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February 08, 2005

Cheaper drugs at whose expense?

From ABCNews:

Trying to circumvent soaring prescription drug prices in the United States, an estimated 2 million Americans buy their medications from Internet pharmacies in Canada, which employs government price controls. Some major pharmaceutical companies are now aggressively trying to stop the cross-border sales.

There's more to the story, but I just wanted to touch on the point that many of you are more than likely responding to: the idea of big Pharmaceutical companies keeping their prices high.

As with any industry, businesses do not exist to go broke. They have to make a profit. Due to the fickle nature of consumers in order to make that profit they have to spend lots of money on advertising. Due to the lax laws we've allowed in regards to litigation, they also have to go through lengthy, expensive testing to determine if a drug is safe, and even then, the first hint of anyone having a problem, people line up with the pockets open, eyes brimming with tears, begging some jury to have several millions dollars worth of pity on them, usually for something their own commons sense (had they had any) would have prevented.

Meanwhile the Canadian government places price caps on medicine sold in Canada. What we aren't told is that the result is the pharmaceutical companies regain that lost profit by raising the price of drugs sold in the US. (not selling to Canada at all would be PR suicide, and the Canadian government knows that, therefore chose to use the health of its people as an campaign ploy). The online pharmacies are using the Canadian price caps to sell prescription medicine to Americans at Canadian prices.

What too few people realize is that these drug companies often produce rare drugs, used by few people at a loss. They do so because if they didn't many people (while only a few use any individual drug, there are a multitude of conditions that would require one of these so-called orphan drugs) would suffer or even die. They drug companies are able to because of the pricing structure that exists. When Canada and online pharmacies try to under cut that pricing structure, they are potentially harming millions of people who may find that the only drug company that made their medicine -- decided to cut production in order to avoid closing down all together.

But hey, as long as it's someone else that's doing the suffering, what's it to me, right.

Posted by Jack Lewis at February 8, 2005 08:06 AM

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