H.B writes concerning prescription prices (blogged here): “ I don’t understand the logic behind his reasoning. This isn’t free trade that benefits all consumers! This is an example of how price ceilings cause shortages. In this case, Canada has artificially lowered its pharmaceutical prices. If Americans consistently purchase drugs from Canada at these artificial prices, then the drug companies will be less inclined to devote resources to R&D. “
If foriegn countries want to artificially control prices, that’s all the better for American consumers. Perhaps too the existence of this free trade will put pressure on the U.S. to liberalize its patent laws, which amount to a price floor on the price of many American pharmaceuticals. Making the argument are Gene Callahan, Ilana Mercer, Chris Mayer, and N. Stephan Kinsella.
