Economists told a Department of Health and Human Services panel on April 27 that allowing reimportation from Canada of pharmaceuticals so that they can be purchased by Americans at the low prices mandated by Canadian would hurt the research and development of new drugs in the lung run.
That's not surprising, since price controls (which are what we would really be importing from Canada) undermine profit, making it less worthwhile for companies to invest in producing products in the first place. Most of the drugs coming from Canada started out in the U.S., and if their price is effectively lowered in the U.S. to Canadian levels, drug companies will suffer, will see the profit margins on pharmaceuticals, and will be more cautious about creating the next generation of always-economically-risky new drugs. Canadians will suffer, too, and much sooner, since they'll suddenly see shortages of once-plentiful artificially-cheap drugs flowing across the border to their eager new U.S. customers.
Holman Jenkins, writing in the Wall Street Journal, asks the rather logical and surprisingly rarely heard question, "if the Canadian system is so great, why not just enact our own Canadian-style price controls here? Or why not just mandate that all U.S. drugs be shipped to Canada and then shipped back so they'll be eligible for Canadian prices and all Americans can have cheaper drugs?"
It's crossed my mind that since the real goal is to import other countries' price controls, not strictly speaking their drugs, the pro-price-control crowd might want to consider another cost-saving measure: Why not just cut to the chase and find the square acre on this planet with the strictest price controls perhaps some town in North Korea and simply transfer ownership of American drugs to people in that blessed anticapitalist acre on paper, without the ludicrous expense of shipping the drugs overseas and then shipping them back? Once the drugs have been owned for a few seconds on paper, which is as legally binding as holding something in your hands, after all they can then be declared Korean (or Albanian or what-have-you) "imports," have "Korean import" stamped on their sides, and ownership can be transferred back to needy Americans at socialist foreign prices. Think of the savings on shipping costs! (There is already talk of U.S. governors shopping around in Europe for better price-control-mandated deals than they can get in Canada.)
Of course, if my Korean plan went into effect, you'd think the drug companies would catch on to the fact that they were selling their wares to Americans (albeit indirectly) at significantly-reduced prices, so they might stop transferring ownership to North Koreans but we could simply mandate a certain level of exports on the part of the companies, to keep the system going, at least until the drug companies start looking for other lines of work they go into that are more profitable as their shareholders will start dictating sooner or later.
But why leave them anywhere to run or hide? We could import price controls on all other goods and all other industries on a piecemeal basis from other countries. There must be a country out there with laws mandating low prices on cars...or rice...or TV sets. America, you need never pay high prices again. It all makes such perfect sense now.