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Close the door on reimportation
Three weeks ago, the House passed the prescription-drug bill by only one vote. To get that one vote, House leaders -- in the wee hours of the morning -- agreed to Rep. Jo Ann Emerson's demand to permit a stand-alone vote on reimportation of drugs from foreign countries. Today, she gets what she asked for. Originally scheduled for yesterday, the vote was delayed 24 hours to allow opponents time to muster the votes to defeat the legislation. And defeat it they must.
Reimportation subjects the American market to the whims of foreign governments. Consider that Bernie Sanders, the only openly socialist member of the House, supports it as a way to force lower domestic prices. The group Republican whips are having the most difficult time getting in line are not liberals who favor anything for cheaper drugs, however, but conservatives, such as Reps. Jeff Flake and Trent Franks. They argue that letting U.S.-made drugs exported to foreign countries to be imported back into America is a free-trade issue.
The libertarian Cato Institute's Doug Bandow counters that what reimportation truly brings into the country are Canadian, European and Mexican regulatory regimes. "Among industrialized states," he says, "only America offers a genuinely free market in drugs." The rest all depend on price controls and subsidies to keep prices down. Simply put, reimportation is the antithesis of free trade, which depends on the very market principles that are undermined by government intervention. In a July 11 letter to Speaker Dennis Hastert, Stuart Eizenstat -- who was deputy Treasury secretary and undersecretary of Commerce for International Trade in the Clinton administration -- calls reimportation "dumping" by "sanctioning unfair competition between price-controlled pharmaceuticals from abroad and those based on market-related prices in the United States."
Another Democrat who is fighting today's bill is John Dingell, the tough dean of the House who has called reimportation "reckless" and said it would "lead to needless injuries and deaths." Last year, Health and Human Services Secretary Tommy Thompson warned that, "Opening up our borders to reimported drugs potentially could increase the flow of counterfeit drugs, cheap foreign copies of FDA-approved drugs, expired and contaminated drugs and drugs stored under inappropriate and unsafe conditions." The bill up today would allow reimportation from 25 countries. The U.S. Food and Drug Administration has stated that it cannot guarantee the safety or authenticity of drugs once they have left America. This is no small problem. In Belgium recently, authorities confiscated 57,800 cases of counterfeit drugs from China. Belgium is one of the nations that could reimport medicines into America under today's legislation. Unless Belgians catch 100 percent of the drugs smuggled into their borders, it will be next to impossible to prevent black-market products from then being sent here. And even if Belgium can control the fakes, that doesn't mean the other 24 reimporting countries can or will.
Reimportation also undermines future innovation by cutting into pharmaceutical companies' profits, which are used to research and develop new medicines. As it is, U.S. pharmaceutical firms sell drugs to price-controlled countries even though they make a tiny return. Despite having their profits undercut, U.S. drug companies are blackmailed into not cutting off sales. Essentially, foreign governments say they will only protect patents if the flow of cheap drugs keeps coming. This is not the American way. Reimportation genuflects to socialized systems in Canada and elsewhere. Reimportation is not about free trade; it is about government control -- which is what conservatives are supposed to be fighting against.
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