AIDSYou may have read (if you were playing close attention — it wasn’t well publicized) that Bush has reduced his promise to provide Africa with low-cost AIDS medicine from $3 billion this year to under $2 billion, allegedly because the continent’s medical distribution system can’t ensure it will be equitably distributed. The cutback will cost 10,000 Africans their lives this year, more if the reduced ‘appropriated’ amount isn’t actually spent. The subsidy of drug costs has the pharmaceutical companies and ‘free’ trade supporters justifiably concerned.

This isn’t the only area where so-called ‘free’ trade is opposed to the interests of public health. The US FDA recently prohibited Americans from purchasing drugs in Canada. They had to do this because the Canadian standard of living (at least as measured by purchasing power) is 20-40% less than that of Americans, so in order to get market share in Canada, multinational drug firms have to sell their product at commensurately lower prices in Canada. The Canadian government regulates prices to ensure this happens, as does every country in the world except the US. Same product, lower price, in a country that is part of NAFTA, the great leveler of all things. As a result, the free market has adapted to the distortion: Hordes of grey-haired Americans come up to Canada on tour buses every weekend, not to see the sights but to get their needed prescriptions cheaper. The tech-savvy ones have gone further, buying them from Canadian distributors on the internet. The FDA, goaded by the drug conglomerates, has tried to use every method in its arsenal to prevent this, but the market works pretty efficiently, so now Americans are buying Canadian addresses to get around the FDA prohibition of selling drugs from Canada to American addresses. Sounds a bit like the RIAA game, doesn’t it?

Now the public sector is getting on the bandwagon. The governor of Illinois is planning on buying its drugs from Canada as well, for all state employees, saying: “If you can buy the same drug made by the same company, and it is safe and it costs less, then that makes sense.” The FDA’s response was typical scaremongering — this guy sounds like someone on the pharmaceutical payroll:

“We’re concerned about the dangers here,” said William K. Hubbard, associate commissioner of the F.D.A. Mr. Hubbard said there could be risks from drugs bought in Canada, including those not approved by the F.D.A. and not made in the United States, those that have expired or were improperly stored and those without labels. [At the same time, Hubbard said] “It’s not O.K. for the individual to bring in drugs,” Mr. Hubbard said, “but so much of the stuff is coming in and it’s so uncompassionate to go after patients.”

Aw, gee, Mr. Hubbard, you’re all heart. What if everyone started doing this? The sales of the pharmaceutical firms would drop 20-40%, they would have to adjust their US price to the lowest global price, and their profits would disappear.

The pharmaceutical companies’ answer, of course, is to require all countries in the world to abandon their price caps on pharmaceuticals. Don’t think that’s not on the agenda of the secretive WTO talks going on now. The consequence of this would be uniformly high prices everywhere, bankruptcy of most of the world’s egalitarian health care systems, and lots more deaths of those that can’t afford to pay monstrous prices for life-and-death medicine so that pharmaceutical companies can research new designer drugs like Viagra for the rich who can afford them.

It’s just one more example of the lunacy of ‘free’ trade. It’s heartening to see that the developing nations of the world are catching on: Last weekend 21 of them walked out of the WTO talks in Cancun when the US and EU refused to end the $300 billion (conservative estimate) in annual agricultural subsidies they pay to farmers to allow the US and EU to undercut local agricultural producers in the third world. Western leaders, whose domestic employment is being destroyed by cheap foreign imports and the export of jobs to the third world, need to re-invest that $300 billion in local job creation and support for domestically-consumed products. Although the multinational corporations would cry foul if they did so, the people — everywhere in the world — would be winners.

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  1. Susan says:

    One of the arguments market fundamentalist types use is that the free market helps develop more and better drugs. But I work in biotech, and I can tell you that 50% of all drug development in the US is paid for by the govt and nonprofits. Scientists that are well paid and have the opportunity for professional accolades and advancement work just as hard as those with stock options. After all, the scientists at my company drive middle-class cars, but the executives drive the Beamers. Most of those profits don’t get near the scientists themselves.

  2. Doug Alder says:

    I made a comment over my way when Pfizer started threatening Canadian pharmacies – and I think the comment still stands. If the drug manufacturers attempt to strong arm governments outside of the US to the extent you are suggesting Dave they may all of a sudden find their patent protections disappearing in those countries. In the end it is the politicians constituents that determine whether they stay in office or not. When those same constituenmts have to start paying 2 or 3 times as much for their medications, or national healthcare plans crumble due to the increased costs – it will be the pharmaceuticals that will end up losing. The pols will act not out of any compassion for hteir constituents, but out of sheer self-preservation – power always seeks to continue itself.

  3. Rob Paterson says:

    I think that the laws of entropy will rule here Dave. If the corps can go offshore for cheaper labour, consumers can go offshore for cheaper products. If I was a pol I would say – We will support your desire to block the import of cheaper goods from offshore if you committ to only hire domestically. Wouldn’t that be a fun argument!It’s ironic isn’t it – I think the old English term is “hoist by your own petard” or blown up by your own gun.

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