I take it then that you actually believe the guys who send you emails about non-prescription Viagra... ;-)

heh, one of the few posts here that say, "If the US wants to fight counterfeit drugs, it should follow the European mode..."

Big Pharma corporations get most of their revenue from taxpayers - Medicare and the NHS make the C.A.P. look like a penny-pinching affair in comparison.

They don't compete in free markets, they wallow in regulated, subsidised and protected markets. Overseen by politicians whose campaigns are funded by lobbyists with links back to Big Pharma.

They are almost state industries in all but name, para-statals.

It verges on political corruption.

verges on?

When the consumer has no choice but to pay high prices to a favoured few suppliers whose products are endorsed by political friends in return for massive contributions, it more than verges on political corruption.

When the consumer has no choice but to pay high prices to a favoured few suppliers whose products are endorsed by political friends in return for massive contributions, it more than verges on political corruption.

Cool down the bullshit rhetoric.

"...pay high prices to a favoured few suppliers..."

Absolutely false. You pay high prices to a company that has bothered to invest bilions of $ to invent, test and produce a drug that saves your life (or improves it). You are not paying because it is favored by political friends. Politicians don't develop medicines, if they did we would be all dead by now.

The pharmas demand of the politicians to protect what is their legitimate right: the right to intellectual property and patents. Demanding the protection of your legitimate rights is not corruption.

As to reimporting drugs from Canada: the pharmas sell Canada's national health service drugs at a deep discount. Permitting reimportation will cause them to stop that, so the result will not be cheaper drugs in the US but more expensive drugs in Canada. That is what usually happens do dumb schemes - you get the opposite effect of what you intend.

The pharmas demand of the politicians to protect what is their legitimate right: the right to intellectual property and patents. Demanding the protection of your legitimate rights is not corruption.

That "legitimate right" is highly debatable. They also demand such things as the oppresive regulation of vitamins as was posted about recently. I wonder if you have a connection to the pharma industry Jacob?

"You pay high prices to a company that has bothered to invest bilions of $ to invent, test and produce a drug that saves your life (or improves it)"

Actually, the average cost of a new drug is under $100 million.

Thanks for that Peter. Whenever I see these claims that it takes billions to produce a new drug I wonder how that is. I expect there are great costs involved in complying with regulations but billions for each of them? I doubt it.

Whilst on the subject of pharma lobbying and "legitimate rights" didn't they have a rather interesting clause in the Patriot Act protecting them from legal liability where there products produced undesirable effects?

I'm curious, Peter, as to whether that $100M includes amortizing the cost of research on drugs that don't pan out.

As for the Canadian price-fixing system, I've read (and posted a link the last time a prescription drug thread came up) that the Canadian government is trying to ban exports of drugs back to America because the artificially low prices in Canada is causing a run on the market.

Peter - that figure is not sane. It costs more than that just to get a drug through the FDA approval process. And for every successful drug that makes it to market, there is some number (I've heard many, but we'll pick 9 because the math is easy) that don't. And even if it costs a total of $100M per, that means, in reality, each SUCCESSFUL drug has been had as a result of a $1B outlay by the company.

As to OP: I had read that Canada's drug prices are not only held low by a government price-fixing scheme, but that there were actual government subsidies as well. If that is true, wouldn't that make reimportation the theft of Canadian taxpayer dollars by Americans?

Alex Singleton, paul d s, Nick Timms, Bernie,Peter Wilkins et al

I do not know what any of you do for a living but I am firmly convinced that I and the rest of society pay far to much for your services. I demand that we use the political system to set a "fair" price for whatever it is that you do. Since you believe the government is wise enough to set prices for drugs I am sure you believe the government can set prices for the results of your work as well.

Further, it is clear that you have a government granted monopoly to use whatever forms of property you own. That's not fair. For example, the any real estate you own would be useless without roads, utilities, police, fire and military protection so obviously you don't deserve any benefit you would accrue from such property.

Just think, with enough political will we could go back to the glory days of 70's when wage and price controls were all the rage, shortages were common and the economy experienced inflation and recession simultaneously!

"I wonder if you have a connection to the pharma industry Jacob?"

