In Bootleggers & Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics, economists Bruce Yandle and Adam Smith explain how money and morality are often combined in politics to produce arbitrary regulations benefiting cronies, while constraining productive economic activities by the general public.
Featuring Sen. Byron L. Dorgan (D-ND); and Roger Pilon, Vice President for Legal Affairs, Cato Institute.
Americans look abroad and see prescription drugs, made in the United States, sold at a small fraction of the price they’re paying here for the same drugs. Yet they can’t order such drugs legally because American law forbids the “reimportation” of drugs. That ban enables American drug manufacturers to recover their full costs, including high research and development costs, in the domestic market, then sell abroad to socialized medical systems at far below true cost. In effect, as with defense, the rest of the world is riding free while Americans pick up the full costs of drug R&D. Is it time for a free market in prescription drugs? And will opening the market to allow reimportation from Canada only, a compromise some people are proposing, lower prices for Americans, or simply raise them for Canadians?