Stefan at Oh, That Liberal Media is not impressed.
Unfortunately, importing drugs from Canada is not a long-term solution. Drug companies sell their wares for less in Canada only with the understanding that Canada is a relatively small market. Once enough Americans start buying their drugs up north, drug manufacturers will reduce the Canadian supply and the Canadian government will ban the export of Canadian drugs. Likewise, price caps in this country would only lead to shortages, a black market and less research and development of new drugs.There is a bit more to this story. Presumably Canada's health authority negotiates prices for drugs at the avoidable cost of producing them, letting others, primarily U.S. insurers, bear all the common costs of research and development. (Or do Canadian taxpayers bear some of those costs through Canada Council grants?) United States patients presumably could get drugs for 30% cheaper if they agreed to freeze further development of drugs. (Who wants all that controversy over animal testing and double-blind studies, anyway?)
A more effective solution to reduce the city's exposure to escalating health care expenses would be to raise deductibles and encourage the city workers to impose their own price caps by making more choices about their own spending.
Mr Sharkansky correctly uses the term "expenses" rather than "costs." There is a difference. Think about all the expensive drugs available today that were not available at any price a few years ago. That is a price reduction reflecting a cost reduction (from undefined, effectively infinite, to finite albeit more expensive than a Metra monthly pass.) Think also about the improved performance of the newer drugs. By analogy, a Boeing 747 is more expensive than the Wright Flyer. But a seat on the Wright Flyer is not available, at any price, even to the pilot, let alone a seat with recorded music available (eavesdropping on the air traffic control on some carriers) and a bag of peanuts or a cup of coffee delivered to that seat.
