Drug Reimportation Increases Medical Freedom

The House of Representatives concluded its summer session by passing legislation that would allow Americans to buy prescription drugs from Canada and several other nations.  This practice is known as “reimportation,” because the drugs originally were manufactured in the U.S. and exported.  Federal law currently prohibits Americans from buying pharmaceuticals from other countries, even though identical drugs often cost one-third to one-half less in foreign pharmacies.  So while Americans ostensibly enjoy a freer economy than the rest of the world, they perversely pay more for their prescriptions than residents of any other nation.

The pharmaceutical industry obviously likes this, and it worked overtime lobbying against the reimportation measure- paying off some strange bedfellows in the process.  Several supposedly free-market groups came out against reimportation, making tortured attempts to argue that the free-market principles they normally promote somehow just don’t apply to imported prescription drugs.  Some even made the outrageous argument that reimportation will threaten the pharmaceutical industry’s profits, as though it is the job of government to ensure the profitability of any industry!

The truth is that many of the organizations opposing reimportation either directly represent the pharmaceutical industry, or receive funding from it.  They are transparently willing to abandon their free-market “principles” when necessary to protect their bottom line.

The arguments against reimportation amount to simple protectionism.  Opponents of reimportation want to preserve artificially high drug prices in America at the expense of drug consumers.  They rely on two tired and demonstrably false claims: namely, that the free market does not work when it comes to health care, and that there is no “level playing field” because other countries impose price controls on drugs.  These protectionist arguments are used as justification for imposing higher costs on Americans by limiting their consumer choices.

It does not matter if the Canadians or Germans employ price controls.  Their drug prices may be artificially low, while ours may be artificially high.  This simply shows that both the U.S. and other countries interfere in the market.  It is not a justification for further intervention in the market by prohibiting reimportation.  American consumers should not be punished simply because other governments have foolish economic policies. 

Pharmaceutical companies certainly own the drugs they produce, and they have every right to sell them at any price they choose.  They also have the right not to sell their products to foreign pharmacies, or to condition sales on an agreement that such pharmacies will not reimport into the U.S.  They do not have a right, however, to use government to prevent Americans from buying drugs from any willing seller they choose, regardless of where that seller may be located. To quote Sheldon Richman, a scholar at the Future of Freedom Foundation, “The U.S. government has no business telling the American people what they may and may not buy from people living outside the country.  That’s called freedom, something earlier Americans actually understood and valued.”

Reimportation is hardly a solution to our health care woes, of course, and the bill faces a highly uncertain future in the Senate.  Reimportation would, however, inject a tiny measure of freedom into our increasingly regulated health care system.  No American should ever enjoy less freedom by virtue of living in the U.S., and no American should be forced to pay higher prices for drugs that are available more cheaply overseas.  The ban on reimportation is unconscionable, and most Americans know it despite the best efforts of the pharmaceutical companies and their mouthpieces.