"DRUGS! - GIMME MY DRUGS!"

The New York Times Editorial board are either liars or dumb. Maybe both. Today they had a little editorial on importing prescription drugs from Canada. They're not sure if it’s such a good idea, but:

“...it could provide a useful nudge to the industry to revise its global pricing policies to spread the burden more fairly. “

That sounds reasonable, right? I mean, if the drug companies have some huge, secret meeting where they say, “Let’s charge Canada $5.00, Mexico $3.00 and the suckers in the US $12.00. HAHAHAHAHAHAHA!!!”, that’s not fair, is it? Hillary warned us of those evil drug companies ten years ago!! She IS the most brilliant woman on the face of the earth!

This whole pricing scenario is common among the great unwashed and the editorial boards of the United States. It’s also not true, as even the Times pointed out in their little ditty:

“Imported drugs can be a great bargain because pharmaceutical manufacturers exact their highest prices from American consumers and sell the same products for much less in foreign markets, where prices are driven down by price controls or hard bargaining by governments”

Price controls. If something is sold in one place where the price is regulated and also in another where it isn’t, the unregulated place will subsidize the other. This happens everywhere there are subsidizes; just ask any landlord who suffers under rent control.

Let’s do a simple example: Let’s say Mulholland Pharmaceuticals has a allergy medicine that I need to sell for $8.00 a bottle. I sell 2,000 bottles in Canada and 4,000 in the United States. Together, that would be a total of 6,000 bottles and $48,000. Big Government in Canada says I can only charge $3.00 in Canada. So, I only make $6,000 in Canada where I need to make $16,000. In the United States, I would normally make $32,000 selling the 4,000 bottles at $8.00, but I need to make up that $10,000 I’m short from Canada, so I kick the price up to $10.50 in the US, so I’ll make the $42,000 I need to subsidize Canada.

It’s delicious irony that the people who are always clamoring for subsidies finally are on the subsidizing end. Well, it would be, if they understood a bit of it, but they don’t.