutical drugs playing a central role in the national debate
over health care, many policymakers have endorsed the idea of buying U.S.-made
drugs from other countries, where prices controls make them far cheaper.
Competitive Enterprise Institute Senior Fellow Gregory Conko, however, explains
why such a policy of drug “reimportation” would ultimately slow innovation and
mean fewer life-saving drugs in the new study Drug Reimportation’s Dangerous
Allure: A Misguided Const-Control Measure Guaranteed to Harm Patient Care.

“All three Democratic and
Republican party presidential candidates seem to agree that the prices of
innovative new pharmaceuticals are unfairly high, and that costs could be
controlled if only Congress would legalize the large-scale reimportation of
drugs from countries like Canada, where price controls make drugs more
affordable,” writes Conko. “But, that
attitude is short-sighted, and implementing it as policy would have serious
negative consequences for American consumers.”

“Reimportation advocates believe
the process is simple and cost-free, but the solution to high drug prices is
not so simple,” said Conko. Legalizing
reimportation might lower prices in the short term for already developed drugs,
but it would reduce the capital available for research into new drugs, choking
off the development pipeline. “When we
reimport drugs from foreign countries, we are actually importing their price
controls,” writes Conko. “That, in turn, will produce the problems that price
controls always produce – the destruction of future productivity and
innovation.”

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