Wednesday, November 17, 2004
Distorted markets and distorted expectations
[Randy Meents, "Hazards of imported medicines," The Kansas City Star, 15 November 2004.]
Missouri Pharmacy Association president Randy Meents argues in this column that allowing importation may introduce unsafe drugs into the U.S.:
Importing drugs from other countries is a violation of the Food, Drug and Cosmetic Act. It is potentially dangerous to bring drugs from foreign sources, bypassing our country's closed medication distribution system.
The U.S. drug distribution system was not designed to facilitate prescription drug importation. The system was designed to keep unapproved and potentially unsafe medications from entering the U.S. drug supply. Intentionally circumventing this system creates an opportunity for mislabeled, mishandled, subpotent, or counterfeit drugs to make their way into the hands of patients.
He may very well be correct, but the problem here is misidentified. By establishing itself as the arbiter of safety and sealing the borders, the FDA has inserted itself into an otherwise market-driven process.
Why is it that Americans can purchase any number of products from overseas without the fear of harm, but for prescription drugs this is unacceptable? It can't be because they are a health product - every device in U.S. hospitals is certainly not manufactured here.
The problem is that the FDA's improper role in the market has created an inappropriate expectation of safety (and one that does not always hold true). As a result, the market fails to operate along traditional lines - where consumers make decisions based on a host of factors including price, quality, reputation, etc. (the doctor-patient relationship and third-party payment factors in here as well, but there is an independent regulatory effect).
The unintended side-effect of this intrusion is that overseas producers, rather than having to establish an market position as under normal circumstances, can take advantage of the presumed safety of pharmaceuticals.
The traditional response to government-created difficulties is additional government intrusion. This necessitates still further intervention, etc., etc. This need not be the case. If policymakers are willing to address the fundamental problem in the system - the FDA's over-intrusive role in drug development and approval - then we can restore a true marketplace to the drug industry and safely open the borders to overseas competition.
[Randy Meents, "Hazards of imported medicines," The Kansas City Star, 15 November 2004.]
Missouri Pharmacy Association president Randy Meents argues in this column that allowing importation may introduce unsafe drugs into the U.S.:
Importing drugs from other countries is a violation of the Food, Drug and Cosmetic Act. It is potentially dangerous to bring drugs from foreign sources, bypassing our country's closed medication distribution system.
The U.S. drug distribution system was not designed to facilitate prescription drug importation. The system was designed to keep unapproved and potentially unsafe medications from entering the U.S. drug supply. Intentionally circumventing this system creates an opportunity for mislabeled, mishandled, subpotent, or counterfeit drugs to make their way into the hands of patients.
He may very well be correct, but the problem here is misidentified. By establishing itself as the arbiter of safety and sealing the borders, the FDA has inserted itself into an otherwise market-driven process.
Why is it that Americans can purchase any number of products from overseas without the fear of harm, but for prescription drugs this is unacceptable? It can't be because they are a health product - every device in U.S. hospitals is certainly not manufactured here.
The problem is that the FDA's improper role in the market has created an inappropriate expectation of safety (and one that does not always hold true). As a result, the market fails to operate along traditional lines - where consumers make decisions based on a host of factors including price, quality, reputation, etc. (the doctor-patient relationship and third-party payment factors in here as well, but there is an independent regulatory effect).
The unintended side-effect of this intrusion is that overseas producers, rather than having to establish an market position as under normal circumstances, can take advantage of the presumed safety of pharmaceuticals.
The traditional response to government-created difficulties is additional government intrusion. This necessitates still further intervention, etc., etc. This need not be the case. If policymakers are willing to address the fundamental problem in the system - the FDA's over-intrusive role in drug development and approval - then we can restore a true marketplace to the drug industry and safely open the borders to overseas competition.
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