‘Solve the problem at home’: U.S. plan to import cheaper drugs from Canada draws criticism

Global News ^ | 07/31/2019 | Maham Abedi

[SeekAndFind]

The Trump administration said Wednesday that it is looking at setting up a system that makes it legal for Americans to buy prescription drugs from Canada at a lower price than in the United States.

The statement, made by Health and Human Services Secretary Alex Azar on MSNBC, prompted questions about whether this could actually happen — and what it would mean for Canadians.

Azar said the administration’s proposal would allow states, wholesalers and pharmacists to get FDA approval to import certain medications that are also available in the U.S.

The FDA currently permits U.S. residents to bring medication for personal use across the border, but not more than a three-month supply.

“I came up with the idea to import cheaper generic drugs where there had been these price-gouging behaviours in the United States. We have to be open-minded here; we could get something done that really would benefit the American people,” Azar said.

He didn’t offer details on talks between Canada the U.S. or give a timeline on when the possible changes would be in place.

Paul Grootendorst, a University of Toronto associate professor who researches economics of the pharmaceutical industry, explained to Global News that there are several major flaws in the U.S. announcement.

He noted that multinational drug companies, such as Pfizer and GSK, would not welcome such a change.

“The stuff that is for sale in Canada at a relatively low price would cannibalize their sales in the United States. The companies will obviously devise ways to ensure that doesn’t happen,” Grootendorst said.

He added that FDA limits on importing drugs exist for important health and safety reasons, mainly to ensure Americans are getting “unadulterated, high quality medicines.”

“If you start importing drugs from Canada, you don’t really know exactly what you’re getting. Suppose that you purchase from the web from a so-called Canadian drug distributor, you don’t really know exactly where in Canada. How do you know exactly what it is that you’re importing?”

There are also concerns about how much dialogue occurred between Canadian and U.S. officials before Azar made the announcement. Grootendorst said he believes it’s unlikely this is something Canadian officials would be open to.

“It would be a headache,” he explained. “We already have shortages and I don’t think they’re going to welcome any move which would exacerbate that.”

In an email to Global News, the federal ministry of health did not offer many details on how much discussion occurred between Canadian and U.S. officials on the topic before Wednesday’s announcement.

“We’re in touch with U.S. officials and look forward to discussing today’s announcement with them,” the statement read.

It added that U.S. interest in Canadian medication is “evidence of our commitment to more affordable prescription drugs,” and that ensuring the country’s drug supply meets the needs of Canadians is one of the government’s top priorities.

“[We] will be working closely with health experts to better understand the implications for Canadians and will ensure there are no adverse effects to the supply or cost of prescription drugs in Canada,” it read.

“We’re in touch with U.S. officials and look forward to discussing today’s announcement with them.”

Canadian pharmacists react

The Canadian Pharmacists Association raised several concerns about the U.S. announcement, calling on the federal government to develop a plan so Canadian drug supplies are not compromised.

Joelle Walker, the vice president of public affairs at the association, told Global News that there are no clear answers on where Canada stands on exportation of medication.

“Since we’ve never actually had to face the issue of importation legislation being passed in the states, we really have to assess where our vulnerabilities are,” she said.

“We’re asking the federal government to work with stakeholders, such as ourselves and others, to make sure the legislation and the measures are accurate and going to able us to restrict that demand and not create unnecessary barriers on Canadians inadvertently.”

Walker added there are already several concerns about Canadian drug supplies.

“Canada’s drug supply is not in a position to support a country that is 10 times our size. Our biggest worry here is that this is going to exacerbate drug shortages that exist in Canada already.”

According to the association, one in four Canadians have faced drug shortages, either personally or through a family member.

Last week, the 15 groups representing patients, health professionals, hospitals, and pharmacists warned Health Minister Ginette Petitpas Taylor of the potential for increasing drug shortages in a letter.

“The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers,” the letter read. “The supply simply does not, and will not, exist within Canada to meet such demands.”

On the Drug Shortages Canada database, there are currently 7,910 shortage reports. Twenty-three per cent of those shortages, or 1,849, are current issues. One per cent of the reports, a total of 51, are anticipated shortages. The remainder have either been avoided or resolved.

