In the US the cost of prescription drugs can be exorbitant, which is causing financial hardship for millions of Americans. Canadians do not experience these woes because we are a country with socialized medicine. Ironically, though President Trump has derided Canada for offering a universal healthcare system to its citizens, he is now pushing hard to offer Americans cheaper drugs from their neighbor to the North because, according to the Canadian Patented Medicine Prices Review Board in 2017, Americans on average pay more than three times as much as Canadians for brand name medications.
Buying or Importing Prescription Drugs: Laws and Regulations in the US are very complicated.
At BorderBuddy, our aim is to make our clients’ lives easier, so we would like to lay out what it is like to be a player in this arena, should you be involved (or considering diving in) to the pharmaceutical industry. This is what the situation is at present.
A draft rule called the Safe Importation Action Plan published by the Food and Drug Administration would allow states, wholesalers, and pharmacies to import certain medicines from Canada. Guidance issued by the Department of Health and Human Services would enable the importation of certain medications made and sold outside the United States.
However, this would not be an overnight process. If the draft rule is adopted, it will take years for states to be able to implement importation plans. The requirements by the FDA and the HHS could prove prohibitive for Canadian exporters.
At the outset, this legislation would seem like a win-win: the US wants to buy drugs from Canada, which would be great for the Canadian economy. Unfortunately, this is not the case. Not only are Canadians opposed to the concept of supplying the US with pharmaceuticals, but many lobbying groups and citizens of the US are also opposed to it as well.
Canada’s major objection is the fear of scarcity. U.S. spending on prescription drugs is more than 10 times the amount Canada spends. Marv Shepherd of the University of Texas forecasts that if 20% of U.S. prescriptions were filled from Canadian sources, the Canadian prescription drug supply would be exhausted in just six months.
Of course, Health Canada would most likely come down on any manufacturer that allowed such a thing to happen.
Drug shortages obviously would be detrimental for Canadians. Not being able to access necessary medication compromises a patient’s safety. In addition, drug scarcity increases patient stress, adverse events, including even death. Short of such extreme effects, prescription drug shortages can result in increased cost both to patients directly and to the health-care system as a whole. It’s just not something anyone wants to have happen, especially if it’s just for the purpose of turning a profit.
The other main objection Canadians have is that this push to pass legislation to allow Americans to purchase drugs from Canada feels like our neighbors from the south are dumping their problems at our door.
“It’s the equivalent of Trump saying, ‘We’re going to build a wall and Mexico is going to pay for it,’” Andre Picard, a health columnist for Canada’s Globe and Mail newspaper, told the CBC. “It’s exactly the same thing. It’s ‘We’re going to have cheaper drugs and Canada’s going to pay for that.’”
Many in the US share this sentiment that putting a band-aid on the problem avoids really overhauling the healthcare system and the for-profit pharmaceutical industry that bilks people for overpriced products.
The other main problem the US has with importing drugs from Canada has to do with fear of quality/health regulation. The Trump Administration’s push for this policy has set off a range of counter-motions by other players. Pharmaceutical Research and Manufacturers of America, the trade group known as PhRMA (“pharma”), which opposes importation, is emphasizing safety concerns. “Canada has said that it cannot and would not be able to certify that medicines shipped through Canada to the United States are safe,” PhRMA says on its website.
Drug distributors in the U.S. are also against importation, with the Healthcare Distribution Alliance, a lobbying group, saying it would “threaten patient safety without any meaningful cost reductions.”
Many people unhappy about this development in the US want to know why it’s the insurance companies, and not the government setting the drug prices.
What does this mean for Canadian exporters?
Though many U.S. states, including Vermont and Florida, are lobbying hard for access to less-expensive prescription drugs imported from Canada, if you are a Canadian looking to get into the business of exporting prescription drugs, you will have a very difficult time dealing with the US and most likely, it will not be worth the headache.
It’s clear that the overwhelming sentiment on both sides of the border is that rather than change the underlying problem of unaffordable healthcare and inflated drug costs, politicians are looking for a superficial fix that will make them look good without really addressing the root of the healthcare system in the US.
If you have any questions regarding your import or export business, our knowledgeable staff is here to answer your questions. Give BorderBuddy a call for customs solutions.