[Pharm-policy] Toronto Star-The evils of paying less for our drugs

[Thiru Balasubramaniam]

This tongue-in-cheek op-ed by Dalton Camp is a riposte of Fred McMahon's
National Post piece.  As Jamie posted earlier, "in nominal 1998 GNP per
capital, US was $29,240 and Canada was $19,170.  However, in GPD per
capital, expressed in purchasing power parity, which the drug companies
seem to like better, the figures are $29,605 for US, and $23,582" for
Canada.   (Source: UNDP Human Development Report 2000)


Thiru




Copied For Fair-Use


http://www.thestar.com/back_issues/ED20000927/opinion/20000927NEW02b_OP-CAMP.html


The evils of paying less for our drugs 

The proclivity of elderly Americans to travel to Canada to buy their
prescriptive drugs, thereby saving themselves from paying more for the
same drugs at home, is causing untold but visible stress.  Right-wing
militants are shocked - shocked! - that geezers would betray their
country and display such raw ingratitude to Warner Lambert and kindred
pharmaceutical houses.

The drug industry has responded, best it can, with a television ad
campaign aimed at these border-crossing, bargain-hunting seniors,
warning them of the perils of buying the same drugs abroad for less: The
Canadian government, say the ads, controls the drug industrywith armies
of bureaucrats - socialized medicine, that's what - and if the old folks
don't watch out, hair will grow on the palms of their hands. 

The campaign provides one answer as to why U.S. drugs are priced are so
high: The manufacturers add on a socialist-prevention charge per pill.
And it's working, right? 

Canadians pay less, for whatever reason. This troublesome reality has
become a bone in the throat to the Fraser Institute, Canada's right-wing
think tank. The operating premise at the Institute is that free market
competition is the surest guarantor of fair prices. Thus, the
intervention of government - the ``dead hand,'' as we were always told -
brought only shortages, higher prices, scarcities, and other misery.
Since this line of thought can't be proven by the Canada-U.S. drug
business, the thinkers at the Institute have been investigating the
heretical contradiction, seeking some compelling explanation other than
the obvious. 

The obvious explanation is that the Canadian government does provide
regulatory authority over drug pricing. This is anathema to the
bureaucrats at the Fraser Institute who are paid to think otherwise.
Their ``otherwise'' conclusion to the price discrepancy issue surfaced
last Monday in the National (Alliance) Post: The reason Canadians pay
less than Americans for the same drugs is because Canada is a poorer
country and the United States a richer one. See? 

This is an astonishing discovery. The Institute is anxious also that
Canadians know they pay less for drugs, not because of socialist,
bureaucratic government interference in the natural laws of corporate
price-fixing, but because it just happens, as Newton's apple falls to
earth. The Institute should next explain why cars cost more here than
there, or bananas. If we're too poor to pay the going price (U.S.) for
drugs, what about Jeeps and the New York Times? 

<SNIP>


Canadian newspaper readers are being smothered in propaganda that
editors peculiarly deem newsworthy. As a result, there may be several
Canadians walking the streets today who have read the Institute's report
in the press about lower-priced drugs in Canada and who feel outraged to
learn they are being subsidized, or patronized, by well-meaning
international drug firms because they think Canadians are living in
poverty. (Come to think of it, this also probably explains why the cost
of American cigarettes, containing a non-prescriptive drug, is cheaper
in Third World countries than even in Canada, poor as it is.) 

                         
<SNIP>


                         Dalton Camp writes on Wednesdays and Sundays in
The Star.