That's a dumb Marxist question, inferring that one's thought process is conditioned by one's social class, as Marx said among his so many absurdities. If you don't like my reasoning, refute it without speculating about my relatives of ancestors.

No I have no connection to no pharma (lamentably), and hope never to need them, but it's nice to know that in the unthinkable case that one falls sick, there may be a medicine for him.

Come on guys, you are supposed to know that products don't grow on trees, they need to be produced, brought into existence, before you debate the issue of their redistribution.

In an effort to protect its own capped, negotiated pharma pricing scheme, the Canadian government is in the process of banning cross-border sales to the US. The reason is obvious: if US cross-border purchases become significant, pharmaceutical companies will act to protect their profits (largely generated by US sales) by raising prices in Canada. The truth is that, to some significant extent, every pill sold for capped prices in Canada and Europe, as well as those sold at cost for humanitarian purposes elsewhere is funded by American consumers & taxpayers. This current system is far from free trade or pure capitalism.

I'm not sure what the solution is because the medical products market doesn't function well in a pure market system (unless you think it's OK for AstraZeneca to create a new 'purple pill - Nexium - containing the same ingredients and demonstrating the same benefits as its old purple pill - Prilosec - for the sole purpose of avoiding the drop in profits that occurs when patents expire - and all to treat a, relatively speaking, non-life threatening condition like heart burn) IOW, pharmaceutical companies pursue profitable medications as opposed to necessary ones. And yes, development (even for a me-too like Nexium) costs hundreds of millions of dollars.

"I wonder if you have a connection to the pharma industry Jacob?"

That's a dumb Marxist question, inferring that one's thought process is conditioned by one's social class, as Marx said among his so many absurdities. If you don't like my reasoning, refute it without speculating about my relatives of ancestors.

It was meant as a straight question and not to imply that your reason was dodgy as a result of being in their pay. You seemed to be leaping to their defense rather more readily and enthusiastically that I think is warranted. The pharma industry is one of the most powerful lobbies and they get their way with governments quite a lot. Which means that the public gets fucked over quite a lot too. Look up pharma provisions in the Homeland Security Bill and the recent heavy handed regulation of vitamins in the EU.

I think you guys are missing the basic explanation for lower Canadian prices: the threat of expropriation. Once a drug is developed, states can threaten 'mandatory licensing' at low prices, i.e. stealing the IP of the companies. Alternatively, governments can simply institute price controls. The U.S. government resists doing that, since IP rights are very important (America's biggest exports are ideas, from IT to pharma to Hollywood) to the US economy, and the country is generally less socialist than the world average.

Essentially 90% of the world free rides off America for drug development (Canadian pharma companies has invents perhaps one drug a decade, mostly they just produce generic knock-offs.) Legalization reimportation means America adopting price controls (as foreign countries expropriate patents and then sell the drugs into the American market) and there will no longer be any reason to develop new drugs.

Shannon,

I'm not arguing for price controls, I'm arguing that if I buy a product in country A, it becomes my property, I should be free to trade it, selling it in country B.

The dumbest thing in these arguments is the myth that the U.S. is being ripped off by free riding foreigners - its the American public that is being gouged by Big Pharma aided and abbetted by their political accomplices.

Second myth is that U.S. R&D drives drug development. Novartis, AstraZeneca, Roche, GlaxoSmithKline etc are European companies, they do R&D in Europe they sell products in Europe. They incidentally often sell them for higher prices in the U.S. because they can get away with it.

Finally, I ask this question again and again of those anti-free trade in Pharma - name one EU country with legally enforced price controls on drugs?

A real Chicago boy would (a) find out the facts (b) support free trade and competition, not the interests of tax-funded corporations and the bought political allies.

"The pharma industry is one of the most powerful lobbies and they get their way with governments quite a lot. Which means that the public gets fucked over quite a lot too."

This too is Marxist crap.

Lamentably all industries have lobbies, mostly to keep Gov. from hitting them too hard with dumb regulations. I don't think the pharmas have more lobbies than the auto industry or the airlines industry or the entertainment industry. Your claim is simply not based on more than prejudice. For lefties, all "big" industries are bad, all lobbies are bad (exept the green lobby) ...

"public gets fucked over quite a lot too.."
How ? By getting new medicines invented ? Idle, prejudiced talk.