Fixing the problems in U.S.

Wednesday’s announcement is a step toward fulfilling a 2016 campaign promise by U.S. President Donald Trump, and it weakens an import ban that has stood as a symbol of the political clout of the pharmaceutical industry.

It also comes as the industry is facing a crescendo of consumer complaints over prices, as well as legislation from both parties in Congress to rein in costs, along with a sheaf of proposals from the Democratic presidential contenders.

The disparity between Canadian and U.S. drug prices is also something that Sen. Bernie Sanders has mentioned repeatedly.

That’s why Grootendorst explained that the U.S. looking to Canada for cheaper drugs is a sign of the problems that exist in the country’s own system.

“It’s a little crazy there,” he said. “There’s a lot of different prices being paid by different players, there’s lots of different deals being struck.”

Grootendorst said the U.S. system itself needs reform, which requires government action and possibly start regulating drug prices.

“They have to solve the problem at home. It’s not something Canada can do, we just can’t supply their market.”

[SeekAndFind]

Well consider this : The Canadian health care plan negotiates prices for *everybody*. Because they buy drugs for everyone in Canada they can use “take it or leave it” negotiating tactics. Hospitals and pharmacy chains in the US cannot do that.

[Sequoyah101]

Drug prices in the US are criminal and the perpetrators should be prosecuted and jailed.

Full Stop.

[Trump.Deplorable]

Well I would say this would solve the problem at home, it creates competition in a way. That is good, the market will adjust accordingly.

Drug companies might not like it since they are competing with their own products. But I never understood this in the first place. Companies have a product in the United States for $100 but also sell it in China for $20, company gets mad when people order it from China, and someone with a few bucks buys a 1000 units at $20 and imports them into the united states and sell them for $60 on ebay or Amazon. The company sends out lawyers to shut down that seller. Because they are “hurting” their market place.

I always say, more power to the consumer, let them decide if order medication from Canada was worth it.

And if the Pharma companies don’t want American consumers doing this, they can adjust the price to make this “not worth it” and buy them from their American Distributors.

[Steven Tyler]

He added that FDA limits on importing drugs exist for important health and safety reasons, mainly to ensure Americans are getting “unadulterated, high quality medicines.”

“If you start importing drugs from Canada, you don’t really know exactly what you’re getting. Suppose that you purchase from the web from a so-called Canadian drug distributor, you don’t really know exactly where in Canada. How do you know exactly what it is that you’re importing?”

Is Big, Brand name, Pharma implying they sell crap to other countries.

Does Big Pharma agree to sell at a loss in some Countries, and gouge the US

Many drugs cost pennies, or fractions of pennies, to manufacture.

Plenty of folks wetting their beaks in the Pharma supply chain

[jz638]

My economics is a little rusty, could someone help me out here with what happens in the whole “supply exceeds demand” thing when prices are fixed? I’m sure it’s something like “supply just supplies even harder to meet demand” but I can’t find the citation in any book.

Seriously though, this is at a minimum accidentally brilliant. Bernie Sanders and the socialist bunch have long pointed to Canada’s drug prices as evidence of price gouging in America. Let’s see what happens when we let America have a shot at the same market Dynamics.

[NorthstarMom]

My son’s allergist gave me the reputable Canadian pharmacies from which to order his asthma meds several years ago. The option has always been there and we saved hundreds of dollars each month.

[Redwood71]

“Hospitals and pharmacy chains in the US cannot do that.”

The most used hospital by Canadians is Henry Ford Hospital in Detroit, Michigan. This is caused because there is also a shortage of doctors in Canada due to a government program in the mid-1990s to cut medical school admissions by 15 percent. Additionally, doctors in Canada receive less pay than their U.S. counterparts yet work the same long hours. And another problem is the hospital shortage like in Essex County, Ontario, and other places, where the number of hospital beds for the 410,000 residents was shrunk when the government combined four hospitals into two during the 1990’s. Canada health care is a sham. And because there is little control of their prescription drugs, they pay half price for half the drug amount used in the controlled US drugs. Thus, cheap drugs.

rwood

[cba123]

I am with you.

You should see the system here in VN.

