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Duke Economics Working Paper #05-01

How did the 2003 Prescription Drug Re-importation Bill Pass the House?

Mike Adams*, Omer Gokcekus*, Henry Grabowski*, Edward Tower*

Edward Tower is a professor of economics at Duke University . tower@econ.duke.edu . 919-332-2264.

Abstract

This paper examines the major interest groups in the debate over allowing the wholesale re-importation of prescription drugs through the Pharmaceutical Market Access Act. By making use of the logit model, we see the effects that each of these groups has had on the voting behavior of the 108 th Congress on the bill. We find evidence suggesting that Representatives are maximizing their electoral prospects: Contributions from pharmaceutical manufacturers and HMOs significantly influence the probability of voting for the Bill. Similarly, Representatives are sensitive to their constituency’s interest: employment in pharmaceutical manufacturing and the presence of senior citizens are also taken into account. However, the decision was by and large a partisan one: Party affiliation was the most important factor in passing the Bill.

JEL Classification Codes: D72, I18, F13

* Adams ( mca8@duke.edu) Grabowski (grabow@econ.duke.edu), and Tower (tower@econ.duke.edu) , Department of Economics, Duke University, Box 90097, Durham, NC 27708-0097.

* Gokcekus (gokcekom@shu.edu), John C. Whitehead School of Diplomacy and International Relations, Seton Hall University, 400 South Orange Avenue, South Orange, NJ 07079.

Adams started this project as part of his senior honors thesis at Duke University. Tower, Gokcekus and Grabowski were the advisors. Gokcekus gratefully acknowledges 2004 Summer Research Grant from Seton Hall University. We would like to thank the following for their help: Adam Godet, Amy Glass, Chris Magee, Marjorie McElroy, John McLaren and participants of SHU-Diplomacy School’s Faculty Lunch Seminar, Second Annual Duke-Department of Economics Undergraduate Research Symposium, and the participants in the “Trade and Political Economy Sessions,” at the 2004 Annual Meeting of Southern Economic Association in New Orleans.

Corresponding Author — Omer Gokcekus, School of Diplomacy and International Relations, Seton Hall University, S. Orange, NJ 07079; Tel: 973- 313- 6272; E-mail: gokcekom@shu.edu; Fax: 973- 275- 2519.

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