Shannon Love, I am staggered that you read my comment and came to the conclusion that I'm in favour of governments setting prices. Paul d s has said what I would have said in reply to this.

Jacob the problem is not the lobbyists it is the size and power of government. Politicians should not be involved in drug regulation. Government regulations and a ridiculous system for drug certification are the biggest costs in drug development and also the reason why many less prevalent deseases have very little R&D devoted to them.

IP rights should be enforced through the law but protectionism harms the public.

This too is Marxist crap.

Jacob I've been accused of a lot of things but being a Marxist is one of the funniest. A cursory look at a few of my comments on other parts of this blog would set you right. I'm a great fan of Rothbard, Mises and Hayek. Just because I'm not a fan of corporatist statism does not make me a Marxist.

"public gets fucked over quite a lot too.." How ? By getting new medicines invented ? Idle, prejudiced talk.

That is a foolish response to omit the reason I gave for how the public gets fucked over and set up a poor straw man argument. As can be seen in my comment above I referred to the recent EU regulations concerning vitamins. The pharma companies were the biggest lobbyists for pushing this through. That is what I call fucking over the public for personal gain using the force of government. That is not free trade.

Nick: Jacob the problem is not the lobbyists it is the size and power of government. Politicians should not be involved in drug regulation. I agree.

Government regulations and a ridiculous system for drug certification are the biggest costs in drug development and also the reason why many less prevalent deseases have very little R&D devoted to them. Why?

Politicians should not be involved in drug regulation.

Lamentably the business of defining and protecting, through legislation, intellectual property rights and patents cannot be done without the involvement of politicians.

The other problem is drug certification: namely - that drugs are in fact effective as claimed (and not snake oil) and that they have no harmful side effects, i.e. - are safe. Whether drug certification should be done by government or by some other private agency - is a big debate, as is the question if it would be desirable to have no drug certification at all. For the time being it seems to me we are stuck with government involvement (i.e. politicians) in certification, and I don't see this changing any time soon, neither would such a change be high on my priorities list.

I can only think that this some kind of British, reverse troll windup, to expose the Socialists in our midst.

What I'm getting at:
I live in state A and manufacture a widget that I sell in state B and state C. State B is affluent and state C is poor. I have the manufacturing capacity to supply everyone in each state. I negotiate a lower price for state C because they simply don't have the money to buy my product if I charge the same as I do to State B. Down the line I notice that though the overall sales of my widgets remains the same, my net income has decreased because I'm now selling more widgets to state C than less widgets to state B. This is fine. I do some marketing research and find that the reason for this is because some unscrupulous people in state C are reselling my widgets to state B at 90% of the rate that I charge state B. If state C wants to keep getting their negotiated price breaks, they have to stop reselling my product or suffer an increase in price for themselves. No more breaks. Too bad, so sad. Sayonara

Since I've disagreed with Mr. Singeton where he's been daft on economics, I suppose I'll chime in to say that, of course, the caims about dodgy and unsafe drugs from reimportation are complete horseshit. It does them no credit to make such ridiculous arguments (and in their case, they probably know that they are ridiculous, whereas Mr. Singleton has merely previously shown himself ignorant of economics.)

Reimportation from wealthy countries does not overly scare me, if it becomes actually possible to bust apart the monopsony "lower your prices or we'll break your patent" price caps that wealthy countries put on. I think that it is better for poor countries to have a lower price, though. (I suppose that one standard price plus aid could work, although probably not the most efficient manner.)

"[A]ll to treat a, relatively speaking, non-life threatening condition like heart burn) IOW, pharmaceutical companies pursue profitable medications as opposed to necessary ones."

Yes. Part of the problem, of course, is that non-life threatening "lifestyle" drugs are much more likely to be paid for out of pocket, which means a lot more profit than the important, necessary drugs-- which are much more likely to have highly regulated price caps and all sorts of non-principal agents pushing the price down and reducing profit.

Develop something life-saving, and it's a lot more likely that your patent will be taken away or that a government will "negotiate" a lower price. Fewer such worries with Viagra.

Now, now. No need to play a couple round of mudball fight.

It's all Canadian's fault. Without Canada's fixed pricing, there would probably no importation to talk about - at least importation from Canada.

So, blame Canada... eh?