Thursday, November 24, 2005

On recognizing opportunity

It figures that the same Health Minister who can't be bothered to even try to rein in private delivery of medical services is now introducing legislation to restrain one of the areas where market forces currently work to Canada's advantage:
Federal Health Minister Ujjal Dosanjh is set to table legislation Friday to ban the bulk export of prescription drugs to the United States and set up an early warning system to detect drug shortages caused by the cross-border trade...

The minister decided to go ahead with the bill because he told stakeholders and members of the Commons Health Committee earlier this month he would take action before the end of November, a federal source told The Canadian Press...

The Internet pharmacy industry was founded in Manitoba and the province remains home to the majority of the estimated 6,000 jobs and overall trade of about $1 billion a year.
I'll agree that the early warning system makes some sense to ensure that exports don't result in limited availability in Canada. But the proposed plan doesn't sound likely to dissuade the export of drugs to any meaningful extent - and it's far more likely to result in shortages than another readily available policy option.

Which is to say: given the massive U.S. demand for Canadian drugs, wouldn't it make a world of sense to to encourage an increase in the supply instead?

Surely it has to be a plus to ultimately reduce prescription prices on both sides of the border while further developing the Canadian drug manufacturing industry. And what's the downside supposed to be - forcing the U.S. to regulate drug prices more in keeping with the rest of the world when its own politicians are eager to make use of those same prices? If the worst that could happen is the market equilibrium that Dosanjh is trying to instead impose by statute, that doesn't strike me as a particularly dangerous downside risk.

Fortunately, Dosanjh's bill will join the others set to die on the parliamentary order paper. And hopefully by the next time Parliament gets together, somebody with a bit more foresight will be in charge of the health file.

(Edit: typo.)

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