First, a little backstory.
The Canadian government has very strict price controls on prescription drugs. Canadian citizens are rather proud of this, since they claim that it shows that evil greedy uncaring corperations can’t reap undeserved profits while callously allowing people to die simply because they can’t help the bottom line.
This is a matter of pride in Canada. The idea is that they’ve proven that they’re caring and compassionate while being efficient and fiscally responsible.
US pharms sell to Canada because they do get some profit and it’s a big market, even though they claim that they’re not realizing a fair return for the product.
Now consumers and government agencies here in the US are getting into the act. They’re ordering drugs over the Internet from Canadian firms to realize significant savings.
US pharmas are calling foul. They say it costs an enormous amount to develop new drugs, and the high prices they charge are just an attempt to earn a fair return on their investment before the patents expire.
So which view is the correct one? Who has the closer line on the truth?
This report by the Frasier Institute goes a long way towards debunking claims that the Canadian system is more efficient. (Hat tip to Innocents Abroad.) According to the report, Canada provides one of the worst level of care amongst other countries with universal health care, and at significantly higher cost.
Thomas Sowell has an op-ed that’s pretty interesting. (Hat tip to No Watermelons Allowed.) Sowell points out the enormous costs that is required when developing any medical resource, from drugs to your family doctor. He also says that one of the really big expenses that many people ignore are various liability concerns, either lawsuits themselves or insurance to protect from same. Canadian pharmas don’t develop their own products so they dodge this bullet.