Introduced Bill that allows prescription-drug imports

On January 30, 2005, eight U.S. representatives and senators, including five Republicans introduced a bill that would allow Americans to import cheaper drugs from Canada and other countries although that Republican congressional majorities and the re-election of President Bush are against legal prescription-drug imports.

Earlier On Tuesday, Democratic Sen. Byron L. Dorgan of North Dakota and Republican Sen. Olympia J. Snowe of Maine got a chance to speak their own proposal from Majority Leader Bill Frist of Republican. Mr. Dorgan and Mrs. Snowe said that the prescription medicines were charged the highest prices for American consumers. They thought it was so unfair and they were determined to pass this bill within this year. In addition, the prices in U.S. are rising at 10 percent a year. In contrast, the prices of those drugs are 70 percent lower in Canada and elsewhere. Given those pressures, ten governors, including four Republicans, last week wrote to Mr. Frist, urging passage of a drug-importation measure.

As what we learned in class, we know that Americans spend a large number of money on health care; and the spending on drugs is part of it.

If the bill would be passed, here leads a question. Will the spending on health care decrease or increase? If the prescription-drug imports are allowed, then the prices of those drugs would fall. As a result, the spending on drugs would decrease. On the other hand, however, if the prescription-drug imports are allowed and the prices fall, people would tend to buy more of those drugs, then the spending on health care would increase. Moreover, the importing would bring some foreign competitions into the domestic pharmaceutical industry, and it would be more competitive in the domestic pharmaceutical market, which might be a good thing. What do you think?