In late October, Republican state senator Chris Lauzen of Aurora took the train to the Loop to speak at a symposium sponsored by the libertarian/conservative Heartland Institute. The topic was bringing in low-priced prescription drugs from Canada, and the seven other speakers that day argued that reimporting drugs would be either useless or counterproductive–the same thing Heartland’s president, Joseph Bast, has since contended in an October 31 Tribune op-ed piece. Lauzen was the only one in favor of the idea.
Lauzen considers himself “a pro-profit kind of guy,” but only “as long as there’s a level playing field and ample competition.” He doesn’t see one in the pharmaceutical business, nor do his constituents, who’ve been giving him an earful. Ahead of him in line at the train station that morning was a breast-cancer patient who asked him to explain why tamoxifen costs ten times as much here as it does in Canada.
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If anyone were free to copy a product as soon as it appeared and sell it for little more than the cost of manufacturing it, no one would be able to charge enough to pay for the research needed to create new drugs or software, and soon no one would do any. This kind of no-holds-barred competitive market would pretty much prevent the creation of new drugs and software as we know them.
Reimporting price-controlled drugs from Canada could save money in the short run, some of the economists at the symposium conceded, but in the long run it will cause new drug development to dry up. Such an outcome, Entin says, would “snatch disease from the jaws of victory.” Of course if the companies exercise their legal right to send fewer drugs north of the border it might not even lower prices much.
Chicago-school economics often seems to describe a beautiful closed world–shake the glass ball and the snow always falls back down. It has little to say about what happens to snow elsewhere or whether snow is actually a good idea.
Lauzen and Entin cordially discussed the issue for almost half an hour in the hallway. “I was deeply impressed,” Lauzen said afterward. “He made a lot of sense. But I’m not sure he’s had the experience of going eyeball to eyeball and seeing the tears” of people squeezed by drug prices. Lauzen’s hope is that reimporting drugs from Canada will put market pressure on the pharmaceutical giants to cut some fat. “I know they’ll find a way,” he says. “A little less glass office towers, a little older corporate jets.”
