NCPA - National Center for Policy Analysis


April 28, 2005

Thanks to Europe's version of drug importation, its biotech companies have no cash, their drug companies launch fewer new products than 10 years ago compared to America and biomedical research dollars have flowed to the United States, says Robert Goldberg, director of the Manhattan Institute's Center for Medical Progress.

Some of the European companies that moved here to escape price controls are already preparing to move again, to Asia, if Congress passes the Pharmaceutical Market Access and Drug Safety Act of 2005, says Goldberg. This bill forces companies to sell, make and import their products from Canada and elsewhere, where government sets prices and access to medicines.

People wonder why companies don't charge Canada and Europe more. Even when faced with data that different drugs provide important benefits to specific groups of patients, governments in Europe or Canada or Australia use rationing and the threat of not paying for the drug altogether to keep prices low, says Goldberg:

  • In Australia, one of the countries that Congress wants to import from, patients taking Gleevec have to sign a contract promising they will go off the drug when the government wants them to.
  • In England and Canada, some drugs that are standard therapy for treating Alzheimer's or lung cancer here are unavailable even after years of delay and price controls.

The coalition that has rallied around price controls likes to say, "A drug that is unaffordable is neither safe nor effective." But as the "European disease" has shown, price controls will not merely make medicines more "affordable." They will make them unavailable and undiscoverable, says Goldberg.

Meanwhile, India and China are eager for Congress to impose price controls on our biotech and drug firms. They think it would give them as a competitive advantage. India has 80 firms engaged in modern biotechnology, and investment in drug research has increased by 400 percent over the past five years.

Source: Robert Goldberg, "The European Disease," Washington Times, April 28, 2005.


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