NationStates Jolt Archive

Normally I'm the kind of person you would expect to be against drug importation, but surprisingly, this is one issue where I'm squarely behind John Kerry.

Here’s why:

Drug companies are not going to stand idly by while re-importation costs them money.

The whole idea of drug re-importation is that drugs commonly used in the US are sold for a fraction of the cost in other countries.. If we want to reduce the cost of pharmaceuticals for US consumers, so the theory goes, all we need do is allow individual consumers to purchase their pills from pharmacies in other countries where they cost less and thus enjoy the same savings as, say, the Canadian customer.

This of course overlooks that there may be structural reasons why Canadian prices are significantly lower, and assumes that prices are higher in the US for no other reason than drug companies do it out of spite and greed. The prices are, in fact, lower for a variety of much more complex reasons, not least of which is the Canadian government’s unwillingness to pay more, but – and this is a large reservation – the Canadian market’s ability to achieve these savings is in part because it has no effect upon the US market’s profitability for pharmaceutical companies. Once there is a free flow of drugs across the border, pharmaceutical companies will have a far bigger share of their balance sheet dependant upon the prices they set in Canada.

So, where once pharmaceutical companies would set and negotiate the final price to customers in Canada based solely upon what they could reasonably expect to gain as the maximum amount of profit from the Canadian market alone, this final price in Canada will now represent to the drug companies: lost revenue in the form of US customers that have migrated their purchases north of the border; and, increased pressure on the part of the drug companies to maximize the profitability of non-US markets to compensate for the money they have lost in the US market.

The result? Well clearly faced with mass migration of consumers, and the consequent lost profits, the pharmaceutical industry will be forced to raise prices abroad. When prices are set in Canada, they will be done so in the context recapturing loss profits from the US market as well as the potential for profit from the Canadians themselves. Given the relative size of the Canadian market and the US market (I believe something on the order of sixty times larger in dollar figures), any market power the Canadians once had within their own borders will soon be overwhelmed by the market dynamics of the US. I would imaging that there will be a brief honeymoon period of cheap drugs from across the border followed by a rise in Canadian drug prices to near current US levels, and not the other way round. Realistically, of course market place expansion and spill-over benefit from the Canadian government’s healthcare system will also apply pressure to US prices but given the size of the two markets now, any downward pressure will be slight and the major effect will be large price increases in Canada. ( It may be argued that re-importation can occur from any approved western country, thus offsetting this realignment of price regimes, but for a variety of regulatory and language problems western Europe and Japan are not likely to practicable sources for such re-importation.)

So why do I support Kerry on this, other than I am a staunch believer in the expansion of free markets? Which BTW is exactly what this is. I am also for it because it is funny. The Canadian government, which subsidizes healthcare, will then either have to raise taxes enormously of ration services even more strictly. Ha-Ha. Canadians are always telling people in the US to get rid of Bush and vote for Kerry. Well if they get their wish, they’ll see there healthcare system collapse under the strain of trying to subsidize 300,000,000 US consumers. On the other hand it will make little practical difference to the US, except for further pissing Canadians off as they go without drug therapy.

So I say good job.

Your poll is obviously biased and flamish. How democratic... :rolleyes:

Your poll is obviously biased and flamish. How democratic... :rolleyes:


I prefer agitprop, but whatever.

Here's the deal: The really expensive part of drug manufacturing is the research. Billions of dollars are needed to make a new drug and get FDA approval.

Once it's made, however, drugs are very inexpensive to manufacture. I think it would sicken people to know what the markups are on some of them. In the 50,000% range and higher for some. These companies sell these drugs at almost pure profit. But to break even on their investment(or re-invest in new research) they must make a LOT of money. So they sell their drugs at high prices to those places that can afford them. However, not everybody can afford these prices. So they then supply to 'discount providers' at a reduced rate. THEN they supply to other countries at a further reduced rate.

THey have to sell, sell, sell. It almost doesn't matter what they sell for because they'll make a profit. BUT to recoup their losses as fast as possible, they have a program of charging people as much as they can.

