We just discovered that Trump-appointed FDA Commissioner Scott Gottlieb is leaving the agency, apparently for family members motives (“FDA Chief Scott Gottlieb to Leave Agency,” Wall Street Journal, March five, 2019). Mates of liberty will not miss him, except of course if his replacement is worse.
Gottlieb’s most recent show of his “visible fist” (to borrow an expression that the late Murray Rothbard opposed to the “invisible hand” of the marketplace) was on the importation of prescription drugs, just a handful of days ago (“Canadian Drug Distributor Targeting U.S. City, County Workers Gets FDA Warning Shot,” February 28, 2019):
The Meals and Drug Administration sent a warning letter to CanaRx, a Canadian business that tends to make low-expense prescription drugs accessible to workers of as quite a few as 500 U.S. towns, cities and college districts.
By way of the action, the FDA is venturing deeper into a debate more than the higher expense of prescription drugs in the U.S. The agency stated that CanaRx’s “activities trigger the introduction of unapproved new drugs and misbranded drugs into interstate commerce,” in violation of U.S. law.
Foreign welfare states cap the costs of prescription drugs in order to cut down the expenditures of their wellness insurance coverage schemes. Eschewing sales of items for which the marginal expense is extremely low would not maximize earnings, so drug providers price tag-discriminate and accept from foreign buyers a lot reduce costs than from US buyers and insurers. This price tag-discrimination technique can only perform to the extent that the US government successfully prevents the importation (or reimportation) of low-priced drugs. If imports had been not severely restricted, drug costs would drop in the US and improve in foreign nations.
The FDA’s official justification for controlling imports is to shield buyers from themselves, as the Wall Street Journal story explains:
FDA officials see the matter as a single of security, saying they can not assure the purity of drugs brought into the U.S. …
FDA Commissioner Scott Gottlieb stated the agency is safeguarding buyers in its action. …
But the FDA is adamant about the CanaRx case. “We urge employers and any enrolled workers not to use any medicines from CanaRx,” Dr. Gottlieb stated. “The FDA will pursue added enforcement actions as necessary.”
It is not clear at all that importation or re-importation of prescription drugs really should be banned. Very first, even if you think in the nanny-state justification, the government could be content material with delivering info to buyers as to which drugs it deems protected.
Second, the intellectual-home justification is not clear either—especially in the context of the US government’s continuous push to extend the definition of intellectual home, extend patents length, and criminalize infringements, like via trade agreements. Enforcing the pharmaceutical companies’ intellectual home needs intruding on the home-like rights of Americans to acquire prescription drugs from foreigners who have previously buy them.
A third, connected, explanation is a lot more common. The concept is that the pursuit by the state of ends that call for the use of unacceptable signifies is itself unacceptable, as F.A. Hayek argued (notably in the initial volume of his trilogy Law, Legislation, and Liberty). The state really should shield home rights only with acceptable signifies. Indiscriminately sniffing people’s luggage or shipments at borders or other checkpoints definitely appears unacceptable in a totally free society. It is strange that the 4th Amendment gives no protection against this sort of enforcement.
Exceptions to this limitation of state energy really should arguably be accessible in specific or intense cases—like combatting trade in stolen goods with suitable search warrants when probable trigger exists. But it is unlikely that trade in prescription drugs that have currently been sold voluntary and paid for really should fall amongst these exceptions. The presumption is that trade, foreign as domestic, really should be left totally free. Producers who want to price tag-discriminate really should be totally free to do so, but really should not anticipate the help of the state. Like computer software programmers, they really should discover private techniques to preserve handle on what they claim is theirs, if they can.
My quite a few “should” refer to worth judgments. Welfare economics has shown that any government intervention eventually needs some worth judgment. (For an overview, see my “Social Welfare, State Intervention, and Worth Judgments,” The Independent Critique, Summer season 2006.)