Ron Paul's Texas Straight Talk - A weekly Column

October 9, 2000

Drug Re-Importation Will Lower Prescription Drug Costs
Free-Market Approach Benefits American Consumers

This week, members of a joint House and Senate committee reached an agreement on proposed legislation which would allow the re-importation of prescription drugs into the U.S. The proposal, part of a fiscal year 2000 appropriations bill scheduled for a House vote next week, faces some opposition from both Congress and the administration. However, I believe widespread public concern over the high cost of prescription drugs will convince lawmakers and the President to support this needed reform.
Many widely used drugs made by American companies sell for far less in Europe, Canada, and Mexico. Undoubtedly you have seen news reports featuring seniors taking bus trips across the Mexican or Canadian borders to buy their needed drugs. As a physician and member of Congress, this greatly disturbs me. U.S. citizens never should be forced to leave their own country simply to obtain affordable prescription drugs.
Drug re-importation legislation will help reverse this unfortunate situation. The proposed measure allows U.S. citizens, pharmacies, and drug wholesalers to re-import prescription drugs manufactured in the U.S. This legislation is badly needed to allow our citizens to benefit from worldwide price competition. Clearly, when we permit Americans to import drugs, the result is increased competition and lower drug prices.
Legislation I introduced earlier this year would go farther in creating beneficial price competition for pharmaceuticals. The "Pharmaceutical Freedom Act" (H.R. 3636) eliminates needless FDA regulations which prevent Americans from buying low-cost drugs from foreign and Internet pharmacies. The Act also provides seniors with a tax credit of up to 80% of their prescription drug expenditures. My approach applies free-market principles to the problem: drugs become more affordable when we encourage price competition and provide tax relief to offset drug expenses. The free-market approach lets you and your doctor choose the prescription drugs that are appropriate for you.
Unfortunately, many prescription drug proposals coming out of Washington take a different approach and put drug decisions in the hands of federal bureaucrats. We are told that massive new federal expenditures are the answer to the drug cost problem. More taxes must be sent to all-knowing federal health bureaucrats, who will decide what drugs you need. Of course, proponents of the governmental approach wonít tell you that they want to lower drug costs through price-fixing schemes (which inevitably lead to the rationing of drugs) or through subsidies to insurance and pharmaceutical companies (which stifle price competition). Furthermore, bureaucrats wonít admit that the current regulatory regime is a major cause of high drug prices. They just want to expand it and limit your choices in the process.
The administrationís plan would grant the FDA new investigative powers to monitor online drug sales. The administration also wants to impose massive penalties on non-complying online pharmacies and increase the FDA budget for the hiring of more online snoops. As usual, the governmentís approach to the problem is more government; in this case increased FDA regulations to bring all online pharmacies under federal control (even those which comply with existing state laws). Of course, contrary to conventional wisdom, the FDA is not an independent agency working to "protect" you. Instead, government regulators have worked hand-in-glove with powerful pharmaceutical industry interests for more than a century. Is it any wonder that the FDA and its lobbyist-influenced regulations have done nothing but drive up the price of prescription drugs?
The proposed crackdown on online pharmacies simply serves the existing entrenched pharmaceutical interests at the expense of price competition. As a result, you and I end up paying more for our prescriptions. However, the re-importation agreement reached this week encourages me that others in Congress are beginning to favor the free-market approach. Undoubtedly many are responding to polls showing that a large majority of Americans support drug re-importation. I applaud my colleagues who support the measure, and I plan to use this momentum to seek passage of the "Pharmaceutical Freedom Act." Congress must allow all Americans to benefit from worldwide price competition for prescription drugs.