I'm of two minds about this: First of all, I understand it. I don't begrudge pharmaceutical companies their profit. I don't begrudge their need to recover research expenses and to pay for new research.

However... I DO expect them to be competitive! WHY does it cost so much for research? Why? Are they doing it as efficiently as they can? WOuld the need to sell their drugs at lower prices force them to streamline research?

Or would it force them to raise the prices on those who can't afford to pay so those that CAN but want it cheaper can't get them from the cheaper distributors?

Tough questions to answer.

R&D is a key factor indeed. Does Canada have a patent office?

Here's the deal: The really expensive part of drug manufacturing is the research. Billions of dollars are needed to make a new drug and get FDA approval.

-&ct.



All good points, but I'm suggesting by allowing re-importation in to the US, drug companies will be forced to redefine what they consider acceptable prices for other countries. Because US consumers will be allowed to freely purchase north of the border, this will essentially make the canadian market an adjunct of the US, and any discounts they once recieved will disappear because of the pharmaceutical companies need to maintian high profit margins.

So the net result will be no real benefit to the US and the potential wrecking of candadian healthcare. I just think people should consider the real consequences of what seems, on the face of it, a panacea for high drug prices.

R&D is a key factor indeed. Does Canada have a patent office?

Yes, all WTO have patent protection, and are subject to treaties allowing international enforcement providing the patent is prosecuted internationally. (The madrid convention on I.P. I think, but I can't be bothered to look it up.)

The patent laws are meant to protect the original manufacturer for ~5 years so that they can remake their investment and then some, after that the patent is opened up and the generic brands can move in.

Market protectionism ends up costing your country more in the long run.

However the one thing the first poster missed is how market forces work.

Ie if you started to import from Canada, since the US outnumbers Canada 9:1 in population, it would drive the Canadian price up, so that a median price would be achieved, which due to the market strength would be more representative of consumer power in the US than it would in Canada.

To give the argument of market forces would be ignorant, market forces especially in America (the locusts that you are) is consumer driven in almost all non monopoly circumstances. The reason your prices are so high is because the drug manufacturers maintain an oligopoly, where they force you into a position of paying upon the Maximum profit line (this isn't the correct economic term, but probably better in laymans terms). To open the market up further would force the industries into a situation where they would need to operate upon a minimalistic profit alternative and those pharmaceuticals who aren't cost effective would be enveloped as the free market should do to them.

I'm amazed how many people are willing to allow themselves to be lap dogs for corporations, the protectionist system in reality causes the common man to suffer the most, as they are forced to subsidise these corporations beyond their means (rich people also also benefitted but they can afford it either way).

It truly amazes me that someone in the same breath can say "I want to make tax changes to benefit the lower class" and at the same time say "but I want you to pay way more than you need to for the things you need as well".

Yes, all WTO have patent protection, and are subject to treaties allowing international enforcement providing the patent is prosecuted internationally. (The madrid convention on I.P. I think, but I can't be bothered to look it up.)

Okay. Then there's no patent advantage to be discussed in this thread.

Though not all patents count everywhere, that is for sure. I at least know one example: software patents. Softpats don't count in the EU.

However... I DO expect them to be competitive! WHY does it cost so much for research? Why? Are they doing it as efficiently as they can? WOuld the need to sell their drugs at lower prices force them to streamline research?

Doubtful. What it would actually do is most likely to slow research into new products. The truth is, research is expensive - there's really no way around that. It require highly specialized equipment (we're talking in the several hundred thousand range for a single instrument), highly specialized reagents (generally on the order of several hundred for a few micrograms or microliters - although I'm sure they can get some at a wholesale price), and highly specialized labor - just as a start.

Ie if you started to import from Canada, since the US outnumbers Canada 9:1 in population, it would drive the Canadian price up, so that a median price would be achieved, which due to the market strength would be more representative of consumer power in the US than it would in Canada.

To give the argument of market forces would be ignorant, market forces especially in America (the locusts that you are) is consumer driven in almost all non monopoly circumstances. The reason your prices are so high is because the drug manufacturers maintain an oligopoly, where they force you into a position of paying upon the Maximum profit line (this isn't the correct economic term, but probably better in laymans terms). To open the market up further would force the industries into a situation where they would need to operate upon a minimalistic profit alternative and those pharmaceuticals who aren't cost effective would be enveloped as the free market should do to them.



