Drug reimportation

Most libertarian economists oppose drug reimportation, on the grounds that the resulting lower prices would harm the incentives for R&D. Richard Epstein provides a good statement of this case, with links to the relevant debates, including some libertarian dissenters, such as Ed Crane and Roger Pilon, both of Cato.

I have wondered, however, whether libertarians ought to reconsider their opposition to reimportation. Recall that the libertarian position paints the FDA as a significant obstacle to drug research.

I suspect that allowing drug reimportation would, in the long-run, break down the authority of the FDA. Once Americans are looking to abroad for medicines, the flood gates will be opened. They will want to buy medicines from Mexico, Europe, and indeed from all over the world. These medicines, of course, will not have met with FDA approval. It is not a matter of pure logic that legal reimportation would lead to this broader class of imported drugs, but I think it is what the political equilibrium would look like. Illegal drug importation is already on the rise; legal reimportation would legitimize and publicize the overall idea of getting drugs from other countries.

So, if we allow reimportation, the FDA will either have to become much stronger, and more intrusive (in conjunction with other governmental agencies, such as customs perhaps), or the FDA will cede much of its effective power, while likely keeping its nominal powers. But in the long run it is hard to see how to enforce restrictions on drug importation, especially once reimportation is legal. Drugs don’t take up much space, and the exact nature of their content is not easily tested. You can have a customs dog sniff for pot, but that same dog cannot tell whether a drug is of pure quality of adulterated, or is something else altogether. If libertarian think that the FDA does more harm than good, perhaps they should welcome reimportation as moving us toward a greater reliance on markets.


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