Let’s say that you are running a lemonade stand. You buy your cups, your ice, sugar and lemons. All in, it costs you $0.10 to make a cup of lemonade. Include your time and risk plus the profit you need and you sell it for $0.20 a cup. Anything less and the risk of running the stand forces you to pack up shop and go back to work at the local grocery store.
Now, let’s say that the friendly neighborhood HOA comes over and says that some of your customers are kids who are thirsty because they are mowing lawns for the old ladies on the block. They can’t afford the 20 cents you are asking but it’s just not fair that these kids don’t get to drink lemonade when they are so so thirsty and so so deserving. You shake your head and kick your toes….you know what’s coming.
If you wanna keep selling lemonade on this street you have to sell lemonade to the kids for a nickel; a stinkin’ nickel!
What happens to your lemonade business model? Well, you either:
- Raise the price such that you compensate for the reduced price to kids
- Move to another street so that none of your customers, including the poor deserving yet thirsty kids have ANY lemonade.
WASHINGTON – A bipartisan group of lawmakers hopes to finally win a long struggle to ease curbs against importing low-cost prescription drugs…
Same thing, right?
Drug companies have a market that they sell into. The prices currently are set such that they make the profits they need to exist. In fact, those prices might ALREADY be higher than they would because foreign nations are already forcing prices below market levels.
Well, guess what will happen when/if this becomes law? Our fearless reporter gets to it. In the SIXTH paragraph:
…the billions of dollars drug companies would lose if Americans began buying large amounts of lower-priced pharmaceuticals from other nations — has prevented the proposal from being implemented for about a decade.
Good for our young reporter! Finally he gets what might happen. See, if the drug companies lose billions of dollars they are going to have to …. Ahh, what? What did you say? Our fearless reporter is continuing in ANOTHER direction?
“Does the pharmaceutical industry have a lot of clout? The answer is they sure do,” Dorgan said Wednesday. He said when it comes to a vote, he hoped “the interest of the American consumers will have as much clout in this chamber.”
Heh. I should have known. But lucky for us we can spot the key phrase:
the interest of the American consumers
And that means that this bill is a bunch of: