Senate Rejects Two Proposals To Allow Importation of Low-Cost Drugs

The United States Senate yielded again to demands from the powerful pharmaceutical lobby and killed two separate proposals that would have allowed citizens to obtain cheaper drugs in the United States. Both the White House and Congress have been killing such proposals despite the fact that soaring drug costs are crippling many families. The vote was 51-48 on the first bill by Sen. Byron Dorgan (with 25 sponsors).

Early in the health care debate, the Obama Administration yielded to lobbyists to strip out such proposals from the national health care bill. To his credit, John McCain also supported the McCain bill.

Previously, Democratic Sen. Thomas R. Carper of Delaware blocked a vote on the Dorgan bill and the White House argued the industry line that such legislation could allow unsafe drugs into the market. They continue to maintain this position despite safeguards put into the bill by Dorgan.

Critics have charged that the objections are merely a smoke screen to protect a deal between the Obama Administration and the drug lobby to support the health care bill and fund $80 billion worth of health care reform.

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10 thoughts on “Senate Rejects Two Proposals To Allow Importation of Low-Cost Drugs”

  1. Puzzling.

    Much of the research that results in profitable drugs made by private companies is actually government sponsored.

    One really requires oversight on how drug companies spend money. One suspects that the may use accounting tricks to shift costs from propaganda and advertising budgets to the research budget. One really needs to monitor how much the true cost of production is. Drug patents cover the chemical compound, not the method of synthesizing it. Let us suppose that another supplier found a cheaper means of synthesis, this would not put any downward pressure on prices as the other supplier would have to buy the right to manufacture it and pay what the patent holder asks.

    There needs to be some restriction on the prices charged for patented medicines so that they cover a reasonable profit and the costs of research including that for research on other medicines that do not pay off, but do not allow what the market will bear profiteering.

  2. Mike Appleton.

    “What is particularly annoying is that this country will ultimately adopt a single payer system for the simple reason that it makes the most sense.”

    Your mistake is to assume that your government takes account of the interests of the non-elite citizens, it does not! Don’t hold your breath waiting for universal single payer health care, that would be against the interests of hospitals, doctors, insurance and drug companies and these interests have more influence on government that the 99% of citizens who are not part of the kleparchic elite.

  3. Mike S.

    I did not realize you had been ill. Best wishes as I would miss your comments.

    You could consider migrating to Australia. The only reason that my wife received decent treatment for her cancer was that in Australia we have universal coverage via Medicare which is mandatory and for which one pays an income related levy.

  4. Puzzling.

    This is another case of regulatory capture and capture of the government overseeing the regulatory agencies.

    The market in health services is an instance of a market that can never be a free market because of information asymmetry. The consumers of health services lack the knowledge of medicine and drugs that medical professionals and drug companies have to work out whether the the treatment is necessary and whether its cost is reasonable.

    Also because life saving/prolonging medicine is considered to be an unquestionable good it is very difficult to argue against cost increases. I think there is a good argument for making health insurance illegal, with mandatory life imprisonment the penalty for buying it or selling it. If people were confronted with the full costs of medicine when they become ill, the limit on their ability to pay would put downward pressure on costs. When people pay monthly lesser amounts up front the pain is not enough to cause them to react in a way that influences the market downward.

    The only way to control health costs is to establish via government a single payer system, in effect a consumer cartel. However it is also necessary to prevent private industry offering extras insurance to supplement the basic services. Allowing private enterprise to manage health insurance is a sure fire recipe for allowing costs to blow out.

    Australia has a mixed system, the universal coverage Medicare system and the option for people who can afford it to take out private medical extras insurance that allows the by paying more to jump the queue for procedures where their is a waiting list. Their is a constant fight between the conservative parties and the Labour party. Every time the conservatives are in government they try to destroy Medicare by making private extras insurance a practical ecessity. Every time the Labour party is in government it rolls the private system back a bit.

    There is a fundamental problem with private for profit health insurance. Health insurance is not like normal insurance. In normal insurance the contract terminates on payment for death or destruction of the insured asset and that does not matter as it is no longer needed. But the worst thing that can happen relating to health is to suffer an accident or acquire a chronic disease which necessitate frequent treatment or long term hospitalization. But health insurance has a cap on total payouts (in the US) and there is no requirement that insurers continue to provide cover once clients become expensive. People think that in paying for insurance they are paying fr the right to continue to but cover after their health takes a nose dive, but this is not the case. Insurance companies regularly eject unprofitable clients.

  5. Mike S., I hear you. I am 63 and my wife is 55. I have a Florida bar endorsed plan with what passes for a reputable company in the industry, yet our health insurance for two people is almost $1,250.00 per month, with a $3,800.00 deductible. I received a notice last week informing me that the premium will increase another $200.00 per month effective July 1st. Now I’m hoping that I can just hold out until Medicare kicks in. What is particularly annoying is that this country will ultimately adopt a single payer system for the simple reason that it makes the most sense. In the meantime, however, Americans will have to stumble and lurch toward that goal while dragging along the ignorant, the recalcitrant and the lobbyists.

    Glad to see you posting again and hope you’re feeling better.

  6. As someone whose very life depends on medications I’m finding that even Medicare and my “Cadillac” health plan make some vital drugs more than I can afford. Forget political rhetoric and economic theory, we need a single payer system and I know this because I am one of the people with good health care and even I finding myself triaging vital medicines.

  7. Trying to import foreign price controls with drug prices will work only briefly. That said, I am not in favor of government restrictions on consumer purchases (for drugs or anything else) simply because they are from foreign sources.

    The bulk of drug research and development is done in the United States, and US consumers are the ones subsidizing the rest of the world by paying market prices for these drugs. We alone create the profit incentive. If the entire world forces the drug companies to act like utilities, innovation will simply end.

    It is more likely that drug companies would end some exportation and aggressively try to raise foreign prices if this legislation passes.

  8. Find out how your senator voted and if you disagree, vote him/her out of office.

  9. This makes me wonder about all of these fine Pharmaceutical company’s dumping drug into other countrys. It has been documented on many occasions that some manufactures whose drugs did not pass the minimum standards for distribution in the US sold these same products in other countrys.

    I can see why, they have a vested interest in assuring that these same products do not make it into the market again. It is my understanding although a lot of drugs may be generic it is possible to trace them back to the company of origin.

    Then again, they get to charge whatever the heck they want to for them. Each pharmacy is engaged in Free Markets. One can charge 13.96 where as another will charged 49.90 for the same drug. Why upset the market, when Canada controls costs……

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