Commentary: Legalizing drug importation harms Texas’ patients, economy


President Donald Trump promises to help lower America’s prescription drug bills. How? By allowing patients to buy medicines from overseas pharmacies.

Though intended to help everyday Americans, legalizing drug importation would actually harm them. It would force American pharmacies to compete on a deeply uneven playing field. Foreign companies, benefiting from the socialist price controls of their home governments, could destroy middle-class jobs all over the country.

The policy shift would hit Texas particularly hard. The drug industry is a central pillar of our economy, contributing $52 billion to our annual economic output.

Today, drug firms support over 36,000 local jobs, which are generally high-skilled, immune to outsourcing and pay out middle-class wages that can support a family.

And this work can profoundly improve human life. For instance, Austin-based Xeris Pharmaceuticals just announced it raised $41 million to fund research into a new, cutting-edge treatment for hypoglycemia, a condition afflicting millions of diabetics. In total, Texas drug firms invest nearly $1 billion every year to finance some 3,000 clinical trials.

This industry would be put in jeopardy if drug importation were legalized. President Trump won the White House in large part because he promised to protect American workers from unfair foreign competition. Drug importation is unfair foreign competition at its worst.

Right now, federal law significantly restricts purchases of imported prescription medicines. Overturning those restrictions has obvious appeal: Drug prices in Canada and Western Europe are generally lower than they are here in America.

But medicines are cheaper in foreign markets because governments in those countries impose price controls. The Canadian government, for instance, sets low price ceilings on drugs sold through its national health program and fines companies for breaking them. British authorities tightly limit the profits drug companies can make through the National Health Service.

This socialist tinkering is strikingly similar to currency manipulation, the practice perfected by China, in which a country’s central government keeps its currency artificially weak to boost exports. President Trump has repeatedly denounced that abuse and rightly pointed out that it undermines American manufacturing.

He should take a similar stance here.

Legalizing importation would flood the domestic market with artificially cheap drugs. Texas firms wouldn’t stand a chance; they have to charge genuine market rates to cover the billions of dollars they typically have to spend to develop just one new medicine. A big slice of their customer base would switch over to cheap foreign drugs; sales would plummet; and they’d be forced to cut jobs and scale back new research.

There are better ways to drive down domestic drug prices that don’t put our economy at risk.

For starters, the White House and Congress should work together to reauthorize the Prescription Drug User Fee Act. Passed in 1992, this law creates what amounts to user fees for the Food and Drug Administration. Drug companies have to pay a set amount every year to ensure the agency has the resources it needs to quickly and accurately assess new medicines. This legislation has helped usher over 1,500 new drugs into the American market, but the current iteration expires in September. Reauthorizing the Act would keep new medicines flowing and fuel competitive pressures in the drug market.

Next, as part of his effort to renegotiate America’s trade deals, the president should ensure that our trading partners respect intellectual property law. China, India and other major global economies routinely violate our patent protections and illegally produce generic knockoff medications. Beating back this abuse would force customers in those markets to pay fair prices and allow drug companies to reduce the prices they charge here at home.

Cutting drug prices by importing foreign medicines may sound promising. But it would expose Texas employers to unfair foreign competition and wipe out local jobs. And that’s no way to keep an economy like Texas’ great.

Kowalski is president and CEO of the Texas Healthcare and Bioscience Institute.



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