Consumer Watchdog – US government's war on prescription drugs

Marketplace - Minnesota Public Radio

The following commentary by Jamie Court was broadcast on the Marketplace radio program on Tuesday, August 31, 2004 - Click here and scroll down the page to listen the the audio of the commentary.
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DAVID BROWN, anchor:  So far dire predictions that the streets of New York would turn into a reprise of Chicago '68 have proven unfounded. Commentator and consumer activist Jamie Court says that doesn't mean there's not a war to protest, but it's probably not the one you're thinking of.

JAMIE COURT: The US government is prosecuting a new war on drugs: prescription drugs. The
FDA is shutting down storefront pharmacies that import cheap drugs from Canada like they're crack houses. Customs is seizing cross-border shipments like they're produced by the Medellin cartel, not by US drug companies that sell to Canadian pharmacies at 30 to 60 percent off. You see, prescription drugs are less than half-price in Canada, France and England. These and most other developed nations are like Costco; they get the lowest price because they have the negotiating power to buy in bulk for every resident.

So in the age of free trade, why can't Americans buy their prescription drugs at the cheapest world prices? Big money, that's why. The fact is there is no bulk buying because drug manufacturers own the biggest cash register on Capitol Hill, and that mountain of cash comes from our overpriced American drugs. Bloated drug prices helped the industry give 900 grand to Bush, 350,000 to Kerry and tens of millions in soft money. No wonder neither Bush nor Kerry support turning the US into Costco for all Americans' drugs, even though Kerry likes bulk buys in Medicare.

The bigger the buyer, the cheaper the price--seems like a simple enough free-market principle for all Americans. But politicians say they fear drug companies will lose too much money and not develop new drugs. The truth is only 15 cents of every dollar Americans pay for prescription drugs goes for research and development. The lion's share is profit and marketing. A US-run, bulk-purchasing pool open to all 300 million Americans will negotiate better prices than Costco. That's how to win the war on drugs at home with the free market as an ally, not by threatening to put Grandma in jail for buying the same drugs half off in Canada.

In Los Angeles, this is Jamie Court for MARKETPLACE.

BROWN: Consumer activist Jamie Court is author of "Corporateering."
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