But I would submit two things for consideration:

1. In dollar terms the ratio between the size of the US/Canadian market is far higher than 9:1, its nearer 60:1. Therefore adding the canadian market will have almost no effect on US drug prices, whereas it would push their to almost US levels.

2. Allowing re-importation would not alter the oligopoly. The same players would remain in the market and no additional competitors are created. So the net effect would only be that they as self interested actors would raise there prices in Canada to protect their US profits. Which is just tough luck for the Canadians, and doesn't help the US.

Okay. Then there's no patent advantage to be discussed in this thread.

Though not all patents count everywhere, that is for sure. I at least know one example: software patents. Softpats don't count in the EU.

Don't here either really. You cannot patent an algorithm. But there is a variety of slight of hand that can be done coupled with trade secrets &ct. there can accomplish the same.

Anyway both the EU and US do have some form of IP protection for software.

The patent laws are meant to protect the original manufacturer for ~5 years so that they can remake their investment and then some, after that the patent is opened up and the generic brands can move in.

Market protectionism ends up costing your country more in the long run.

However the one thing the first poster missed is how market forces work.

Ie if you started to import from Canada, since the US outnumbers Canada 9:1 in population, it would drive the Canadian price up, so that a median price would be achieved, which due to the market strength would be more representative of consumer power in the US than it would in Canada.

To give the argument of market forces would be ignorant, market forces especially in America (the locusts that you are) is consumer driven in almost all non monopoly circumstances. The reason your prices are so high is because the drug manufacturers maintain an oligopoly, where they force you into a position of paying upon the Maximum profit line (this isn't the correct economic term, but probably better in laymans terms). To open the market up further would force the industries into a situation where they would need to operate upon a minimalistic profit alternative and those pharmaceuticals who aren't cost effective would be enveloped as the free market should do to them.

I'm amazed how many people are willing to allow themselves to be lap dogs for corporations, the protectionist system in reality causes the common man to suffer the most, as they are forced to subsidise these corporations beyond their means (rich people also also benefitted but they can afford it either way).

It truly amazes me that someone in the same breath can say "I want to make tax changes to benefit the lower class" and at the same time say "but I want you to pay way more than you need to for the things you need as well".This would perhaps be true if the WORLD pharmacutical market were not an effective oligolopoly paralleling the US oligoopoly. Reinforced by patent laws, opening the market to reimportation would not introduce new manufacturers to the maretplace. Your argument demonstrates a poor understanding of the current dynamics of the pharmacutical marketplace, a highly artificial market.

Without supporting or disagreeing with the original premise, I have to interject a question about the US price. How much of the high price of drugs in the US is due to the fact that price is not directly passed on to the consumers for the most part - insurers & such paying most of the expenses of drugs, while the consumer usually only notices them indirectly through higher premiums and taxes? In socialized systems, the original consumer (the government) is aware of the costs of drugs and directly feels them, while US consumers for the most part are insulated from drug costs.

I would like to add a few points to ponder: Most American-based pharmaceutical companies have drugs on the market that have been 'paid off', or R&D costs have been more than recovered, but remain the same price to consumers. Good examples of this are McNeil's Tylenol, Bayer's Aspirin, etc. These products are pure profit, sold interntaionally, and although generic versions are available, are still profitable due to brand recognition. The income from these drugs pay for the R&D of new drugs, meaning that new medications are being released into the market 'paid off' and making pure profit as well.

Secondly, Canadian health care regions buy their drugs based on more than just price. Both hospitals I worked in purchased Tylenol as opposed to genereic brands because their 'filler' ingredients have no effect on patients, which cannot necessarily be said for generic brands. (Companies that make cheaper drugs use different fillers to cut costs, and sometimes the fillers can create reactions in certain patients. This is especially noticable in children.)

