105 Furthermore the report stated that Americans could reduce drug spending and

105 furthermore the report stated that americans

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105 Furthermore, the report stated that Americans could reduce drug spending and save billions of dollars each year by taking advantage of the lower prices found in the United States for generic drugs, as foreigners pay 50% more on average in other countries for generic drugs than American consumers pay in the United States. 106 E. R EIMPORTATION : A S HORT -T ERM S OLUTION AT B EST Ultimately, regardless of the different costs and benefits of reimportation, imposing a reimportation scheme to address the high prices of prescription drugs in the United States would prove to be a short-term solution at best for the simple reason that pharmaceutical manufacturers, not consumers, control the supply of prescription drugs available for sale in any market. Reimporting prescription drugs from foreign markets might lower prescription drug prices for a period of time, but eventually, if drug manufacturers perceive that their profits are declining as a result of reimportation, they can simply limit or cut off the supply of prescription medications entering foreign markets. As a result, there will be higher demand in the prescription drug market than the supply of pharmaceutical 100 See id. 101 See P HARMACEUTICAL I SSUES , supra note 9, at 14. 102 See HHS Task Force , supra note 94, at xi. 103 See id. The report was based on factual data gathered from foreign counties where some form of prescription drug importation is legal. See id. 104 See AARP Endorsement , supra note 93. 105 See HHS Task Force , supra note 94, at 73. Intermediaries will likely capture a large part of potential savings from drug reimportation because they “bear the costs of searching for drugs in low-priced countries, and the sundry costs of keeping and managing inventory, as well as shipping products to willing wholesalers, or retail pharmacies and hospitals in the U.S.” and will charge prices accordingly. Id. 106 See id. at xi.
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2006] Lowering Prescription Drug Prices in the United States 359 products can satisfy and, as basic economic theory dictates, the price of prescription drugs will eventually rise. 107 In the last few years, some pharmaceutical manufacturers have started to limit prescription drug supplies to certain countries or have threatened to do so. For example, in February 2004, Pfizer cut off supplies to two Canadian drug wholesalers for participating in the exportation of prescription drugs. 108 Wyeth and Eli Lilly have also stopped supplying any Internet pharmacy that sells prescription drugs to United States consumers. 109 Merck’s subsidiary company in Canada, Merck Frosst, recently required drug wholesalers to provide a written statement that the wholesalers would not sell Merck Frosst products to anyone selling to the United States. 110 In January 2003, GlaxoSmithKline threatened to stop supplying several drug wholesalers and retailers in Canada unless they stopped sales to the United States.
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