| Import Your Own |
3 February 2003
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Prescriptions: Seniors Told to Buy Canadian
President Bush and the free-marketeers have a problem with the cost of health care in the US generally and with prescription medicines specifically. This was driven home by a recent TV ad that essentially told US old folks how to get their medications delivered right to their doors -- from Canada. It seems that Canada, a land of socialized medicine, can produce and deliver pills to aged Americans cheaper than their native land. That isn't how NAFTA was supposed to work.
Depending on the talking head arguing about them, high prescription prices are the result of excessive malpractice settlements, greedy drug companies, or an aging population reared on fat and calories hitting the golden years. Yet a more likely culprit might be the way drugs in the US are purchased, by individuals who have few choices.
Because of patents, some drugs are only available from one supplier, a de facto monopoly. When generics are available, prices drop because the power of the monopolist is broken. Now, there is a good argument for the legal monopoly; it rewards innovation. But if there can be a case for a single producer, surely a case for a single buyer exists.
When consumers band together to buy together, the clout they carry gets them better prices. Now, if there were a single buyer (a monopsonist) for pharmaceuticals in the US as there is in other developed countries, the leverage of a quarter of a billion consumers would slash prices. Unfortunately, that runs contrary to current administration ideology -- that is a pity because like many good prescriptions, it would work over-night.