Exporting drug prices.

• Author: Pilon, Roger
• Position: Letters - Letter to the editor

In "Exporting Drug Prices" (May), Jacob Sullum points to a real problem with proposals to lift the statutory ban on importing price-controlled Canadian drugs: Once the ban is lifted, drug companies may simply raise the prices of the drugs they sell in Canada, or limit supplies so as not to undermine their far larger and more profitable American market. Because all countries, save the U.S., negotiate low-price agreements with drug companies, Americans end up paying a vastly disproportionate share of the research and development costs for new drugs, while the rest of the world rides largely free. That arrangement persists only because the ban prohibits price-controlled drugs from flowing into the U.S.

Free marketers like myself have urged lifting the ban universally, or at least with regard to the developed world. Were that done, companies wishing...