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Massachusetts city quits drug laundering

One of the very first pieces I ever wrote for Wizbang involved the idea of buying prescription drugs in Canada for use in the United States to take advantage of the price difference. At the time, I used the phrases "Socialism Lite" and "drug laundering" to describe the practice of buying drugs in Canada, where the prices are set by the government, and then brought into the United States, where the prices are more governed by market factors.

In Canada, the government sets the prices of most prescription drugs -- and many of them are not much above the actual costs to the manufacturer, and even some are below it.

In the United States, the pharmaceutical companies are not charities. They are actual for-profit corporations, and they have an obligation to their stockholders to make money.

Further, they have expenses to pay. Pharmaceutical research is a very expensive field, and I've heard that for each new drug that makes it to the market there are at least nine that turn out worthless.

But that last point is irrelevant. How they spend their money is pretty much their business.

In Canada and other countries where the prices are set by the government, they are benefiting from the research and development done here in the United States. In essence, the United States consumers are subsidizing those cheap drugs.

And when Americans buy those drugs and bring them home, they are increasing the burdens on the pharmaceutical companies. If it gets too bad, they might decide to simply stop selling certain drugs in those countries.

However, I know some people disagree with my laissez-faire, free-market attitude towards drugs. (Personal disclaimer: I am on about half a dozen prescriptions myself, and would not last too long without them.) They see no problem with government intervening and setting prices.

To them, I simply ask them to be honest. If they favor price controls, why not try to implement them here in the United States? Capitalism is not enshrined in the Constitution, and there are no bans to implementing socialism. Instead of "laundering" their drugs through Canada, gaining the benefits of socialism without having to pay the cost of it, why not just be upfront about it?

In Springfield, Massachusetts, they tried it for a while. But after three years, they've decided to dump their entire insurance plan and buy into the state's plan, sending the drug-laundering plan into the oblivion it so richly deserves.

I only wish it had been shut down by the government or people who were, like me, disgusted with the rank hypocrisy of the whole thing.

Comments (3)

I'm curious as to if the Ca... (Below threshold)

I'm curious as to if the Canadian government actually pays the difference if the companies have to sell for a loss in Canada. We're not only overburdening the pharmaceutical companies, we're also overburdening the Canadian taxpayer, riding off of their extremely high taxes (well high compared to us).

To tell you the truth of th... (Below threshold)

To tell you the truth of the mater, I live and am citizen of Canada. I don't care for the Socialist/fashists stuff. Though I have to say the price of drugs is not set by the government.

I think that the drugs pric... (Below threshold)

I think that the drugs prices cannot be establish by the government in any country. It could be subsidized but not be set at a fixed value. The price is established by the pharmaceutical company and depends on many factors such as research (the most expensive), production, marketing, etc. Fabrication technology has also an important role in the sale’s price.






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