Here’s something that always amuses me about capitalists. Once they get to be successful, they almost always want to be protected from capitalism. That is to say, competition.
And the best example I know is the pharmaceutical companies, who really began to freak out when people started to discuss importing cheaper drugs from Canada.
Now isn’t that supposed to be what capitalism is all about?
Honest competition to try to deliver better products for less money for the consumer? Wasn’t that what you were told in your high school economics class? According to this model, the proper U.S. drug company response should have been to lower prices, and start a crash program to find ways to improve both price and quality.
But did they do that? Of course not. The big pharmaceutical companies ran crying to Washington.
Two years, a Bush Administration task force report appeared that was described as a “Christmas present for the pharmaceutical industry.” It moaned about how costly and complex importing drugs would be. While it did indicate Canadian drugs were perfectly safe, administration spokesmen went around hinting otherwise.
What was most amusing was that the task force moaned that if reimportation of Canadian drugs were legal, the poor drug companies would have billions less to spend on research and development.
That would mean fewer new drugs, and we would all suffer. Here’s a little something the report didn’t mention. The combined profits for the ten Fortune 500 drug companies in one recent year was almost $36 billion dollars.
To put things in perspective, that was more money than all the profits combined of all the other 490 companies on the Fortune list.
On the other hand, the Congressional Budget Office analysis found that if importing drugs from Canada was fully legal, it could save consumers in the United States $40 billion a year. That would also eliminate any threat of bogus or unsafe drugs coming in through back-alley internet sites.
The ironic twist on all this is that now Canadian pharmacists are getting up in arms over the import issue. With Democrats now solidly in control of Congress, they fear that reimportation will be legalized.
They worry that insurance companies and other big American companies will swoop down, buy vast quantities of Coumadin and Xanax and leave their shelves bare.
My guess is that twin battles will play out in both Ottawa and Washington next year. It wouldn’t surprise me to learn that the big pharmaceuticals are lobbying Canada to get them to prevent sales of their drugs to us lower Americans.
There is a sensible solution to all this, by the way.
The antitrust division of the Justice Department and the Food and Drug Administration could require Big Pharma to sell their products to the American people at a reasonable price. If there were ever an industry that called out for proper regulation, this one is it.
However, I’d advise against holding your breath until that happens. At least not until Jan. 20, 2009.