I would like to add a few points to ponder: Most American-based pharmaceutical companies have drugs on the market that have been 'paid off', or R&D costs have been more than recovered, but remain the same price to consumers. Good examples of this are McNeil's Tylenol, Bayer's Aspirin, etc. These products are pure profit, sold interntaionally, and although generic versions are available, are still profitable due to brand recognition. The income from these drugs pay for the R&D of new drugs, meaning that new medications are being released into the market 'paid off' and making pure profit as well.

Secondly, Canadian health care regions buy their drugs based on more than just price. Both hospitals I worked in purchased Tylenol as opposed to genereic brands because their 'filler' ingredients have no effect on patients, which cannot necessarily be said for generic brands. (Companies that make cheaper drugs use different fillers to cut costs, and sometimes the fillers can create reactions in certain patients. This is especially noticable in children.)

Well, actually that answers a question I have had for a while. I have always wondered in the case of non-prescription drugs whether or not the difference in price between generic and name brands was simply due to "branding" like in the clothing market, or if there was any real theraputic difference. Apparently the later it seems. Thank you.

People keep assuming the Canadian government would even agree to this. Obviously if it would hurt Canadians in any way (cost included) the Canadian government will simply say "no thanks" You make it sound as though if the President of the USA says it's okay, Canada will bend over.. I think Iraq proved that Canada doesn't bend over for the United States!

For once. Then we paid for it with a ban on beef and softwood lumber trade.

For once. Then we paid for it with a ban on beef and softwood lumber trade.

Hey, check Canada's economy, we're doing just fine ;)

People keep assuming the Canadian government would even agree to this. Obviously if it would hurt Canadians in any way (cost included) the Canadian government will simply say "no thanks" You make it sound as though if the President of the USA says it's okay, Canada will bend over.. I think Iraq proved that Canada doesn't bend over for the United States!You raise an interesting point. Currently the Canadian governments (I only know of provincial butthe national might be) are encouraging pharmacists to reimport drugs to the US, but if the prices to Cnadians began to rise significantly, the Canandian government would most likely make pharmacutical exports illegal.

There are pharmaceutical companies here that are making a killing selling prescription drugs to our southern neighbours. I think there would be a lot of angry entrepeneurs if we could not export drugs to the US.

You raise an interesting point. Currently the Canadian governments (I only know of provincial butthe national might be) are encouraging pharmacists to reimport drugs to the US, but if the prices to Cnadians began to rise significantly, the Canandian government would most likely make pharmacutical exports illegal.

Exactly, as long as it helps Canada or at least doesn't hurt us, I don't see a problem. However if it started to hurt Canada I'm sure the Canadian government would put a stop to it right quick. There are a few things Canadians don't like being messed with and our universal healthcare is one of them.

There are pharmaceutical companies here that are making a killing selling prescription drugs to our southern neighbours. I think there would be a lot of angry entrepeneurs if we could not export drugs to the US.

Oh, that's not to say Canada still wouldn't, but what I think you'd see is them putting a cap on it if it became a problem.

You raise an interesting point. Currently the Canadian governments (I only know of provincial butthe national might be) are encouraging pharmacists to reimport drugs to the US, but if the prices to Cnadians began to rise significantly, the Canandian government would most likely make pharmacutical exports illegal.

Why wouldn't you just price ceiling it? heh

People keep assuming the Canadian government would even agree to this. Obviously if it would hurt Canadians in any way (cost included) the Canadian government will simply say "no thanks" You make it sound as though if the President of the USA says it's okay, Canada will bend over.. I think Iraq proved that Canada doesn't bend over for the United States!

Yes, that's an interesting point, but one I left out intentionally because it implicates the WTO. Wouldn't that type of non-tarrif barrier trigger GATT agreements After all no WTO member is supposed to use NTBs unless it can point to a specific reservation in the GATT scheme - if i remember correctly.

So, unless Canada could justify such a ban for specific reasons it couldn't just ban the exports. The US had a similar problem with the importation of foreign refined gasoline and its implementation of enviromental standards (I vaguely remember). Anyway, it ended up the US had to alter some of its EPA laws because they were an impermissible non-tarrif restraint on trade. I know that this is a limping anology in many respects, but how could Canada justify such a law given that it is a restriction on international trade and that canadian consumers have full reciprocity of rights wiht the US, i.e., thay can purchase from pharmacies whenever they like.

