Friday, February 04, 2005
Drug reimportation debate
The discussion of drug reimportation from a free-market perspective is still lively. Division of Labour recently posted this interesting exchange between economists Robert Lawson and Roger Pilon:
Roger Pilon of the Cato Institute, whose views I respect most highly, wrote me to suggest I rethink the drug reimportation issue. The guts of the exchange are pasted below. I have to admit he's got me on first principles. But I'm not sure I can live up to my first principles in this instance.
Roger wrote:
I was sorry to come across your OCPA "Perspective" on drug reimportation, which takes a quite different view [from mine]. Here is the link to testimony I gave in the Senate last week, which has links to an October WSJ piece of mine on the subject and to a much larger study Cato published last August.
I wrote:
Thanks, Roger. I really thought I was being broadly consistent in terms of the overall analysis, if not the policy result, with what I had read of yours on this issue in the past. I favorably cited your work on this on my blog once in fact. I will read your stuff carefully and reconsider my position to be sure.
Mainly, I wanted to argue that drug companies are right to want to stop drug reimportation because it prevents them from practicing the price discrimination they want to practice. Allowing for enforceable no-resale clauses would be my first best solution. At least this is what I wanted to say.
Roger wrote:
"Broadly," yes -- so broad, in fact, as to leave the impression that conservatives should be on the drug companies' side of the reimportation debate, when in truth the issue is far more complex than that. I too support no-resale contracts, but not the enforcement mechanism of a statutory ban. And that's the "subsidy" that leads to the political problem the companies now have.
[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]
The discussion of drug reimportation from a free-market perspective is still lively. Division of Labour recently posted this interesting exchange between economists Robert Lawson and Roger Pilon:
Roger Pilon of the Cato Institute, whose views I respect most highly, wrote me to suggest I rethink the drug reimportation issue. The guts of the exchange are pasted below. I have to admit he's got me on first principles. But I'm not sure I can live up to my first principles in this instance.
Roger wrote:
I was sorry to come across your OCPA "Perspective" on drug reimportation, which takes a quite different view [from mine]. Here is the link to testimony I gave in the Senate last week, which has links to an October WSJ piece of mine on the subject and to a much larger study Cato published last August.
I wrote:
Thanks, Roger. I really thought I was being broadly consistent in terms of the overall analysis, if not the policy result, with what I had read of yours on this issue in the past. I favorably cited your work on this on my blog once in fact. I will read your stuff carefully and reconsider my position to be sure.
Mainly, I wanted to argue that drug companies are right to want to stop drug reimportation because it prevents them from practicing the price discrimination they want to practice. Allowing for enforceable no-resale clauses would be my first best solution. At least this is what I wanted to say.
Roger wrote:
"Broadly," yes -- so broad, in fact, as to leave the impression that conservatives should be on the drug companies' side of the reimportation debate, when in truth the issue is far more complex than that. I too support no-resale contracts, but not the enforcement mechanism of a statutory ban. And that's the "subsidy" that leads to the political problem the companies now have.
[Matthew Hisrich, "Sebelius Is Practicing Black-Market Politics," The Wichita Eagle, 10 December 2004.]
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