Drug Reimportation May Not Be So Easy

| 6 Comments

The debates over drug reimportation from Canada often leave out much of the "Canada" bit. That is, they simply assume that nothing would change on the part of our Northern Neighbor (well, "our" if you're in the US anyway) should the US government decide to get out of the way of buying pharmaceuticals there. Turns out Canada may have a few things to say about it:

Many Canadian internet pharmacies supplying Americans with cheap prescription drugs would be forced to close under proposed licensing restrictions.

The restrictions were proposed by regulators in the prairie province of Manitoba, where close to half of the roughly 150 Canadian internet and mail-order pharmacies are based.

Of course, this is simply regulation masking itself as benevolence. Since the Canadians are buying drugs from the same companies that are supplying the US, "safety concerns" are limited to preventing that great wave of people faking prescriptions because they are able and anxious to take massive amounts of heart, diabetes, and cholesterol medications once they realize they can get them for a lot less than down in the states. Or maybe Paul Martin hears a Canadian version of the great "sucking sound" and knows its possibly the US vacuuming up all the available medicines should reimportation be allowed to go forward.

Just because I'm against reimportation doesn't mean I favor more government intervention to prevent it.

6 Comments

This is an excellent point that very few people understand, even educated, highly intelligent people.

The supply of drugs in Canada is limited. The drug companies aren't stupid. They're not going to supply Canadians with an unlimited supply of drugs.

If we start re-importing drugs from Canada and other countries, we will cause shortages in those countries. Frankly, I can't see why the Canadaians themselves would allow reimportation (reexportation?), except that perhaps they are simply naive.

While their hand-waving boondoggle of a health-care system always makes me scratch my head (though, I should admit, I can't for the life of me understand why anyone thought the EU/Euro was a good idea, but yet, there it is), Canadians strike me as pretty pragmatic bunch. I'm guessing that more things like this will creep up the more the US starts hoovering up Canadian drugs. Too many trips to the local pharmacies (do they call them "druggists" up there? a UK term I've always found appealing) only to see "Cyclovir, Viagra, etc... SOLD OUT" signs in the windows, and folks will start getting mighty testy.

My bet? Either regulation to block it, or pretty rapid price equalization (maybe through shipping premia, charging for "writing" prescriptions, etc,).

Ian, I agree that reimportation could cause Candian drug prices to rise (they would have to, if there isn't going to shortages).

Which begs the question, why do drug companies fight reimportation? If I were working for a drug company, I would negotiate for reimportation from a couple of small, developed countries (Canada, Ireland, and Britain). This would cause drug shortages in those countries, and put the price-fixing schemes that these governments have negotiated into disarray.

Think of it from the perspective of the country that now has a populace facing a shortage of drugs.

You can 1) agree to charge more for the drugs/let the company set the prices and see how folks react when the shortage is over, but now the price is way above the cheap level they were getting it at before. (Take the furor over the premia increase of a few months ago and multiply it by, oh, a lot.)

Or you can 2) send a couple pills to your local medical school/chemistry department, have them figure out what's in it, and start making it yourself. You've now created manufacturing jobs, given the people what they want for a price they like, and the worst that might happen is a really long court case arguing over copyrights intellectual property rights versus the dire need for the drug on the part of thousands of people.

In the face of fixed price systems like Canada, it seems to make sense to me that pharm companies fight the ability for people for cut into their profitable market by getting the drugs cheaper elsewhere. But take a too strong tactic, and the company faces someone who may choose to break a patent. Now, given some reputational issues, Canada may be one of the least likely to do so since I figure it would play very poorly with that country's business sector; this may be why we see the pharm companies refusing to sell drugs that may be then given to drug exporters -- they get to play a stronger hand.

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This page contains a single entry by published on December 6, 2004 1:10 AM.

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