So, unless Canada could justify such a ban for specific reasons it couldn't just ban the exports.

I think if we could show that it would destroy our own healthcare system, that would be reason enough. That or we could just ignore the WTO like the Americans do.. *LOL*

I think if we could show that it would destroy our own healthcare system, that would be reason enough. That or we could just ignore the WTO like the Americans do.. *LOL*

Well the US tried the argument that destroying the enviroment justified a NTB, but the WTO didn't see it that way. They really are quite heartless.

As to ignoring it, I suppose, but that usually ends up with a bit of a trade war. But see, this is why I didn't bring this aspect up, I knew it would devolve into a discussion of wider trade issues amongst other things. (we could also have a huge discussion that if consumers as well as national governments were given access to the WTO regulatory mechanism then this whole issue would be moot as patient adovcacy groups would already have petitioned to have all import/export resitrictions removed.)

My main point is that I think drug re-importation cannot benefit americans and can only hurt canadians. So we shouldn't even consider it, but rather look to other solutions.

My main point is that I think drug re-importation cannot benefit americans and can only hurt canadians. So we shouldn't even consider it, but rather look to other solutions.

Well, what doesn't make sense to me is why does the USA sell us the exact same drugs so much cheaper in the first place? It's because we buy in bulk.. maybe that is where you should focus on in a healthcare plan. Perhaps not re-importation.. but buying in bulk.. but there is no way Bush is going to do that to his buddies in the big drug companies.. I do suspect Kerry would consider it though. Food for thought ;)

Well, what doesn't make sense to me is why does the USA sell us the exact same drugs so much cheaper in the first place? It's because we buy in bulk.. maybe that is where you should focus on in a healthcare plan. Perhaps not re-importation.. but buying in bulk.. but there is no way Bush is going to do that to his buddies in the big drug companies.. I do suspect Kerry would consider it though. Food for thought ;)Bulk is not the factor, it is that you won't pay higher prices. Despite the claims about the nature of drug companies they are faced with a simple choice, either sell the drugs at below actual (instead of production) cost to most countries and make up the differencee in the US or insist upon pricing drugs at reasonable costs and letting people suffer/die because their governments see no reason to pay prices so much higher than the production costs. Truely heartless drug company exectives, of course, do not sell their drugs at below actual cost to Canadians others.

Bulk is not the factor, it is that you won't pay higher prices. Despite the claims about the nature of drug companies they are faced with a simple choice, either sell the drugs at below actual (instead of production) cost to most countries and make up the differencee in the US or insist upon pricing drugs at reasonable costs and letting people suffer/die because their governments see no reason to pay prices so much higher than the production costs. Truely heartless drug company exectives, of course, do not sell their drugs at below actual cost to Canadians others.

I do believe that buying in bulk is in fact a factor. I admit buying drugs is not some thing I know a lot about.. it's not really my area of knowledge.. but I do know that we buy in bulk in Canada. So it has to be at least one of the factors.

I do believe that buying in bulk is in fact a factor. I admit buying drugs is not some thing I know a lot about.. it's not really my area of knowledge.. but I do know that we buy in bulk in Canada. So it has to be at least one of the factors.Nope, in the US there are a variety of bulk puchasing setups (MediCal alone buys more drugs than ALL of Canada for instance) and the prices are still higher.

Well, what doesn't make sense to me is why does the USA sell us the exact same drugs so much cheaper in the first place? It's because we buy in bulk.. maybe that is where you should focus on in a healthcare plan. Perhaps not re-importation.. but buying in bulk.. but there is no way Bush is going to do that to his buddies in the big drug companies.. I do suspect Kerry would consider it though. Food for thought ;)

Well its certainly something to consider, but one that neither party has really got behind. Kerry has advocated for medicare to be given that authority, but wht it's effects would be are unknown [edit: by this I mean centrally purchasing all drugs in the US instead of the current mixed scheme with HMO's etc.] If anything, the US government tends to overpay when it bulk purchases, look at the pentagon. Plus, bulk government purchases always end up being mired in byzantine regulations over here to ensure "fair treatment."

