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Legalizing Drugs

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The purpose of this research is to examine the issue of legalizing the importation of drugs from the United States to Canada. The plan of the research will be to set forth the historical context for the American ban on importation of drugs from Canada and then to discuss the terms of the debate on whether the ban should be lifted and the impact that lifting the ban would have on the prescription-drug market in the United States.

America's contemporary history of drugs importation from Canada begins in 1987, when the safety and authenticity of drugs was part of the discourse of pharmaceuticals importation. The Prescription Drug Marketing Act of 1987 prohibited the importation of "unapproved" medicines. As a practical matter, that prevented anyone besides pharmaceuticals manufacturers from importing drugs into the United States (New York Times, 2003). Since 1987, three related trends have changed the pharmaceutical environment and the discourse of drugs importation from Canada. One trend has been the dramatic increase in the use of prescription drugs as medical interventions. A second trend has been the dramatic growth of direct-to-consumer, or DTC, advertising of prescription drugs, which began in the mid-1980s (ACP, 1998). In 1994, DTC accounted for $266 million in advertising revenue; by 2000 that figure had jumped to some $2.5 billion in 2000, most of it devoted to television advertising (Frank, et al., 2002). A third trend has been the persistent increase in the cost of t

. . .
ew medicine (Comtex, 2002). Another estimate is that, as of the late 1990s the typical R&D outlay for a drug introduction and approval was more than $400 million (Grabowski, 2002). What follows from figures like those is that drug manufacturers is entitled to patent protection and a fair return on investment. The right to establish prices at what they determine the market will bear is considered an incentive for R&D innovation. Prices are meant to "recapture" R&D outlay during the period of patent protection and help originators of a medicine protect their market share after generic replication of the formula is allowed (Openshaw, 2005). Importation at prices below those expected by the manufacturers would erode that intent and destroy the manufacturers' motivation for further R&D and product development. That analysis is in the background of a provision of the Medicare prescription-drug-benefit law that specifically prevents Medicare officials from negotiating discounts with the manufacturers (Pear, 2004). Advocates of importation analyze the issue differently. While they acknowledge the R&D costs and drug approval processes that manufacturers must incur for their products to be acceptable for sale in the U.S., they point to ot
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Approximate Word count = 1444
Approximate Pages = 6 (250 words per page)

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