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Thread: Hypocrisy concerning the outsourcing of jobs from the U.S. to other countries.

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    Default Hypocrisy concerning the outsourcing of jobs from the U.S. to other countries.

    I heard an interesting comment yesterday. A rhetorical question, "If outsourcing manufacturing jobs to other countries is so good for Americans to buy cheaper plasma screen televisions, computers, etc., then why is it illegal for individual Americans to 'outsource' their purchase of cheaper prescription medications from Canada?"

    Other than the usual rampant hypocrisy from politicians on both sides of the aisle, I don't have a good answer, so why?

    PhaedrusZ

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    Featured Member discretedancer's Avatar
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    Default Re: Hypocrisy concerning the outsourcing of jobs from the U.S. to other countries.

    Some will claim that FDA is the difference...that no other country in the world (despite those with lower mortality rates and better cure rates than the US) could possibly be as good at choosing/approving drugs as the US....even though we usually are the LAST to approve a drug and the FIRST most expensive (and profitable) market.

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    Default Re: Hypocrisy concerning the outsourcing of jobs from the U.S. to other countries.

    It boils down to the unofficial fact that prescription drugs in the USA is basically a 'regulated' industry. Much like the electric power industry, many other cost components are factored into pricing of the final product. The unofficial 'regulation' of US prescription drug pricing covers not only the actual cost of drug manufacture, but the costs of R&D and testing of new drugs, the costs of awards/settlements etc. In comparison to the drug companies, consumer electronics companies face far lower R&D costs, zero clinical studies long term testing requirements of their products, and little potential for large awards/settlements against the consumer electronics companies for 'inflicting unintended bodily harm' against American TV viewers.

    In the final analysis, the reason that Canadian drugs are significantly cheaper than the same drugs produced in the USA is that Canadian drug pricing also does not include any significant R&D costs, and includes far less costs in the area of awards/settlements against Canadian drug companies which primarily produce time tested no longer proprietary "old" drugs.

    It would certainly be possible to implement the same scheme here in the USA and significantly lower the prices of prescription drugs. However, this would also require major changes in the way new drug R&D and clinical testing is funded (i.e. by direct tax money, or by indirect public support of gov't operated research / gov't funded university research) or result in a significant cutback in new drug company research. If your goal is cheaper pennicillin, then you could certainly achieve that. However, it would come at the possible loss of the development of new drugs, risking a day where there is no effective drug available to treat certain diseases. I assume that you noticed this was exactly the case during the SARS outbreak in Toronto two years ago, where the cheap Canadian pennicillin was useless and the only effective drugs against SARS had to be imported from the USA !

    Bottom line question #1 is whether or not you advocate expanding US taxation and gov't involvement/takeover of the R&D function and leaving the US drug companies role as simply drug producers a la the Canadian and other offshore drug companies, versus leaving those R&D functions to the drug companies in large part with associated higher prices for the prescription drugs sold to cover R&D funding, versus abandoning a lot of R&D.

    Bottom line question #2 is whether or not you advocate expanding US taxation and gov't involvement/takeover of medical costs stemming from bad drug reactions or unintended side effects as part of a future US socialized medicine system, versus leaving direct liability for such costs with the US drug companies, attorneys and juries.

    In both cases, Canada has chosen the expanded taxation and gov't involvement/takeover option. In fact, when officially approached about volume purchases of Canadian drugs by US states, the Canadian gov't freaked out when they calculated the taxation impact on their citizens of basically having to subsidize Canadian drug company cost elements of additional large quantities of drugs to be shipped outside of Canada.

    In actuality, Canada winds up importing the vast majority of its drugs from US drug companies ... at a gov't agreed price which does not include the R&D and testing cost components. The quantities of US made drugs sold in this manner is strictly limited. IMHO it would be entirely fair for the US Gov't to allow the reimportation of US made drugs shipped to Canada and back again, because if the Canadian gov't attempts to buy 10 times as much drugs the price they are charged will have to be readjusted to more 'realistic' levels. This will remove the 'hidden subsidy' that US drug purchasers are paying to support discounts for Canadians, and force Canadians to pay their fair share.


    "Canadian Pharmacy Group Warns Against Massive U.S. Importation

    February 6, 2004 - Proposals supporting drug reimportation from Canada, advanced by several of the candidates for the U.S. Democratic Presidential nomination, are ill-considered and dangerous, according to the Coalition for Manitoba Pharmacy. "Saying you support massive reimportation of prescription medicines is irresponsible and lazy policy," said Lothar Dueck, president of the Coalition. "These statements by the candidates pander to people eager for relief, by making false promises."

    The coalition says that some of the wide-scale re-importation proposals being put forward would put the Canadian healthcare system at risk. The Canadian system is not set up to supply medicines to the entire U.S. population which has ten times the population of Canada and drug manufacturers only ship to Canada sufficient supply to meet the needs of Canada's population.

    Prescription purchases from foreign sources, including Canada, have traditionally represented less than 1% of total drugs sales in the U.S however if massive scale re-importation became the norm there is no telling how high that percentage could become. The present practice allows individuals to puchase their own pharmaceuticals either by visiting the foreign country or by making their purchases on the internet. While this practice has proven to be sustainable such would likely not be the case if institutional massive-scale ordering were to become the norm.

    Michele Fontaine, vice president of the Coalition. said, "These simplistic proposals make no sense. If politicians sincerely want to help patients get access to medicines, why don't they sit down with the experts and do the hard work of figuring out a policy that has a chance of working safely?"
    Last edited by Melonie; 05-21-2005 at 08:44 AM.

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    Featured Member Destiny's Avatar
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    Default Re: Hypocrisy concerning the outsourcing of jobs from the U.S. to other countries.

    What a lot of people don't realize is that a lot of industries want to be regulated by the government. Why? It keeps out competition. As Melonie mentioned, all the research and development, testing and clinical trials the FDA require effectively give the existing drug companies a monopoly. They only have to fight for market share among themselves, they don't have to worry about any upstarts coming in.
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