The Post editorial on a bill that would authorize drug reimportation suggests that they don't. The Post tells readers that if people in the United States started importing more low priced drugs from Canada, the drug companies would stop selling their drugs to Canada at low prices. Perhaps, but is that the end of the story? If Post editors followed the news they would know that the Thai government has recently issued compulsory licenses on a number of important drugs, essentially reducing their price to generic levels. Brazil is planing to follow suit with an important AIDS drug. So, if the drug companies tell Canadians that they must now pay twice as much for their drugs, Canadians could just shell out the additional money to Pfizer, Merck and the other big drug companies, or they could follow the lead of Thailand and Brazil and issue complusory licenses for important drugs. While the Post's editors may think that they know Canadians will just accept higher drug prices, they also thought that there were WMDs in Iraq. I will be a bit rude here. (The Post just printed a letter that implied that CEPR propagandizes on behalf of labor unions in exchange for their financial support. In fact, we do not currently get any funding from unions and union contributions never accounted for more than a tiny share of our budget.) The Post receives hundreds of thousands of dollars (perhaps millions) each year in advertising revenue from the pharmaceutical industry. Reimporting drugs from Canada is a very backward way to address the problem of high drug prices in the United States. But, it can help undermine an antiquated and inefficient system that badly needs to be reformed. Unfortunately, the industry is so powerful it has effectively kept serious proposals off the table (e.g. the Free Market Drug Act). To change the situation, we will need more facts on the ground (like drug reimportation) that press the case for real reform.
--Dean Baker
