Eakinomics: Some Not-Terribly-Surprising News on Reimportation

Eakinomics: Some Not-Terribly-Surprising News on Reimportation The Hill is reporting that “‘It is important to recognize that Canada’s market for pharmaceuticals is too small to have any real impact on U.S. drug prices,’ Canada’s acting Ambassador to the U.S. Kirsten Hillman said in a statement following her meeting earlier this month with Joe Grogan, Trump’s domestic policy chief. ‘Canada’s priority is to ensure a steady and solid supply of medications at affordable prices for Canadians,’ she added.” I hate to say I told you so, but in the April 26 Eakinomics, I noted “Florida is also large enough (27 million people) that it runs right into the fundamental inconsistency in the reimportation argument. Why would Canada, after negotiating lower-cost prescription drugs for its 31 million citizens, give them up for Floridians to have them? It will not subject its citizens to higher prices or rationing.” Despite this, the president recently tweeted “.@SecAzar and I will soon release a plan to let Florida and other States import prescription drugs that are MUCH CHEAPER than what we have now! Hard-working Americans don’t deserve to pay such high prices for the drugs they need.” The Hill reports that “Florida, Colorado, Vermont and Maine are in the process of drafting such proposals.” Where does this leave the future of policy toward drug prices? Reimportation is a non-starter, the Pelosi drug bill (price-fixing plus extortion) is a death blow toward innovation, and the legislative process in the Senate is at a standstill. So, despite the fact that there are some sensible policies to improve drug-pricing incentives, there is not much optimism for actual reforms. Instead, these proposals – especially reimportation – are more popular than effective. In the run-up to the 2020 election, the politics of drug reform explains their presence in the debate. That is also some not-terribly-surprising news.