Prime Minister McCain

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
NY Sun
NEW YORK SUN CONTRIBUTOR

Maybe Senator McCain will drop out of the race for president of America and throw his hat in the ring for prime minister of Canada. That’s the message we take away from his speech yesterday on health care, which indicated a willingness to import Canada’s price controls into the American pharmaceutical industry. “Problems with costs are created when market forces are replaced by government regulated prices,” Mr. McCain told the Des Moines Rotarians. True enough. But then Mr. McCain went on to propose — wait for it — government-regulated drug prices. “If drug costs reflects value, fine,” the senator said. “But if there are ways to bring greater competition to our drug markets by safe re-importation of drugs, by faster introduction of generic drugs, or by any other means we should do so. If I’m elected President, we will.”

The senator left unsaid who it is who is going to decide whether drug costs reflect value and what the consequences are for pharmaceutical companies, or, more importantly, for patients, if the decision falls to, say, senators or a federal bureaucracy. We have faith in the American people and the American political system to recognize that price controls discourage innovation. The Canadian electorate and political system, on the other hand, is an altogether different ballgame, which is why, when Mr. McCain starts talking about “safe re-importation of drugs,” Americans concerned with keeping the American pharmaceutical industry the world’s most innovative get their dander up. What he’s talking about isn’t competition at all; it’s letting Canada impose its socialistic, innovation-deterring drug-pricing mechanism on America’s free consumers and industry.

If that sounds like a Democratic Party idea, it is. Back on July 11, 2006, the Senate actually voted on an amendment prohibiting American border and customs authorities from enforcing rules against importing prescription drugs from countries, like Canada, that have price controls. Democratic presidential candidates such as Senators Biden, Clinton, Dodd, and Obama, all voted for the amendment. Reliable Republicans like the Republican leader, Senator McConnell, and the physician who was a leading voice in the upper chamber on health care issues, Senator Frist, voted against it. Senator McCain joined Clinton, Obama, and the rest of the Democratic caucus in approving the amendment.

The point isn’t simply re-importation, which is but one aspect of the debate over health care cost and quality. There is the economic question of the future of the American pharmaceutical industry, which includes two companies based here at New York City, Pfizer and Bristol-Myers Squibb, and a third, Merck, based at New Jersey. The portfolio manager of the Vanguard Health Care Fund, with assets under management of roughly $27 billion, Edward Owens, who has amassed an impressive long-term performance record in that sector, warned his shareholders in his most recent semiannual report, “We are somewhat cautious regarding the health care market, believing that the U.S. Food and Drug Administration has tilted its focus toward safety rather than innovation, reducing new product flow and the value of the sector.” Mr. Owens went on, “We continue to invest in Japanese pharmaceuticals, primarily on the basis of the companies’ attractive pipelines. As the Japanese medical and pricing systems evolve, new drugs will receive premium prices, which should also benefit these innovative companies.”

Mr. McCain’s talk of “faster introduction of generic drugs” is itself code for trammeling the intellectual property rights of American inventors. What’s the matter with the senator? The most important question on health care is one we conceive of not in terms of return on investment or international competitiveness or patent law but with the prospect of finding cures for the diseases that ail Americans, not to mention the rest of the world’s population. In other words, it’s a pro-life issue. Mr. McCain claimed, “The problem, my friends, is not that Americans don’t have fine doctors, medical technology and treatments. … The biggest problem with the American health care system is that it costs too much.” Tell that to someone dying of cancer or heart disease or diabetes, someone who might be helped by the next miracle drug invented by capitalist ingenuity.

What are the chances the cure will come from that powerhouse of medical innovation that has been spawned by Canada’s price controls? Quick name one – one — Canadian drug company, or miracle drug invented under Canada’s cost control regime. Tough, huh. A truly growth-oriented presidential candidate would worry less about what Americans are paying for health care and more about making sure the right incentives are in place to keep America the center of innovation. President Reagan understood it. President Bush understands it. If Mr. McCain does not, he’ll have a hard time winning the Republican Party nomination, though he’d be welcomed with open arms on one of the benches in Ottawa.

NY Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use