Just say no

... to price controls.

A slew of economists, including Milton Friedman, have signed an open letter to Congress in opposition to the flipped out "drug re-importation" scheme. The whole idea is just an attempt to impose price controls without actually having to say "price controls." These guys call a spade a spade.

We are deeply concerned about proposed legislation to remove pharmaceutical companies' ability to control the importation of their products. The goal of this legislation will be to reduce prices in the American market by imposing other nations' price controls on us. If this attempt succeeds, American consumers would get the short-term windfall of lower prices, but they would end up unnecessarily suffering and living shorter lives -- because promising new therapies would be delayed or not even developed. Even the threat of price controls reduces the incentive to develop new drugs.

The ideal solution would be for other wealthy nations to remove their price controls over pharmaceuticals. America is the last major market without these controls. Imposing price controls here would have a major impact on drug development worldwide, harming not only Americans but people all over the world. On the other hand, removing foreign price controls would bolster research incentives. In addition, most new drugs are developed by American firms, and price controls would harm those firms and their employees.

Drug-price controls are more difficult to remove than other price controls. Controls on oil and other products often tend to be limited or short-lived, as voters eventually object to the resulting shortages and distortions. The effects of drug price controls, however, are far more difficult to observe because they mainly affect medicines that haven't been invented yet.

Even if people were to realize that price controls are preventing new drugs from being developed, undoing the effects of those controls would be a difficult task. Customers would have to pay higher prices for years before they saw benefits. Firms would have to be convinced that controls would not be reimposed as soon as their new drugs are released.

For these reasons, we urge Congress to abandon attempts to peg U.S. drug prices to controlled prices in other nations.

If you follow the link, you'll see that the list of signers is much longer than the actual letter.