The other aspect is, that as everything stands now, if pharmaceutical companies lost their US profits, as someone noted above, it may become impractible financially to develop new drugs. If that's true then the would either give that end of the business up and concentrate on marketing current lines, or they would raise bulk prices world wide. Anyway you look at it, any effort to try and reduce drug costs here is bound to effect prices abroad.

If it is really necessary to lower prices in the US -and the jury is still out -, then a sensible strategy that considers all possible eventuality needs to thought out.

One option is to reject the private model recognizing that the drug industry occupies a unique position in modern society that effects a number of non-econmic issues. Much as the government now provides the bulk of education and mass transit services, maybe it needs to step in and administer drug development and production directly.

Another possibility is to maybe transfer the development of drugs to offshore companies and allow countries like India to do the bulk of the research are a far lower cost in human capital. Of course this solution would further increase the transfer of high paying jobs to outside the US and does nothing to alter the now ponderous FDA regulations that make devolping a drug so onerous.

In any event, the drug price issue is a lot larger than people would like to pretend.

Nope, in the US there are a variety of bulk puchasing setups (MediCal alone buys more drugs than ALL of Canada for instance) and the prices are still higher.

Well then why doesn't the American government cap these assholes? If you do it within your own borders, then it's none of the WTO business. I know the Republicans won't, but if Kerry does win the election.. Maybe they could talk him into it? I don't know.. Canada runs on a fine balance of capitalism with just the right amount of socialism.. it has served Canada well.. it's why we have such a high standard of living.. we take care of every one and still let people get rich if they have what it takes. Just seems to me like any thing that is absolute is a bad thing. Absolute socialism is bad, absolute capitalism is bad.. yeah know. Seems such a shame that being such a rich country America can't figure out a way to take care of their own. I mean Canada has it's problems, don't get me wrong. But Canada's system just seem more compassionate and makes more sense. Meh, maybe it's because I'm Canadian that I think this way.. heh, who knows. I suppose there are no easy answers.

I would like to add a few points to ponder: Most American-based pharmaceutical companies have drugs on the market that have been 'paid off', or R&D costs have been more than recovered, but remain the same price to consumers. Good examples of this are McNeil's Tylenol, Bayer's Aspirin, etc. These products are pure profit, sold interntaionally, and although generic versions are available, are still profitable due to brand recognition. The income from these drugs pay for the R&D of new drugs, meaning that new medications are being released into the market 'paid off' and making pure profit as well.

Secondly, Canadian health care regions buy their drugs based on more than just price. Both hospitals I worked in purchased Tylenol as opposed to genereic brands because their 'filler' ingredients have no effect on patients, which cannot necessarily be said for generic brands. (Companies that make cheaper drugs use different fillers to cut costs, and sometimes the fillers can create reactions in certain patients. This is especially noticable in children.)

Drug companies require little capital to invest in R&D for drugs. The important thing to remember, though, is certain drugs are not required in the sense that they are useful in health care. Viagra is a good example of this. Many years and millions of dollars went into R&D for Viagra, money that could have been spent for cancer-fighting drugs, or HIV-healing drugs. Consumer demand drives the pharmaceutical market, and consumers pay a premium for drugs they 'want' so companies can make the drugs people 'need'.

Normally I'm the kind of person you would expect to be against drug importation, but surprisingly, this is one issue where I'm squarely behind John Kerry.

Here’s why:

Drug companies are not going to stand idly by while re-importation costs them money.

The whole idea of drug re-importation is that drugs commonly used in the US are sold for a fraction of the cost in other countries.. If we want to reduce the cost of pharmaceuticals for US consumers, so the theory goes, all we need do is allow individual consumers to purchase their pills from pharmacies in other countries where they cost less and thus enjoy the same savings as, say, the Canadian customer.

