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The coalition that has rallied around price controls likes to say, "A drug that is unaffordable is neither safe nor effective." But as the "European disease" has shown, price controls will not merely make medicines more "affordable." They will make them unavailable and undiscoverable.

The vast majority of new life-saving drugs come from America these days, mainly because companies are allowed to reap the profits. I'm reading this book right now, which makes it clear that selling drugs in Europe is usually at a loss.

That, of course, has an effect on R&D efforts there, which leads to fewer new drug developments. Milton Friedman's response at a conference last year, saying that the companies are operating under a contract specifying that re-importation isn't allowed. He neglects the coercive power of government to force re-importation. Hopefully companies will still be allowed to not sell their product in those other countries with price controls. The response will probably be a massive violation of patents with illegal production of the drugs.

I can’t believe folks in congress can be so shortsighted – seeing only their next election and wanting to look like they have “taken action” on expensive drugs.

[No one seems to complain about the innovations until they become too expensive. If someone developed a box that allowed you to talk directly to God for half your net worth, I’m sure you’d get Edwards up on stage complaining about the two Americas again…]


At 10:18 AM, Blogger Miguel said...

I have a friend who gets a little extra money with a website importing drugs from Canada... I think from many Americans' perspective, it seems silly to subsidize R&D for the rest of the world, especially when there's a strong case to be made that the beneficiaries are both French people and sleazebag corporados. What book are you reading?

At 3:10 PM, Blogger Ivan said...

I'm not sure why the url isn't working. It's an issue with Blogger...

Anyway, I'm reading this:

As a free-trader by default, I don't have a problem with reimportation unless it is forced upon the company which might have a contract with other nations not to export.

Probably the best solution over all would be to eliminate the FDA.


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