Protectionist Cato?

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In a recent post, Lew Rockwell notes that Cato’s Doug Bandow opposes free trade in pharmaceuticals. Seems there must have been a memo: now comes Just Say No To Drug Re-Importation, by Cato’s Michael Krauss. Krauss opposes H.R. 2427, which would authorize wholesale re-importation of pharmaceuticals from 26 countries to the United States for distribution to consumers. Warns Krauss, If enacted, it could endanger American lives, imperil national security, and reduce the quantity and quality of drugs available for Americans.”

This is a rambling, confused piece. Here we have a libertarian urging that the importation of commercial products, from willing sellers to willing buyers, be banned–because it could “endanger” American lives? When did libertarians abandon caveat emptor and adopt maternalism? As for how importing drugs can “imperil national security,” maybe someone else can figure out just what Krauss’s argument is, but it seems quite a stretch to me.

The real problem for Krauss is that reimporting allows consumers to avoid some of the monopoly price charged due to the US patent system. Hence, support for intellectual property rights leads once again to the undermining of genuine private property rights, such as the right to trade.

Congress’s actions are also bizarre: they help to create artificially high pharmaceutical prices by giving patent monopolies to American companies. Then, they attempt to solve the problem by allowing reimportation. Why doesn’t Congress simply curtail patent rights in drugs, if they really want to lower the artificially-high drug prices consumers face? Similar with the medicare drug prescription plan: the feds are going to increase our taxes to pay for drugs that are expensive because of the federal patent grant. If the feds are going to make us pay for retirees’ drugs, shouldn’t they at least remove patent protection from them, so that the burden is lower?

6:03 pm on July 24, 2003