This of course overlooks that there may be structural reasons why Canadian prices are significantly lower, and assumes that prices are higher in the US for no other reason than drug companies do it out of spite and greed. The prices are, in fact, lower for a variety of much more complex reasons, not least of which is the Canadian government’s unwillingness to pay more, but – and this is a large reservation – the Canadian market’s ability to achieve these savings is in part because it has no effect upon the US market’s profitability for pharmaceutical companies. Once there is a free flow of drugs across the border, pharmaceutical companies will have a far bigger share of their balance sheet dependant upon the prices they set in Canada.

So, where once pharmaceutical companies would set and negotiate the final price to customers in Canada based solely upon what they could reasonably expect to gain as the maximum amount of profit from the Canadian market alone, this final price in Canada will now represent to the drug companies: lost revenue in the form of US customers that have migrated their purchases north of the border; and, increased pressure on the part of the drug companies to maximize the profitability of non-US markets to compensate for the money they have lost in the US market.

The result? Well clearly faced with mass migration of consumers, and the consequent lost profits, the pharmaceutical industry will be forced to raise prices abroad. When prices are set in Canada, they will be done so in the context recapturing loss profits from the US market as well as the potential for profit from the Canadians themselves. Given the relative size of the Canadian market and the US market (I believe something on the order of sixty times larger in dollar figures), any market power the Canadians once had within their own borders will soon be overwhelmed by the market dynamics of the US. I would imaging that there will be a brief honeymoon period of cheap drugs from across the border followed by a rise in Canadian drug prices to near current US levels, and not the other way round. Realistically, of course market place expansion and spill-over benefit from the Canadian government’s healthcare system will also apply pressure to US prices but given the size of the two markets now, any downward pressure will be slight and the major effect will be large price increases in Canada. ( It may be argued that re-importation can occur from any approved western country, thus offsetting this realignment of price regimes, but for a variety of regulatory and language problems western Europe and Japan are not likely to practicable sources for such re-importation.)

So why do I support Kerry on this, other than I am a staunch believer in the expansion of free markets? Which BTW is exactly what this is. I am also for it because it is funny. The Canadian government, which subsidizes healthcare, will then either have to raise taxes enormously of ration services even more strictly. Ha-Ha. Canadians are always telling people in the US to get rid of Bush and vote for Kerry. Well if they get their wish, they’ll see there healthcare system collapse under the strain of trying to subsidize 300,000,000 US consumers. On the other hand it will make little practical difference to the US, except for further pissing Canadians off as they go without drug therapy.

So I say good job.


OMFG!!!!!!

someone with a grasp of economincs and reality? This cannot be a nationstates post. I mean, people here believe that inovation comes at no costs and people who take risk by investing in research that might or moght not result in profit should indeed be demonized when they make a return on their dollar.

It never occurs that is the ratio was shifted a little bit and people invested(took risk) but didnt receive an addequate retrurn, well then they might not invest at all.

but hey its why people who can..... do .... while others(me included) sit around posting.

Well then why doesn't the American government cap these assholes? If you do it within your own borders, then it's none of the WTO business. I know the Republicans won't, but if Kerry does win the election.. Maybe they could talk him into it? I don't know.. Canada runs on a fine balance of capitalism with just the right amount of socialism.. it has served Canada well.. it's why we have such a high standard of living.. we take care of every one and still let people get rich if they have what it takes. Just seems to me like any thing that is absolute is a bad thing. Absolute socialism is bad, absolute capitalism is bad.. yeah know. Seems such a shame that being such a rich country America can't figure out a way to take care of their own. I mean Canada has it's problems, don't get me wrong. But Canada's system just seem more compassionate and makes more sense. Meh, maybe it's because I'm Canadian that I think this way.. heh, who knows. I suppose there are no easy answers. Sure, tell people they're going to die because you don't want to spend the money. I'm sorry but we could have had a drug to cure your disease, but no one wanted to pay to develop it so you're screwed.

