Blame Canada?: State Prescription Drug Importation Programs, the Federal Response, and Why Lawmakers Are Up in Arms
CitationBlame Canada?: State Prescription Drug Importation Programs, the Federal Response, and Why Lawmakers Are Up in Arms (2006 Third Year Paper)
AbstractA growing war on drugs threatens to turn septuagenarians into scofflaws and state governors into full-fledged lawbreakers. As American citizensâ€”especially the powerful elderly constituencyâ€”grow increasingly vocal about the high prices of prescription drugs in the United States, many state and local leaders have taken decisive action to lower prices. State governors and city mayors across the nation have implemented programs that allow participants to buy prescription drugs at reduced prices from Canada and other countries. Although these programs clearly violate provisions of the Food, Drug and Cosmetic Act, the federal government has not taken decisive legal action against the states, instead preferring to focus its enforcement energy on private wholesalers who import drugs illegally for sale in the United States. Meanwhile, these state programs continue to operate with no serious federal resistance. Inside the Beltway, various Senators and Congressmen have taken up the call to arms, sponsoring bills aimed at legalizing drug importation. While several of these crucial bills have been held up, stalled or otherwise delayed, drug importation opponents have publicly questioned whether wholesale legalization of drug importation would truly best serve the American public, arguing that more appropriate channels exist for lowering the price of drugs in the United States. After addressing state-implemented drug programs, the federal and congressional response, and the thorny federalism issue that has developed, this paper will turn to the policy concerns behind drug importation. While many economists oppose drug importation on grounds that it would have deleterious effects on future research and development expenditures, critics have pointed to the fact that the pharmaceutical industry reaps large profits while enjoying the largesse of the federal dole in the form of subsidies and tax breaks. The paper will then present a tentative solution to the seemingly intractable problem of skyrocketing drug prices. This proposal utilizes market forces, rather than direct regulation or price controls, to keep costs more reasonable. Such a multi-pronged approach will require more reliance on generics, negotiations with the pharmaceutical companies to lower prices in the U.S. and a dialogue to persuade other developed countries to move away from monopsonistic price controls. This last step is probably the most difficult and controversial, but may be necessary in order to change the status quo where American consumers pay the brunt of the global cost of research and development. Although no solution will be easy to implement, nor will any one solution satisfy the divergent interests of the numerous parties affected by prescription drugs, some plan of action must be undertaken immediately to protect the needs of consumers while ensuring the future of drug research development in this country. Americans demand it.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:8889489
- HLS Student Papers