It is cheap, everywhere, fast and so far with what have seen quite capable.

Sure America’s system might be the technical best, but it is not anywhere NEAR affordable.

[bboop]

When you get generic drugs here in the US, you never know where they were made. Could be from China, Bangladesh, India, Israel, Mexico, or Canada. Etc. It’s hard to find out but it’s imperative to know. What makes this any different??

[Nateman]

Canada basically shakes down the drug companies by threatening not to grant a patent unless they lower the prices. To bring a drug to market in the US requires over a billion dollars in red tape and the companies recoup the cost by rising the price in the US . How.many people die of rare diseases because it is not profitable to bring something to market is not known but real non the less.

[ozarkgirl]

Drug prices in the US are criminal and the perpetrators should be prosecuted and jailed. Full Stop.

As usual, we are paying for everyone else in the world. The pharmaceutical companies research and develop drugs in the US, charge us higher prices to cover those costs, then send them all over the world for a cheaper price.

[gogeo]

Drug prices in the US are criminal and the perpetrators should be prosecuted and jailed.

Full Stop.

I'm amazed at your sense of entitlement. Where else have I seen it before?

Oh yes, on the left.

[Dave Wright]

It sounds like the US drug companies negotiate a fixed wholesale price for an estimated quantity with the Canadian health service. If US customers start buying these drugs the fixed supply will eventually be exhausted.

The Canadian pharmacies would then need to buy wholesale drugs from the US suppliers at US wholesale prices to fill both Canadian and US prescriptions. Eventually this process will arbitrage the drug price to an average of the Canadian and US price which should be lower but not as low as the original Canadian price.

Canada can negotiate to a lower price the next year to offset the average but the Canadian supply would be just get sold out faster and the higher average price would be in effect longer.

If this arbitrage was done on a global basis you could get to a world average price but I don’t think US consumers would trust drugs that were shipped through India or China.

[rollo tomasi]

How do you propose to lower the cost of highly expensive to research, expensive to produce, expensive to test, expensive to go through the FDA trails, expensive to market, expensive to manufacture (Especially if ingredients are rare), with a limited IP in recouping the investment, in an environment where lawyers are salivating over one death out of 100,000 users, and where countries like Canada/Mexico are willing to take a loss (Which affects the next generation of their citizens because they incur debt/have you seen some of the grocery prices around Canada in several Provinces lately) to sell below market prices?

You sound like Joseph Stalin scoffing at basic supply and demand as well as telling solvency ratios, return on equity, and liquidity ratios to screw themselves because "its better to burn out than fade away/just crank out 5 year plans until I die".

Yes, drug companies make a killing when their product reaches the market, they have to cover the losses of those that don't and actually pay highly skilled chemists to keep developing pharms, so that a lot of more products can be discovered to sustain lives for the future generations. Why don't you develop your own life savings drugs? Maybe you will realize the value of a free market/understand the concept of a products life cycle, R&D, they payoff of investing big by actually creating things instead of being an entitled complainer.

Health care is a concept that is best left at the fee-for-service standard and working to lower costs at that point. This value-based concept of forgoing every kind of economic standard/basics is just an entitlement philosophy that destroys, not nurtures. Look at the medical price index



Your grand-kids are going to be cursing ours and the generation before us. Btw, college tuition is higher than the medical index, so if you are prone to complain about students complaining about their college loans, maybe you might sympathize with the crap sandwich that was handed to them by entitled generations sucking the teat at bloated pension plans and the backs of the next generations to come via the State and Federal budgets/leverage we enjoyed.

[CJ Wolf]

Trust? Heck they would buy them at walmart.

[Haiku Guy]

Drug companies will instantly either triple prices in Canada, or stop selling to Canada altogether.

The Canadian tail will not be permitted to wag the American dog.

[Haiku Guy]

Because they buy drugs for everyone in Canada they can use “take it or leave it” negotiating tactics.

American drug companies will leave it. The Canadian market is minuscule. Not worth messing with the US market.

[Jeff Chandler]

Grootendorst said the U.S. system itself needs reform, which requires government action and possibly start regulating drug prices.

Why? Once we can get cheap drugs from Canada, the prices here will drop.

[Jeff Chandler]

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