The high cost of prescription drugs in the United States is a problem that has engendered much political attention. One proposed solution to the prescription drug problem is to permit reimportation of U.S.-made drug products, allowing Americans to take advantage of products sold at lower prices abroad. In 2000, the United States passed such a measure known as the Medicine Equity and Drug Safety Act (“MEDSAâ€), which, if implemented, would have overturned a decade-long bad on the reimportation of pharmaceuticals without the consent of the manufacturer. Though supported by many consumer advocates and politicians, MEDSA would have had tenuous affect on drug prices and posed unnecessary risks to consumer safety. Reimportation’s theoretic results of eliminating geographic price discrimination would have detrimental results for society as a whole by reducing the incentive for drug manufacturers to innovate. Furthermore, a global pricing system for pharmaceuticals may create severe consumer losses, especially in developing counties. Lastly, reimportation of patented goods may be subject to legal challenge under current construction of the exhaustion of rights principle. Rather than considering reimportation, the government should implement a policy that provides lower-cost drugs to those who need them the most, the uninsured elderly. A policy of price discounts for uninsured elderly would improve the prescription drug situation without threatening the incentives for pharmaceutical innovation, and would lead to greater social benefits overall
