NCPA - National Center for Policy Analysis

Reimporting Drugs Could Be Costly

September 29, 2000

There would be little benefit for U.S. patients from proposed legislation to allow the reimportation of prescription drugs manufactured or sold abroad by U.S. companies, says Robert Goldberg. However, there are a number of costs.

  • U.S. prices for prescription drugs are often substantially higher than prices for the same drugs in other countries.
  • However, American physicians and patients have better access to innovative treatments, and the U.S. has become the world leader in biotechnology -- developing 45 percent of all new drugs marketed worldwide in the 1990s.
  • In almost every other industrialized country, access to the most effective new drugs are limited by drug price controls and other government restrictions.

Attempts to establish the same prices for drugs in the United States and abroad will reduce access to important new medications both here and abroad.

  • Nearly one-third of the biotech products sold in the United States today are unavailable in Canada because government price controls make them unprofitable to sell there.
  • France has some of the lowest drug prices in Europe -- but one of the worst records in developing competitive, innovative products.
  • After a series of drug price restrictions in Britain, which had three of the 10 best-selling new products worldwide in 1988, that country today has none.

Furthermore, it is far from certain that consumers would realize any savings. In Britain, for example, cheap drugs bought in other countries are passed on to pharmacies, which are reimbursed by the National Health Service at the agreed national price -- often more than double the import cost.

Source: Robert Goldberg (NCPA senior fellow), "Reimporting Prescription Drugs," Brief Analysis No. 342, September 29, 2000, National Center for Policy Analysis.

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