PolicyGuy

Thursday, October 28, 2004


Canadian Drugs Face U.S. Lawsuits
Brian Ferguson, a health care economist at Ontario's University of Guelph, offers another reason why "re-importation" of drugs from Canada is a non-solution to the problem of prescription drug affordability: Lawsuits.

If imports from Canada are expanded to the degree necessary to make any substantial difference, Canadian firms will face enough of a threat of lawsuits to make cost savings evaporate.

"The U.S. is a litigious society .... according to a 1997 study, published in the Journal of Law and Economics, fully half the price difference between Canadian and U.S. drugs can be explained by the need to set aside reserves against litigation awards.

Canadian firms would not be immune; where millions of dollars are involved, lawyers will find a way. Large scale re-importation from Canada would require some business presence in the U.S., and that would be vulnerable to American juries."

"Justice Louis D. Brandeis'?s metaphor of the states as "laboratories" for policy experiments ... had almost nothing to do with federalism and everything to do with his commitment to scientific socialism. .... To this day, it continues to inhibit a truly experimental, federalist politics." -- Michael S. Greve

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