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Global Health Policy Blog


The Senate has passed a bill that would permit greater drug reimportation from Canada.

As we have discussed on this blog before, charging higher prices in richer countries (a policy called "price discrimination") is generally good for everyone. It enables the firm to obtain revenues from consumers in middle- and low-income countries who would not be able to afford to buy the drug at a single worldwide-price.  It helps consumers in rich countries, because R&D costs are spread across more consumers who contribute something - however small - to costs of developing medicines. And most importantly, for poor consumers, it means that they have access to essential, life saving medicines that they would otherwise not be able to afford.

If the US Congress gives credence to the idea that price discrimination is harmful, this will make it much harder in future for drugs and vaccines to be sold in poor countries at low prices. 

Greg Mankiw agrees.

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.