Well, this was just about inevitable.
Canada deals blow to cheap US drug imports
By Bernard Simon in Toronto
Published: October 17 2004 21:47 | Last updated: October 17 2004 21:47
More than 30 Canadian internet pharmacies have decided not to accept bulk orders of prescription drugs from US states and municipalities.
The move delivers a potentially serious setback to US politicians most notably Democratic presidential candidate John Kerry campaigning to give Americans easier access to cheap drugs from Canada.
Mr Kerry has argued that opening the US to Canadian imports could help lower the costs of prescription drugs for elderly Americans. Such reimportation has become one of the points of difference between him and President George W. Bush during the election campaign.
But growing concern in Canada that growing exports to the US could lead to rising prices and shortages north of the border has prompted the Canadian International Pharmacy Association (Cipa), whose members include several of the biggest internet and mail-order drugstores, to act. “We don't want to give Americans the impression that we have unlimited supply for them to tap into on a commercial basis,” said David Mackay, the association's executive director. Americans, he added, “can't get everything from Canada. We can't be your complete drugstore”.
Prescription drug prices are significantly lower in Canada than the US, because of price controls and bulk buying by the 10 provinces. Individual Americans have crossed the border for years to buy cheap medicines, but the internet and spiraling healthcare costs in the US have led to a wider movement for states and cities to source the drugs they need from Canada. Several states, such as Minnesota and New Hampshire, have set up websites directing residents to approved pharmacies in Canada. Cipa members would continue to service these customers, Mr Mackay said, but would not deal with states such as Illinois and Wisconsin that have proposed turning over their entire supply system to a Canadian internet pharmacy.
Cipa members make up about a quarter of the roughly 150 internet pharmacies operating in Canada, raising the question whether others will follow its lead. Mr Mackay said discussion had been heated at an all-day meeting of Cipa last month at which the new policy was approved. With pharmaceutical manufacturers seeking to restrict supplies and the US Congressional Budget Office recently saying that reimportation from Canada would have a “negligible” impact on US drugs spending, the internet pharmacies have already had difficulty meeting demand from south of the border.
Several have set up alliances with pharmacies in other countries. A sharp rise in the Canadian dollar has also squeezed profits.
Ujjal Dosanjh, Canada's health minister, said over the weekend that he was not concerned “at this point” either about domestic shortages or the safety of Canadian medicines.
Still, public opinion appears to be gradually turning against the online operators. Canadian Treatment Action Council, a lobby group representing pharmacists and patients, is due to speak out today against drug exports to the US.
Why was this inevitable? Because drug companies and the Canadians aren't stupid. If Canada starts placing enough drug orders to feed both the US and Canada, the drug companies will start raising their Canadian drug prices to replace the profits lost over the border. What the Congress should do. rather than jump on the reimportation bandwagon, is start allowing Medicare to do what the Canadian health system does: negotiate to buy in bulk. This is something I consider an egregious failure in the Medicare reform plan.
This also happens to torpedo another of Kerry's positions. The first was that he'd get more allies involved in Iraq, with the assumption being he was talking about NATO, with the active assistance of France and Germany. Well, Germany has said “To be clear, we will send no troops to Iraq.” France has followed up with “Ni aujourd'hui, ni demain.” or “Not today, not tomorrow.”. Now, those pesky Canadians, unilaterally acting in their own interests on reimportation, have said “Don't think so.”