Posted on 09/11/2019 9:32:31 AM PDT by SeekAndFind
The Trump Administration announced in July it will allow Americans to buy cheaper prescription drugs from Canada, including penicillin treatments for diabetes. Only one problem: Canada develops few drugs. Most that are used in the country actually come from multinational companies, mostly American. It is impossible to believe that drug companies will provide the gun to shoot themselves in the foot.
Buying medications from Canada is not importing them, it is reimporting them - from the subsidiaries of multinational companies that are seen as the source of high prices. All that Americans are doing when they purchase penicillin and other pharmaceuticals from Canada is buying from U.S producers - who ultimately will not supply Canada with the means to decimate domestic sales. There have been numerous concerns raised in Canada about whether Canadians could meet U.S needs without precariously diminishing Canadian supplies. They can’t, for a simple reason: Multinational companies would obviously not welcome a change that would cannibalize their own market. Hoping to buy back medications that originated with U.S suppliers is like robbing Peter - and hoping to use the same money to pay him back.
The truth is, when it comes to the cost of penicillin, Canada is something of a free rider - or at least a cheap rider. The country keeps prices relatively low through a ceiling on costs of brand name drugs and by permitting governments to negotiate directly with drug companies. But these policies only work because pharma companies see Canada as an ancillary market. That isn’t surprising. The total value of pharmaceutical drugs sold in Canada per annum is $33 billion – a drop in the bucket, considering that the U.S. market is worth close to half-a-trillion. It is in the United States that multinational drug companies recover the cost of development, as well as ensure a healthy profit. The U.S market provides them with their meat and potatoes. Canada only provides some gravy.
In the midst of U.S prices for penicillin that are more than 10 times as high as prices in Canada, it is tempting to recall that penicillin was invented in Canada. The Canadian co-developer, Sir Frederick Banting, sold the original patent for one dollar in the express hope that the medication would be available to all who need it. But that was almost a century ago. Since that time, diabetes treatment has improved dramatically. A range of insulin therapies more closely resembling the insulin our bodies produce naturally are available.
Moreover, more than 160 medications are now in development by multinationals for diabetes and related conditions, including cutting edge treatments that will make diabetes easier to manage and better tailored to individual patients. But developing a pharmaceutical is an expensive proposition. The risks are high, as most potential pharmaceuticals never make it out of the laboratory. Development costs could run hundreds of millions of dollars, with no guarantee of cost recovery. Like all companies, drug firms are in a constant struggle for capital.
While the hope of reimporting penicillin and other medications from Canada is a wistful dream, the pressure is nonetheless on in the United States for cheaper drugs. In order to meet this demand, the industry and its Canadian consumers may well face a Hobson’s choice: Canadians can pay substantially more for penicillin and other medications. Or drug companies will have to curtail their R&D and produce fewer improvements in the medication in the future. Most likely, we would see an amalgam.
Canadians won’t like paying more. And Canadians and Americans won’t be well-served by an industry that puts the brakes on R&D. But the bear has been awakened. Americans will not simply return to figurative slumber unless the price they pay for penicillin and other pharmaceuticals is brought down.
Those looking to Canada as a savior will be disappointed. There is no reason for multinationals operating in Canada or anywhere else to undercut themselves by shipping drugs back to the United States. There is no huge stash of penicillin or other medications north of the border. Hoping that Canada can come to the rescue of Americans unable to afford insulin and other medical pharmaceuticals is not just hoping to find a castle in the sky; it is trying to move in the furniture. If they are to be more widely available, someone is going to have to give something up. That someone is going to have to be Canadians or Americans - or both.
I heard years ago that many of these drugs are subsidized or otherwise reduced in price in other countries, while they stick it to Americans to make up for the lost profits or, sometimes negative profits.
This development is interesting. A lot of grandparents making frequent trips to Canada to do this just became “non-criminal”
Canada gets a discount because its a small market and the US next door pays list price.
If you decree that the US gets the Canada price, Canada’s discount will evaporate. Which is fine with me.
Been saying that for years. It deserves to be repeated. Drugs are cheaper in Canada because the manufacturers choose to sell them cheaper there.
Yep, I'm gonna trust this article.
Ya. That is my understanding too — we Americans are subsidizing the Canadian health care system.
Eliminate the American subsidy and then the drug companies might have to renegotiate the pricing structure for the Canadian health care system.
Bottom line: is not fair for Canadians and other to brag about how great the Canadian health care system is while Americans subsidize it.
And then there’s the added benefit of preventing those countries from developing their own drug companies.
A parallel can be found with Medicare for All. Doctors can afford to accept Medicare patients at a low reimbursement rate from the government due to their relatively low numbers compared to other patients. If the same low reimbursement rate were mandated for all patients, doctors may well go out of business or reduce the quality of care.
I think more the reason they are so expensive is because it’s so dang expensive here to get them approved in the first place, and because the insurance is so dang high on these companies because people love to sue the snot out of companies-
Insulin and penicillin are interchangeable don’t-cha-know. ;-/
Part of the reason their market seems so much smaller is because of the much lower prices they pay. Insulin here costs TEN times what it costs in Canada.
Also they constantly brag how their national health insurance is so much cheaper than our system. No wonder if we’re subsidizing their meds!
So I say allow reimportation. This will force pharma to charge market prices to everyone including Canadians and Europeans.
I heard years ago that many of these drugs are subsidized or otherwise reduced in price in other countries, while they stick it to Americans to make up for the lost profits or, sometimes negative profits.
~~~
I doubt it.
Sounds like spin to me.
The disparity or ratio is probably correct, but my guess is that they make SOME profit in other countries, but MORE profit in the U.S.
But that’s just my cynical side talking. I in no way come at this with any inside knowledge.
I know the pharma companies have to invest very heavily in R&D as well as testing, compliance, and approval, but these companies make huge margins on actual product.
Basically, US drug prices are production + R&D, while Canada’s prices are production.
There’re operating costs, and Canada allows a small percent profit beyond the cost to produce an already-known medicine, but that’s the gist of it.
You can do it mail order but have to be careful that it’s a reputable pharmacy.
Some drugs are MUCH cheaper (Synthroid), and some are not.
One has to shop around but it is well worth the effort when even with a prescription plan, US meds cost 4 times what the same thing from Canada cost.
Seems like the end game, which is already being played, is “our drug can save your life but it’ll cost a million per month”.
The solution to dealing with illnesses has got to involve things other than expensive technology.
A kid in a hospital with cancer was asked how he dealt with all of the painful treatments. He said you can deal with anything as long you don’t have to do it alone.
All consumers should pay for the development costs. Not just the US. It is just one of many deals that our elites let the US get screwed.
“If you decree that the US gets the Canada price, Canada’s discount will evaporate. Which is fine with me.”
exactly. a one-page Federal law that drug companies must sell to all buyers at whatever their lowest cost is to any one buyer puts to rest all of their pricing shenanigans ...
I’ve been buying stuff from a Canadian pharmacy for years. The generic of evista at half the price and muscle relaxers and cipro.
I had a reaction to the only medication for Gastropresis a digestive disorder. REGLAN, it’s Black Boxed for 2 weeks use as it has high Neurological Side Effects. Only took 2 pill. I have Neuropathy. Medicare/Tricare would pay for it.
Gastro said to set up an account in the Philippines and he’d script in Domperidone which is England’s only drug for it. Well England had just Black Boxed it for Heart Disease. I have a heart condition. Totally out of my Pocket. I told him NO.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.