Regular readers know what fans we have been of Minnesota’s governor, Tim Pawlenty. Pawlenty is a highly skilled politician and, until recently, has been solidly conservative on pretty much all significant issues. Pawlenty ran for election in 2002 on a no-new-taxes pledge, and balanced the state’s budget without increasing taxes in the face of powerful opposition from Democrats and other entrenched interests.
Pawlenty is also a very bright guy with a good grasp of economics. It is therefore hard to explain why he has enthusiastically embraced the disgraceful idea of promoting the reimportation of price-controlled Canadian drugs. The Minneapolis Star Tribune reports:
“After a day with Canadian officials and some of Canada’s largest pharmaceutical distributors, Gov. Tim Pawlenty pronounced himself satisfied with the safety of Canada’s system and said ‘we’re moving full-steam ahead’ on plans to provide Minnesotans with safe, low-cost Canadian drugs.
“By year’s end, Pawlenty said, he plans to start a Web site featuring state-approved Canadian pharmacies with which Minnesota has negotiated competitive prices and delivery times. Ideally, he said, Minnesota will be joined by other Upper Midwest states in a compact that could further cut prices, producing savings of 30 and 40 percent in some instances.”
“The U.S. Food and Drug Administration adamantly opposes reimportation, saying it would leave Americans vulnerable to counterfeit drugs, unsafe conditions and standards far below those of the United States.
“On Wednesday, Pawlenty called those assertions ‘fear-mongering hogwash,’ saying the obvious influence exerted by the U.S. pharmaceutical industry to prevent Americans from taking advantage of low prices in other countries was ‘reprehensible.’
“Pawlenty said he is mindful of the federal ban on drug reimportation but determined nonetheless. The governor said he wants Minnesota to ‘show leadership’ in rewriting the rules. ‘If [federal officials] sue us, they sue us,’ he said.”
What is really reprehensible is stealing money from the pharmaceutical companies, and depressing the development of future life-saving drugs, through price controls. If there is a single fact about economics that history has conclusively proven, it is that price controls are a horrible idea. If the profitability of the pharmaceutical industry is destroyed through price controls, no one will ever be able to identify the people who suffer and die needlessly. But the numbers of such victims of price controls will be incalculable.
The other unfortunate aspect of this story, of course, is that the anti-importation forces have done a terrible job of explaining the devastating impact of price controls and the importance of protecting the drug companies’ intellectual property. For the most part, they have relied instead on the lame theory that Canadian drugs are unsafe. This is another illustration of the fact that principles have to be argued and defended; recourse to arguments of expediency seldom works in the long run.
Last year, I was one of Tim’s staunchest boosters as well as a substantial financial contributor to his campaign. On this site and elsewhere I have advocated him as a possible Presidential nominee in 2008 or thereafter. In view of what I consider his demagogic and unprincipled advocacy of pharmaceutical price controls, it is questionable whether I will even be able to support his re-election in 2006.
BIG TRUNK adds: Don’t miss this lucid op-ed column by our favorite Minnesota legislator, State Rep. Eric Lipman, from Tuesday’s Star Tribune: “Four questions to ask before importing drugs from Canada.”
A READER demurs: Reader Stan Brown asks Deacon (who doesn’t yet understand the issue very well) to “tell your co-bloggers not to be too hard on Pawlenty. Allowing drugs back in from Canada will not end up hurting US pharma companies. It will simply end Canada’s ability to benefit from price discrimination. The Canadians will be forced to pay market prices because the drug companies will not agree to undercut themselves at home. The losers here will end up being Canadians because their govt will not be able to secure lower prices for these drugs. When the prices equalize, the issue will go away.”
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