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Commentary

The White House Is Right To Threaten a Veto on Drug Importation
Andrew Grossman, Heritage Foundation, 9-21-05

“Another year,” Grossman says, “another bill, and another attempt to legalize prescription drug importation.” Drug importation is seen by many Congressional proponents as a way to finesse drug prices: just import cheaper drugs from abroad without getting into the messy, and probably unwinnable, fight to impose price controls in the U.S. Grossman reminds us, however, that importation is just as much of a mirage as price controls.

As Heritage analysts have long recognized, re-importation—by which U.S. drugs are exported to a foreign country like Canada, subjected to price controls, and then re-imported to the U.S.—is bad health care policy. To begin with, it wouldn’t work: drug companies would cut their sales to Canada, and Canadian pharmacies would stop selling to Americans—either because they don’t have the drugs in stock or because their government forces them to, which has already begun to happen for gray market re-importation.
Still, allowing importation would be a foot in the door for government manipulation of drug prices in the United States, which would have a devastating effect on the quality of health care that U.S. citizens receive. Most apparently, re-importation would stifle drugmakers’ spending on the research and development of new drugs, slowing or even ending recent years’ constant and unprecedented pharmacological innovation. As America is the only major country now that does not regulate drug prices, turning off the spigot of innovation here would impact drug development worldwide.


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