PRA Opposes Dorgan/Snowe/McCain Amendment to Senate Healthcare Legislation
Soon, the Senate will vote on an amendment (SA 2793) to the Senate healthcare reform bill that would allow for the importation of prescription drugs. For the U.S. Senate to sanction and encourage the importation without consequence of foreign drug products that have not been directly associated with a "normal" FDA approval, by individuals or wholesalers who are not directly licensed by the product’s manufacturer or owner, calls into question the U.S. policy regarding protection of intellectual property.
In the realm of property rights this amendment will be extremely damaging. When government steps in and places an artificial price ceiling on drugs, companies face a disincentive to enter the market. If pharmaceutical companies risk having their investments effectively expropriated by the government, future investment and innovation will be hamstrung. Research and development is very expensive, and companies need to have an incentive to keep inventing life-saving drugs.
Without any assurance that intellectual property will be respected and protected, not only drug makers, but other companies as well, will avoid investing in developing new products since they risk having their investments effectively expropriated by the government. Americans have seen this type of expropriation before with respect to physical property rights (e.g. eminent domain of homes and land).
The United States is a global leader in pharmaceutical and biotech research, due to a combination of reliable patent laws and the freedom of companies to engage in market pricing. America benefits from hundreds of billions of dollars of investment in the pharmaceutical and biotech industries and hundreds of thousands of well paying, highly skilled jobs in those industries. If the United States government began to make its intellectual property policies inconsistent and arbitrary (by adjusting those to accommodate short-term political pressures) these jobs and investments would be jeopardized.