Posted on December 9, 2009, under news.
In an amazingly short-sighted move, the DC City Council has passed a law limiting the reasonable price of drugs in DC to “30 percent over the comparative price in Germany, Canada, Australia or the United Kingdom”. There are just so many things wrong with this idea, where do I start?
•Price controls always cause shortages.
•Maximum price limits rapidly become minimum price points.
•The liability environment in Germany, Canada, Australia or the United Kingdom is nothing like that in DC, so expenses are not the same.
•Ever hear of the Commerce Clause? Think pharmaceuticals are a national market? By today’s readings, the council has no authority to attempt to regulate this trade.
•The companies are guilty until proven innocent. Lovely.
•Presumably, we’re talking the LOWEST price of Germany, Canada, Australia or the United Kingdom.
•The drug companies aren’t selling in DC. Local pharmacies are. They buy from a wholesaler that probably isn’t in the district. The wholesaler buys from a distributor that isn’t in DC. The distributor bought from Pfizer. So sue Pfizer. Riiight.
•The Council passes a law lowering the Council’s burden of proof in a lawsuit. No hint of corruption or conflict of interest here, is there?
The quote from bill author Councilman David A. Catania is interesting. “This is not price control, this is not price fixing”. I have a news flash for you David. A law controlling the price IS a price control. Must be a public school graduate.
My first reaction? If I ran the drug company, I’d stop selling in DC. All sales contracts will require that the distributor / wholesaler shall not offer the product in DC nor allow their customer to. Then wait and fill the larger orders destined for drug stores in Maryland, Virginia and surrounding communities. That’s not overreacting. This needs to be smacked down hard, right now.
Catania, chairman of the council’s health panel, said the District’s bill is the first in the nation and he has fielded inquiries from legislators in other states, such as Maine, who are interested in introducing similar bills.
If the drug companies can’t cover all their expenses AND risks, they’ll stop taking risks. I like the idea of new drugs, but research is risky. If the American public likes seeing $500 million dollar liability awards, they should pay for such foolishness when they buy products that get sued. Germany, Canada, Australia and the United Kingdom don’t have that kind of silliness, so they get lower prices. Sounds fair to me.
This kind of ‘consumer protection’ only hurts the consumer, and reminds me more of another kind of protection racket.