Secretary Tommy Thompson suggests he opposes reimportation as a risk to public health. Reimportation allows a U.S. manufactured drug, sold in another country at a lower price, to be reimported back to the U.S. and sold for less. For example, in France manufacturers sell prescription drugs to wholesalers within the country at one price, but then sell the same products to Italian wholesalers for half the price. Reimportation allows French wholesalers and pharmacies to buy drugs at half-price from Italy and undercut the rest of the market back in France. At first glance, reimportation seems like an appealing solution.
Manufacturers sell drugs at different prices in different countries for several reasons.
First, some nations regulate drug costs with government price controls that artificially lower the price of pharmaceuticals. This is the case in France, Canada, and Japan. Second, in countries with lower per-capita income, such as Belize, prices are naturally set lower making pharmaceuticals cheaper than in other countries, and other countries pay only the cost of manufacturing the drug and receive a smaller profit. As a result, pharmaceutical companies rely on U.S. consumers to foot the bill for much of the research and development costs. Some companies maintain that allowing the reimportation of drugs from countries with price controls, indirectly imposes price controls on the United States.