Drug Lobby Wins Again in Washington...

So protest the price controls.

As for US import restrictions, those are based on our own quality control requirements.... Just as we have safety requirements on cars, food, and all other imports.

The drug companies have no real motivation or incentive to protest the price controls with the way the system is rigged now and the American consumer suffers as a result.

Who mentioned stealing, Ramen?

Oh right, nobody.

You just made it up.

I plan for the unexpected.

Even if I didn't, my needs are not a just claim on the life or property of other people.

I refuse to be a leech, a thief and a moocher.

Canada is ultimately the buyer, since they have socialized medicine.

NAFTA? Free trade?

There's no reason for them to do that. The people are going to love Congress for essentially importing the price controls, and anyone who wants reelection isn't going to argue for higher prices. "Higher prices for everyone" is not nearly as good a political plank as "make Canada pay their fair share."

Unilateral trade liberalization is a better for the US in terms of shrinking the government no matter what, which may ultimately be a very good thing. I acknowledge this, which is why any action we take at all is like tying our hands behind our back, in one way or another. Other countries, regrettably, are not nearly as scrupulous.

Unilateral tariff reduction is a good thing for the US economically IF the other party is using tariffs.

I have serious doubts about its efficacy in dealing with export subsidies - see China (standard disclaimers about how its partially our fault anyway, standard explanation about how it's more theirs, standard argument about whether all else equal we'd be better than them or not, standard explanation how it wouldn't matter either way).

Assuming for a moment that reimportation had never been banned, price caps by Canada would essentially amount to an export subsidy, except, oddly, one where the manufacturer and/or distributor is in the US to begin with, and thus gets none of the benefits of a subsidy. In the case of China, I've proposed a tariff exactly equal to the subsidy for any given good, which, unlike a traditional tariff, would take into account neither differing land (in the economic sense) costs, differing labor costs (including the fraction that is due to regulation here), nor whatever else it would take for an American company to produce, merely the subsidy amount (I'd also consider including the human rights abuses, but we have no way of knowing exactly what the natural price of labor in China is, so it's only the subsidy).

In this case, that doesn't work, because the companies are American to begin with. No one at all benefits from a reimportation tariff since Canada doesn't care, and the drug companies don't recoup their losses. Furthermore, it would be very difficult to design; if it was just an issue of the US and Canada, it would be easy: simply get the total monetary cost of the pills and divide by the total number to find a "real" market price, and tariff to there (yes, I know there is lag and inefficiency inherent in any government meddling, which is another insurmountable obstacle). But because so many countries are involved, each with differing exchange rates, and there are, in fact, believe that there are variations in market price between markets (Whole Foods has a fantastic way of dealing with this which I should tell you about sometime - a real triumph of technology in the practice of capitalism, but it won't work for tariffs) it quickly becomes impossible to determine exactly how much a tariff should be.

So tariffs are out. A ban is out; we shouldn't be subsidizing the world's drugs simply because we have a freer market. The government is going to be ineffectual because Congress wants to get reelected if the first action that is taken is to lift the ban, especially with the current version of the proposal. Which brings it back to the drug companies putting pressure on Canada. Normally, one would put pressure on another by means of a price increase. Since that's out, it means retargeting R&D toward drugs that Canada won't buy (specifically geriatric-targetted drugs in this case). They make their money, but Canada starts wondering why they're not getting any new goodies to buy, and the populace is angry because no one's putting research dollars into some new disease-of-the-week. That's what it's going to take to bring Canada to the bargaining table. And that is going to take several years.

The other choice is getting Congress to force Canada to end the price caps, but the US can go to the bargaining table ONLY happen while there is a ban in place, for the political reasons which have nothing at all to do with Canada. Unfortunately, they don't seem to be going in that direction, which means we might as well lift the ban no matter what form that takes, and wait the several years for the people of Canada to demand the government start bargaining with the drug companies again, or lift the price caps entirely. There's no reason to believe the US government will work against the Canadian price caps on the drug companies' behalf.

I.e. the U.S.

Companies lobby to get the government to screw the people. Once the government is screwing the companies, there's no reason for them to listen to the lobbyists. Whoever heard of a lobbyist for economic freedom, much less one actually succeeding?

