Why Stop at Reimporting Canadian Drugs? Come Clean and Reimport the Whole System

I was a bit surprised to see a number of otherwise sensible people, including Glenn Reynolds, come out in support of a bill that would make it legal for Americans to buy prescription drugs from Canadian pharamacies where some medicines (though not all) are cheaper than in the United States.

Canada has lower drug prices for two reasons — a) Canada’s drug approval agencies typically take 18 to 24 months longer to approve drugs than in the United States and Canada often refuses to approve drugs that work great but are deemed too expensive and b) Canada, like most industrialized nations, imposes price controls on drugs. The government tells a pharmaceutical companies point blank how much it can charge for medicine.

So some Americans buy medicine from Canadian pharamcies becauses it is cheaper, just as some Canadians come to the United States to purchase medications that aren’t on the Canadian formulary.

I don’t really want to debate which system is preferable, but I don’t think it is too much to ask for a little consistency. If Canadian price controls are really such a great idea, Reynolds and other supporters of reimportation should take the next logical step and advocate for reimporting Canada’s entire regulatory system of drug price controls.

If it’s okay for the Canadian government to tell a company it can’t charge more than $2 per pill and it’s okay for American consumers to then reimport those drugs at $2 per pill, then why not cut out the middleman and have the American government tell drug companies they can only charge $2 per pill?

If price controls are Reynold’s idea of “promoting competition,” why not promote a little competiton stateside?


Instapundit. Glenn Reynolds, July 18, 2002.

And You Thought HMOs Were Heartless

The British National Health Service recently announced and odd treatment schedule for patients suffering from age-related macular degeneration, which is the leading cause of blindness in developed countries.

The NHS has decided that it will only approve treatment for macular degeneration once the disease is present in both eyes, and then it will only treat the eye that has been damaged the least with no treatment being recommended for the other eye.

Treatment for macular degeneration is widely available in the United States, Canada and most European countries, but apparently the British health system balks at the cost.


Outrage over blindness guidelines. The BBC, June 13, 2002.

More on the Counterproductive Nature of Sugar Tariffs

Back in February I mentioned that high tariffs on sugar had caused Kraft to announce that it would close the LifeSavers plant nearby and move it to Canada. The Christian Science Monitor has an article that points out this is an industry wide phenomenon in the hard candy industry.

According to the Monitor, high sugar prices are driving many hard candy manufacturers out of the United States. Brach’s Confections, which employs 1,100 people in the Chicago area, has announced that it will close down that factory by 2004. It will contract that work to Mexico or Argentina.

A George candy maker, Bobs Candies Inc., has moved its 40 percent of its candy cane operations to Mexico to avoid the high tariffs on sugar. Hershey Foods Corp. is closing its Colorado factory that produces the excellent Jolly Rancher hard candies, but will not say yet where production will be relocated.

Greg McCormack, president of Bobs Candies, tells the Monitor,

I don’t know whether there will be a domestic hard-candy industry in 10 years’ time. . . . You’re going to see tens of thousands of jobs leave this country — jobs that paid $10 to 20 an hour.

Unions and others say that it is the labor costs — not the high price of sugar — that is driving candy manufacturers across the border, but the reality is there are enormous savings to be had by avoiding the tariff. McCormack, for example, expects that his company will save $2 million annually just from cheaper sugar costs.


Bitter reality: Candy less likely to be ‘Made in US’. Laurent Belsie, The Christian Science Monitor, April 8, 2002.

Farm Subsidies, Tariffs and Lifesavers

TechCentralStation.Com’s Ryan H. Sanger takes down George W. Bush for his recent statements linking farm subsidies, of all things, to the 9/11 terrorists attacks.

Sanger reports that at the National Cattlemen’s Beef Association meeting in Denver, Bush told the cattlemen that, “It’s in our national security interests that we be able to feed ourselves . . . This nation has got to eat.”
As Sanger notes, given the relatively high levels of obesity in the United States, no one seems in danger of going hungry anytime soon. The truly bizarre thing about U.S. agricultural policy, however, is that it encourages low prices for some commodities while encouraging high prices for others.

On the artificially low price side, Sanger correctly notes that the problem with farm subsidies is that they create an excess of supply which makes farming unprofitable — at which point farmers turn into beggars at the government trough demanding one handout after another.

But the other side of the coin is that the United States uses tariffs and other devices to artificially raise the price of some agricultural commodities. A prime example of this is sugar — tariffs on sugar imports are set at such a high level that sugar in the United States costs up to twice as much as it does elsewhere.

The people who make Lifesavers understand that reality. Until a few months ago the major North American plant producing Lifesavers was located in Holland, Michigan — just a couple hours from where I live. But the high sugar costs in the United States finally took their toll, and the company announced it would close the plant and move to Canada where sugar producers don’t have the same influence. Sugar costs about half as much as it does in the United States, even after the exchange rate is accounted for.

Ah yes, thank goodness those tariffs are there protecting American jobs.


Beast of burden. Ryan H. Sager, TechCentralStation.Com, February 20, 2002.

Clever Conman in Canada

This story has flown under the radar of the mainstream news in the United States, but a U.S. citizen in custody in Canada claims to be a U.S. Naval intelligence offer who had foreknowledge of the September 11 terrorist attacks. The stories about this man claim that sometime in August he put his warning about a terrorist attack in writing in a sealed court document.

It turns out, though, that the document is not under seal and uses a pretty obvious technique to predict a terrorist attack — predict and predict often.

A JPEG of the man’s handwritten note can be found here. The man lists seven separate targets, including vague ones like “Water supplies” along with more specific targets like the World Trade Center, the Pentagon, and the Sears Tower.

Given that a) both the Pentagon and World Trade Center and the Pentagon had been targeted by terrorist before September 11, and b) that the man would likely spend several years in detention in Canada as extradition proceedings grind on, predicting those targets as well as “water supplies” or the “Royal Bank Toronto” is hardly proof that this man had any sort of inside knowledge.

Finally, note that this exhibit wasn’t entered into evidence until October 7, 2001. Until then it was apparently held in a supposedly sealed envelope held by someone at the jail where the man was being kept. Gee, there are only about a couple hundred ways to pull the “sealed envelope” trick on an unsuspecting mark.

The Real Danger Facing America — Softwood Imports from Canada

In the wake of the September 11 attacks, the Bush administration took action in October to rid America of the scourge of softwood imports from Canada. On Halloween night, the Bush administration imposed 12.58 percent “anti-dumping” duty on top of an already announced 19.31 percent “countervailing duty” which was levied in August. What’s the problem here? The Bush administration thinks Canadian companies aren’t charging enough for softwood.

This from the same Bush administration that was recently claiming it absolutely had to have Fast Track authority to negotiate free trade agreements. Why does the United States need more free trade agreements, when it is not even interested in living up to the one it signed with its northern neighbor?

The main beneficiaries of the new tariffs will be the U.S. lumber industry. After decades of haranguing the government for subsidies and cheap rights to federal lands, the lumber industry had the gall to complain that the Canadian lumber was excessively subsidized — a claim that the World Trade Organization has investigated twice and found baseless.

The main victims of the new tariffs will be the Canadian lumber industry and the American consumer who will end up being socked with additional costs far in excess of the benefits garnered by the timber industry.

How does George W. Bush expect anyone to take him seriously as a free trader and a person who “trust the American people” when his administration can’t even stomach Americans freely trading with Canada? Apparently those donations from the timber industry count more than the votes from the people Bush supposedly trusted.


Costs of the softwood tariff. David N. Laband and Daowei Zhang, Mises Institute, November 21, 2001.