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A Dose Of Reality.(ISSUES & INSIGHTS)(EDITORIALS)(Editorial)

Investor's Business Daily

| July 05, 2005 | COPYRIGHT 2005 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Drug Costs: The idea that Americans could save big money by importing price-controlled medicine was taken too seriously by people who should know better.

Canada last week sent a message to Congress, AARP, state and local governments and anyone else in the U.S. who wants its low-cost prescription drugs: Don't look to us for a free lunch.Canadian Health Minister Ujjal Dosanjh said his government will cap drug sales to the U.S. if necessary to ensure an adequate supply for Canada's own citizens.

In practical terms, this means the flow of cheap meds will be held at a level too low to benefit most American consumers. It also means that the online pharmacies leading the cross-border trade will have to look beyond Canada to find low-price drugs to meet American demand. Some are already doing that.

But in time they're likely to hit the same wall. No country that holds its drug prices at artificially low levels wants to become a cut-rate dispensary for the huge U.S. market.

Drug companies are neither blind nor stupid. If they see that a large share of their products sold in Israel, India or New Zealand are being resold in America, they'll stop this back-door price cutting as soon as they can.

Depending on the means the drug makers use -- quotas or higher prices -- consumers in those countries will either pay more or face shortages. To prevent that, governments will step in (as Canada is doing) and keep cross-border sales in check.

Americans face another kind of risk as the drug-import net gets cast more widely. Drugs sold directly to Canada and resold here are subject to Canadian regulations that are at least as tough as those in the U.S.

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