That makes no sense. The US government has no interest in the status quo. If anything, they have incentive to upset the status quo, since just about anything they do means lower prices and happier voters. Interest in upset is balanced by the lobbyists from the drug industry who know they have no recourse with the Canadian government, which is why there is no action.

So what part of Senate kills bid to import prescription drugs is not about maintaining the status quo?

*Phases a bubblegum machine through Storm's head, lets it solidify*

Solve that one, Batman.

Reread the post and try again. Pay attention to the last sentence.

The American consumer doesn't suffer as a result the consumer foolish enough not to have insurance does. The prices our government gets from drug companies are actually very close to the same prices paid by the Canadian government (within 2.5% IIRC) and those with private insurance enjoy somewhat similar benefits. If some Americans don't feel like they need health insurance I have no problem with them having to pay full price, instead of enjoying the government or insurance discount, when they go to buy their meds.

Not all insurance covers prescriptions. And while your insurer might cover *some* prescriptions today, it most likely will cover older, "dirtier" generic meds long before it can be dragged kicking and screaming into covering newer meds. In which case your doctor may be compelled to try you on several drugs with nasty side effects or tell you you have to pay out of pocket.

Or your insurer may just decide not to cover any meds at all. Or it may decide to raise your premiums to cover someone else's meds, or demographic trends in your age cohort. Or it may fold and leave you stranded.

Check that parachute before you jump out of that particular plane.

Congress is awarding the pharma industry special privileges. If you don't understand that, you don't understand the argument.

Drug industry lobbyists are not the same as the US Government, they merely influence its policies. If you don't understand that, you don't understand the argument. If the government did have an interest in maintaining the status quo, why would the topic even have come up for a vote in the first place?

No wait, let me guess... there's enough good Senators among them to force a vote?

So it's the word Senate that you don't understand?

If the Senate is interested in maintaining the status quo, why did it come up for a vote in the first place?

Stick to airplanes, Lindie.

I won't go into the personal details, I'll just boil it down.
I despise those who prey on people who can't defend themselves.
The drug companies have become that to me.

And I'll leave it at that, because it's not a point up for debate with me.

What he seems to not understand is the concept of appeasing two different audiences -- have a vote on re-importation to toss the AARP a bone, but don't vote for any substantial change to keep the drug lobby pleased. It's the same reason he can't understand why the U.S. government might pressure Canada on pricing after lifting the importation ban -- again, two audiences.

Can't be done, of course. The entire purpose of patents is to inflate prices above market prices because market prices are insufficient to support R&D. What Paladin should be arguing for, if he really wants to see the fair and free market in action for drug pricing, is for getting rid of the patent system as we know it in favor of one-time lump sum rewards for R&D that develops medically useful drugs.

Yes, but who pays that reward? The price we have now is an amortization of the reward.

I'm not saying that's desirable, just that it would lead to market pricing for drugs, which we clearly don't have. If you went to such a system it would have to be the government paying. You would still, of course, have the same basic problem we have now: different countries have different patent and drug pricing laws, resulting in purchasers in one country subsidizing purchasers in another country. And I dispute that drug patents as we know them are an amortization of any sort of fair and appropriate reward; there's a reason that every time someone puts together a list of industries with the highest profit margins, pharmaceuticals heads the list.

Either way, the reimportation ban is ridiculous. It's the largest and most ill-considered foreign aid program in the world, causing the American drug consumer to subsidize the Canadian drug consumer for no apparent legitimate reason and in direct opposition of the interests of the American electorate. What we really need, more than anything else, is a treaty for internationally uniform drug patent and drug pricing laws. Any sensible system that offered a true amortization of a fair reward for R&D would work.

Sounds like profiteering to me.

That's the problem with using logic to deduce everything. Everything starts becoming black and white and that's not how the world works.

Because the mushy gray, emotionally-crippled human jellyfish of the world find logic inconvenient, and seek to discredit it at every opportunity.

The weakness of logic is that it can be used to support the most atrocious behaviors. Take a look at racism for example and see how logical many actually are about it.

Logic is a fine tool for reasoning a connection between A and B. But it fails miserably to describe the world if you start with a false premise.

There is nothing logical about racism. Don't confuse "logical" with "able to contrive a credible-sounding line of bullshit."

I think I'll just leave that in left field, since it seems to have nothing to do with this thread.