“This is not good,” by Steve Sibson, Sibby Online, http://sibbyonline.blogs.com/sibbyonline/2005/week4/index.html#a0003360467, 26 January 2005.
I just relayed Mr. Sibson’s views on abortion and added him to the blog-roll, but I disagree with him here
Looks like John Thune is joining in with the Democrats on Canadian drugs:
Today, Senators DeMint, David Vitter of Louisiana, Ken Salazar of Colorado and John Thune of South Dakota joined Representatives Gutknecht, Rahm Emanuel of Illinois, Anne Northup of Kentucky and Sherrod Brown of Ohio to roll out drug-import legislation. Vitter, DeMint, Thune, Gutknecht and Northup are Republicans.
Number one, the Democrats wonâ€™t give him credit for changing his mind on this issue as that give him crap for changing his mind on private accounts for Social Security. Lets not forget the Democrats charging Thune with being a lobbyist for drug companies. Lets see if David Kranz has enough political acumen and objectivity to point that out.
Number two, this ploy of bringing back drugs from Canada will not lower the cost of drugs in the US. It will raise drug costs in Canada, or the Canadians will do what they normally do within their socialized medical system to control costsâ€¦ration what is sent back to America.
I disagree with Steve on both points. Thune doesn’t care if Democrats give him credit for this move. It is made out of pricipal.
Second, this is a classic case of arbitrage. The U.S. drug market is much freer than the Canadian drug market. Canadians act as a free rider, allowing us to subsidize drug research and thus their drug use, and the pharmaceutical companies enable this. Canada would not be warping their market if the drug companies did not let them by agreeing to go along with these extortionary prices. The drug companies should not be protected from the consequences of their actions.
With cross border trade, the average U.S. price decreases as some American substitute Canadian drugs for American drugs. This is the natural price drug companies have to pay for agreeing to subsidize Canadian socialism. What will happen next? Some combination of
1. Canada rations their drugs even more, making their system even worse
2. Drug companies force Canada to accept higher prices
3. Drug companies stop selling to Canada
I’m fine with either of these consequences. The federal government should not be in the habit of enacting trade barriers to protect Canadian socialism. And U.S. companies should not expect federal relief when they agree to help socialism in a foreign land.
I could understand if this is about governments not interfering with free trade. Then we should also be against banning imports of Canadian beef.
It is about free trade. And we should also be against banning import of Canadian beef. But for now, I’m willing to take half a loaf instead of no bread at all.
Additionally, I have to wonder if Republican opposition to free trade in (prescription) drugs is collapsing. Thune was just named deputy whip. Either Thune just stabbed the party in the back, or it’s no big deal. Let’s hope it is the latter.