Importing failure

George Santayana observed that “Fanaticism consists in redoubling your effort when you have forgotten your aim.” What else can explain the feverish insistence of the supporters of drug importation to press on in the face of a comprehensive and well-documented report that concludes that importation of medicines from price controlled countries is not only a form of price controls, but a form of price controls that doesn’t even save money, which was the point of importation in the first place?

Let us go back to the beginning of this issue. Importation proponentslike Rep. Gil Gutknecht, Minnesota Republican, insisted that shipping drugs in from othercountries would save us at least $630 billion overthenext decade.That’s nearly 40 percent of whatAmerica spends on medicines each year! Guess what? Not one reputable study anywhere comes close to that number. Europe saves less than one percent though 20 percent of its drugs are imported from low price-controlled nations thanks to markups from middlemen and government regulations.

Importation proponents are not the least interested in Medicare drug cards or generic medicines as a means for reducing drug costs. As the report makes clear, there are not enough price-controlled drugs from the one country where it might be safe to get them from,namelyCanada. Canada has gone so far as to assert it will not honor any bulk orders of medicines to protect its limited supply. And importation proponents have no real plan to come up with the rest of the medicines at price-controlled prices from other countries. Some want to force the FDA to allow the importation of similar medicines of similar doses made in Europe and to de facto give them FDA approval without going through the agency’s review process. For all their professed concern about safety, in the post-Vioxx era, the pro-importation side’s cavalier approach to drug safety will not stand.

For the longest time, the drug-importation advocates have flown under the banner of free trade without being called to account by the media. Sen. Byron Dorgan and Mr. Gutkneckt in particular have fought against the importation of products priced below market from Canada on the grounds they would hurt particular American industries. But when it comes to bringing in price-controlled drugs from abroad, they are the first to insure they get here by hook or crook.

The fact is, price controls are a form of theft. They steal the will to innovate by taking money that would go to new drug development and forcibly handing it over to middlemen. They steal intellectual property because they siphon off capital that would be invested as a company deems consistent with new discoveries.

Because they are always linked with strict controls on access to new medicines, they steal the opportunity to live longer lives from people. As a related Department of Commerce study found, every country with price controls rations or delays access to better medicines and people pay for it with their lives.

If importation advocates really want price-controlled medicines so badly, why don’t they have the guts to propose them here instead of importing them from France or Canada or Germany? Why not have the real importation debate: Will we impose price controls and outsource our flourishing biomedical industries to the Far East, or will this republic prosper as the world’s best hope for fighting disease, enriching life for generations to come?

Robert Goldberg is director of the Manhattan Institute’s Center for Medical Progress.