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I was going to blog about the illogic of the proposed amendment to health care legislation allowing the importation of lower-priced drugs from Canada, but Ezra Klein of the Washington Post beat me to it. As he notes, referring to floor comments by Senator David Vitter (R-LA):
"The case for drug reimportation, as Vitter says, proceeds from the recognition that residents of other countries get much, much lower prices on drugs than Americans do. Many of these drugs were invented by American companies and produced in American factories. But Canada gets them at a discount. Why? Well, Canada's government bargains its prices down…. The results of this strategy are not in doubt: These countries pay far less than we do for the exact same drugs. Our solution? We will go to these countries and buy these drugs!"
As Klein goes on to say, this is an “odd solution.” That this issue was likely to come up in the U.S. healthcare reform debate was anticipated and discussed by Carsten Fink in a working paper for CGD last year. In addition to noting the illogic of the Canada “solution,” he also discusses how this might affect access to drugs in developing countries. That, along with the rest of paper discussing how intellectual property rules affect drug prices and access in poor countries, may be of interest to the development community.