[RushLake]

The caller's comments about the pharmaceuticals was enlightening. Is there someone sharper than me that can explain why the big drug companies that do all the expensive research don't just pull out of the Canadian market and avoid the price controls and hassles? Let the Canadian government get their drugs from France, or Swaziland, or Myanmar, or someplace like that.

Having just gone thru several months of treatment for kidney stones, and previously for an ATV accident, I was struck by the number of Canadian nurses I met working just in two hospitals here in Michigan.

[SCALEMAN]

big drug companies that do all the expensive research don't just pull out of the Canadian market

The large US drug companies are using Canada to offset manufacturing costs. They sell into the Canadian market at slightly above manufacturing costs, thereby keeping volume high. Canada actually sets the prices. The US companies have some input into the selling price, but it is minimal.

[expatpat]

It's a thing called "marginal cost". When you make a product, there are 'fixed costs' (research and development, cost of factory buildings, etc.) and 'variable costs' (materials that go into the product, manufacturing labor, etc.)

Once you have the sales to pay for both the fixed costs and the variable costs for those sales, any further sales where the price is higher than just the variable cost will give you profit. So the drug companies are happy to get their fixed costs paid for by US sales, and the Canadian sales are just gravy. However, that works fine only as long as your Canadian sales don't eat into your US sales. That's why the drug companies don't want large-scale purchase of drugs from Canada by Americans.