The pharmaceutical industry is using a variety of tactics to stem the flow of lower priced drugs from Canada and elsewhere into the US. The industry has devised and deployed some clever tools, including PR campaigns designed to scare the public into avoiding foreign drugs and restricting supplies to countries and companies that export too much. It’s tough to make these tactics work well in practice, because the economic incentives for reimportation are too great.
But pharma is also going after the root cause of the problem, which is the tendency of foreign governments to regulate the price of drugs. According to the Center for Public Integrity, the pharmaceutical trade association PhRMA has had more reportable contacts in the past few years with the Office of the US Trade Representative, which negotiates foreign trade agreements, than it has with the FDA.
PhRMA’s efforts are starting to pay off, with the recently announced Central American Free Trade Agreement (CAFTA) largely incorporating the pharmaceutical industry’s agenda. But as PhRMA has seen elsewhere, these sorts of efforts often inspire a strong backlash.July 7, 2005