op-ed

Vermont’s Tryst With The Great White North: Bad Economics, Drugs And Limelight Hoggers Galore

Shutterstock/TeddyandMia, Reuters/Carlo Allegri

Meg Hansen Executive director of VHFC, a nonprofit promoting free-market healthcare reform
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When Sen. Bernie Sanders’ open borders legislation for prescription drugs died at the hands of Senate Republicans last year, his displeasure could not have lasted long. Solace awaited in his adopted home of Vermont.

The local Democratic Party and its incestuous Progressive cousin, along with the complicit silence of too many Republicans, have cultivated a political apparatus for expedited, experimental legislation. Healthcare is a perennial favorite. During the 2018 nineteen-week session, for example, the legislature threw its weight behind marijuana legalization, a prescription opioid tax, universal primary healthcare and an individual insurance mandate. It also approved the wholesale reimportation of prescription drugs from Canada.

That’s right. Against this opportune backdrop and via a carefully groomed surrogate (Senate President Tim Ashe), Bernie’s drug reimportation baby crowned. On Wednesday, Republican Gov. Phil Scott signed the bill, which had won staggering support in the House (141-2) and Senate (29-0). One hundred and seventy-one hearts unmoved by economics or federal law leave little doubt that this is the statehouse Bernie built.

As a rule of thumb in Montpelier, the impetus to assume first place in the nation outweighs prudent governance. Does it matter that the legislature has not established a funding mechanism or will not receive federal approval by July 2019 (as the law mandates)? After all, our “brave little state” attracted the attention of national media stalwarts like Politico.

Here, note that the trail blazed pertains to “wholesale” reimportation alone, as National Academy for State Health Policy executive director Trish Riley stressed with capital letters via email. (The National Academy for State Health Policy aided in drafting the bill). By contrast, several states including Illinois and Minnesota tried out drug reimportation plans for personal use in the mid-2000s.

Indeed, Vermont participated in Illinois’s ill-fated I-SaveRx program, which became mired in ethico-legal quandaries (e.g. counterfeit participating pharmacies, fake drugs, adulterated drugs and millions in wasted taxpayer funds, and conflict with federal authorities). And yet, Democrat Senate Health and Welfare Committee chairwoman Claire Ayer, admitted that measures to ensure supply chain integrity were not considered and not included in the hastily enacted program.

Ostensibly, the reimportation scheme promises greater access to cheaper medicine. It should be understood as a manifestation of Sanders’ 1999 political gimmick, wherein he led a bus of Vermonters across the border to purchase prescription drugs in Montreal. In truth, reimportation from countries with drug pricing regulations, such as Canada, forms a politically expedient method of circumventing Congress and enforcing price controls in the United States.

Imposing greater regulatory pressure on drug makers, in the only remaining major pharmaceutical market unencumbered by pricing controls, may well seem like a victory for Bernie and his boys who scapegoat the “extraordinary greed” of Big Pharma for a living. The rest of us, however, appreciate the singular role American medicine plays in healing and improving the quality of life for hundreds of millions. Acknowledging this good neither amounts to shilling for deep-pocketed executives and lobbyists nor an apology for real bad actors like Purdue Pharma and its OxyContin quackery.

Powerful financial incentives have served as one pillar of innovation and propelled the United States, light years ahead of heavily regulated Europe and Japan, in the research and development of new and effective drugs. Blockbusters like cholesterol-lowering Lipitor, Humira (rheumatoid arthritis), Advair (COPD, asthma), and Nexium (GERD) generate billions in profits because doctors across the world prescribe them to treat a host of common, chronic diseases.

The cost of our global leadership in medical innovation (i.e., the long and arduous process of bringing a new FDA-approved drug to the market) translates into higher prescription drug prices for U.S. consumers as compared to elsewhere. Substantial and lasting reform that will reduce prices requires the elimination of (1) existing regulatory burdens, (2) invisible middlemen, and (3) brand-name monopolies to enhance transparency and market competition. The backdoor implementation of pricing controls by reimporting drugs from Canada, instead, marks a giant leap backwards.

When Montpelier uses Canada as a medicine cabinet to artificially lower prices, the economic outcome will mirror that of explicit pricing control — product shortages. The resulting decrease in prescription drug availability will produce the opposite of the reimportation’s purported objective. Fortunately for Vermonters, the federal government has never granted states permission to reimport prescription drugs, and President Trump’s Administration staunchly opposes the measure.

Vermont need not fear bread lines but, then again, the road to Progress has laid waste to many an optimist.

Meg Hansen is the Executive Director of VHFC, a Montpelier-based nonprofit committed to free-market reforms in American health care.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.