Recent articles have now indicated that the current Administration will permit the importation of drugs from Canada and possibly other locations. In the analysis in various papers, the issue of assuring that these drugs are compliant with the Federal Drug Administration has been raised.  I refer back to my most recent article (and my prior ones, which are enumerated in that article) on the approach for pricing drugs that would avoid that problem.  Recall that under the “Most-Favored Nation” approach, the United States would mandate by statute that no one could sell a pharmaceutical in the United States for a price higher than the lowest price that it was sold anywhere else in the world.

I recognize that this has the potential of unforeseen consequences, including the possible unforeseen consequence that funding will not be provided through the pricing mechanism for drug companies to engage in high risk research and development. While the drug importation approach would be on a much smaller scale, obviously people buying drugs cheaper in Canada will diminish the demand for the same drug at a much higher price in the United States.  That also will deny resources to the drug companies for research and development.

I believe that, leaving in the hands of the drug companies, the business decisions as to pricing within a restricted environment of “Most Favored Nation” will result in the best approach for the spreading of research and development costs on all users throughout the world and not imposing them solely on the American consumer.