According to a speech given recently by AstraZeneca PLC's Chief Executive Tom
McKillop, he feels the pharmaceutical companies that currently conduct major portions of their R&D in the US may shift a large portion of that work to China and India if the government approves drug importation. McKillop answered many questions on importation during a question and answer period. He warned that the US would catch the “European disease” of the 1990’s in which Europe lost it’s dominance in the R&D area of pharmaceuticals due in part to a number of unfavorable new policies, including parallel trading between countries.

If the US decides that an easy, quick fix to rising health care costs is to allow for importation from price fixed countries, they will open themselves up to a whole host of problems, only one of which will be the loss of tens of thousands of R&D positions. The US should strongly consider the long-term implications of opening it’s borders to allow drugs to flow in. The reality is, allowing importation of drugs from other countries is a back door way for politicians to bring in price controls without addressing the issue head on.

While the cost of branded medications have risen sharply in the past, so has the cost of developing ever more complex drugs and performing costly clinical trials. But if one looks at the overall cost of healthcare, the cost of medicines makes up roughly 10 to 15% of the total costs of most companies and governments health care spending. This number hasn’t risen much at all recently; the most expensive cost of healthcare is hospitalization and doctor’s bills, which one could argue could be reduced by taking medicines. If the US passes an importation bill, not only will it have a huge impact on American jobs, people will begin to realize that the savings are not at all what they were hoping for. Studies have shown that parallel trading in Europe has not lead to lower costs for consumers since most of the difference goes to profits for all of the new middle men that come along to buy and resell between countries.