Free Trade in Pharmaceuticals
by Rep. Ron Paul, MD by Rep. Ron Paul, MD
Ron Paul in the US House of Representatives, July 24, 2003
Mr. Speaker, I am pleased to be an original cosponsor of HR 2427, the Pharmaceutical Market Access Act, because I believe it is an important bill that will benefit all Americans. As my colleagues are aware, many Americans are concerned about the high cost of prescription drugs. These high prices particularly affect senior citizens who have a greater than average need for prescription drugs and a lower than average income. Of course, some of these seniors may soon have at least part of their prescription drug costs covered by Medicare.
However, the fact that Medicare, that is already on shaky financial ground, will soon be subsidizing prescription drug costs makes it more important than ever that Congress address the issue of prescription drug costs. Of course, Congress’s actions should respect our constitutional limits and not further expand the role of government in the health care market.
Fortunately, there are a number of market-oriented polices Congress can adopt to lower the prices of prescription drugs. This is because the main reason prescription drug prices are high is government policies, that give a few powerful companies monopoly power. For example, policies restricting the importation of quality pharmaceuticals enable pharmaceutical companies to charge above-market prices for their products. Therefore, all members of Congress who are serious about lowering prescription drug prices should support HR 2427.
Opponents of this bill have waged a hysterical campaign to convince members that this amendment will result in consumers purchasing unsafe products. Acceptance of this argument not only requires ignoring HR 2427’s numerous provisions ensuring the safety of imported drugs, it also requires assuming that consumers will buy cheap pharmaceuticals without taking any efforts to ensure that they are buying quality products. The experience of my constituents who are currently traveling to foreign countries to purchase prescription drugs shows that consumers are quite capable of purchasing safe products without interference from Big “Mother.”
Furthermore, if the supporters of the status quo were truly concerned about promoting health, instead of protecting the special privileges of powerful companies, they would be more concerned with reforming the current policies that endanger health by artificially raising the cost of prescription drugs. Oftentimes, lower income Americans will take less of a prescription medicine than necessary to save money. Some even forgo other necessities, including food, in order to afford their medications. By reducing the prices of pharmaceuticals, HR 2427 will help ensure that no child has to take less than the recommended dosage of a prescription medicine and that no American has to choose between medication and food.
Other opponents of this bill have charged that creating a free market in pharmaceuticals will impose Canadian style price controls on prescription drugs. This is nonsense. Nothing in HR 2427 gives the government any additional power to determine pharmaceutical prices. HR 2427 simply lowers trade barriers, thus taking a step toward ensuring that Americans pay a true market price for prescription drugs. This market price will likely be lower than the current price because current government policies raise the price of prescription drugs above what it would be in the market.
Today, Americans enjoy access to many imported goods which are subject to price controls, and even receive government subsidizes, in their countries of origin. Interestingly, some people support liberalized trade with Communist China, which is hardly a free economy, while opposing HR 2427! American policy has always been based on the principle that our economy is strengthened by free trade even when our trading partners engage in such market distorting polices as price controls and industrial subsidizes. There is no good reason why pharmaceuticals should be an exception to the rule.
Finally, Mr. Speaker, I wish to express my disappointment with the numerous D.C.-based “free-market” organizations that are opposing this bill. Anyone following this debate could be excused for thinking they have entered into a Twilight Zone episode where “libertarian” policy wonks argue that the federal government must protect citizens from purchasing the pharmaceuticals of their choice, endorse protectionism, and argue that the federal government has a moral duty to fashion polices designed to protect the pharmaceutical companies’ profit margins. I do not wish to speculate on the motivation behind this deviation from free-market principles among groups that normally uphold the principles of liberty. However, I do hope the vehemence with which these organizations are attacking this bill is motivated by sincere, if misguided, principle, not by the large donations these organizations have received from the pharmaceutical industry. If the latter is the case, then these groups have discredited themselves by suggesting that their free-market principles can be compromised when it serves the interests of their corporate donors.
In conclusion, Mr. Speaker, I once again urge my colleagues to show that they are serious about lowering the prices of prescription drugs and that they trust the people to do what is in their best interest by supporting HR 2427, the Pharmaceutical Market Access Act.
Note: the bill passed the House on July 24 by 243-187.
Dr. Ron Paul is a Republican member of Congress from Texas.