Canada on drugs does not have a fine ballance between capitalism and socialism, it has a parasitic relationship with the US (as does most of the world), which basically pays the capital costs for new drugs. If the US wasn't paying so much for drugs, either drug research would stop or worldwide drug prices would skyrocket. And government funded drug research is just too expensive (about 5 times as expensive as private research / although these comparisons are blurry since private reseach may go after the low hanging fruit ( although is by no means a sure thing / studiies in the field tend to be too ideologically driven for me to trust them)). It's not really a simple issue, the pricing of drugs is driven by so wierd and distorted market that I doubt anyone truely understands it, but certain limited general statements can be made, like the US consumers pretty much pay to develop new drugs for the world.

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We must reduce the cost of being healthy for everybody.
For more information on health care visit http://www.johnkerry.com/issues/health_care/

Drug companies require little capital to invest in R&D for drugs. The important thing to remember, though, is certain drugs are not required in the sense that they are useful in health care. Viagra is a good example of this. Many years and millions of dollars went into R&D for Viagra, money that could have been spent for cancer-fighting drugs, or HIV-healing drugs. Consumer demand drives the pharmaceutical market, and consumers pay a premium for drugs they 'want' so companies can make the drugs people 'need'.
It would be better if you chose a different example than Viagra. Viagra was developed as a medication for angina and the whole errectile disfunction thing was a side effect.

Drug compnies require massive ammounts of capital to produce salable pharmacuticals - while many drugs are scrapped before eating up mor ethan few million dollars in development costs, for every new drug which makes it to market about $5BillionUS was spent on R&D, according to the more favorable numbers - some people triple that. An individual drug might only need a few dozen millions for R&D but there are innumerable drugs which never get to market which also have to be paid for.

A) That is not true and B) It's insulting.

Also, Canada has more natural resources then any country on the face of the planet. I'm sure if the USA didn't want to buy our products there are many others out there who would. Don't forget it was America's idea to have free trade and then NAFTA, don't blame Canada because it backfired on you. There is little doubt that the US thought they were going to stick it to every one else.. and it sure looked at the time like that was going to happen, well it didn't, now your own brain child of free trade is sticking it to you. We have a nice healthy trade surplus every year and have for over a decade.


This is all true, especially that canada's relationship is not parasitic. The current price scheme in Canada is just what Canadians have managed to negotiate in light of the current realities of the drug market. These realities will change if any of the major structural changes to the current regime are implemented; some of these options will change the Canadian market more than others.

As to the free trade aspect, actually the US was rather late to that party, and most of the thinkers that supported it recognized that it would cause dislocations in domestic markets. However the overall idea was that ultimately it was the best method of spreading prosperity around the world by allowing nations to compete equally in any market, thus allowing them to maximize there returns from products and services they produce best and most cheaply. So really it is not, in principal, a bad idea. (Should we ban german luxury auto's because we cannot make them as well so cheaply? And what would that result in, a loss to germany and the other nations that supply it with materials and finished goods, while punishing the US consumer. Moreover moving jobs to where they can be done more productively frees US workers to engage in activities where local conditions make them more efficient, thus actually increasing the potential size of the US economy.)

The problem with the free trade model is that it invariaby produces local dislocations that cause societal upheaval in the short term. Also if not properly regulated it can result in predatory pricing. Most disturbing of all, when it is forced upon nations that do not have an adequatley regulated internal market, it can have disasterous results, for example in the case of jamaica or peru.

So it is a bit of a "curates egg." There is no doubt that free trade has in general been beneficial in cases such as the UKs entry to the EEC (now the EU), but in the case of nations like jamaica it has virtually destroyed the national economy and there is no hope of recovery. But then again china, economically has prospered, financially at least. I go on but you get the point. Interestingly however, most off the failures can be attributed to the prevailing domestice conditions in the sense that there was inadaquate domestic regulation in the sense of well established property rights and rule of law - that or government by maniacs in the case of Argentina - rather than because of free trade per-se.

The US trade defiecit is somewhat alarming, but that is more a function of the dollar being artificially supported by our trading partners. The peoples republic of China is the number one purchaser of US treasury obligations in order to keep the dollar strong and their export market strong and profitable. We, because of our deficit are "selling short." This artificial inflation of the dollar will hurt them more than it hurts us eventually. And when the dollar collapses, as it will, then the imbalance will correct itself.