Moneybox

Canadians Don’t Want Americans to Steal Their Prescription Drugs, Apparently

Bernie Sanders at a pharmacy in Canada
Democratic presidential candidate Bernie Sanders at a pharmacy on a trip to Canada.
Scott Eisen/Getty Images

Earlier this month, the Trump administration released its official plan to eventually let Americans import inexpensive prescription drugs from Canada. This is a popular idea that conservatives long resisted, but it has recently caught on among politicians on both sides of the aisle thanks to the growing sense of crisis over U.S. pharmaceutical prices. States including Florida, Maine, Colorado, and Vermont have passed laws to let their residents buy medicine over the border. Democratic presidential candidate Bernie Sanders recently joined a bus caravan of diabetes patients that traveled to Ontario in order to stock up on insulin. (Under current law, U.S. residents are allowed to bring back up to a three-month supply of medication from across the border for personal use.)

But while Americans might like the idea of treating their northern neighbor as one big discount pharmacy, Canadians seem to be less than thrilled by it. There has been concern that large-scale U.S. imports could exacerbate the drug shortages that are already a regular problem in the country. In July, 15 groups representing doctors, patients, and pharmacies sent an open letter to Canada’s health minister warning about the potential problems. “The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers,” it states. “The supply simply does not, and will not, exist within Canada to meet such demands.” And as the health news site Stat reported, advocacy organizations met with the government on Monday to discuss their concerns. Many of them want to block the Trump administration’s entirely. “It’s time for it to crash and burn,” said John Adams, board chair of the Best Medicines Coalition, told Stat. “Canadians may die.”

If you stop and think about it for more than half a second, it’s not hard to see why Canadians would be concerned. The country has a total population of 37 million people, just over one-tenth the size of the U.S., and smaller than California alone. It also has a carefully regulated pharmaceutical supply chain that keeps prices low, but, for a variety of reasons, does seem to be vulnerable to shortages. Its health ministry currently reports that there are more than 1,830 specific shortages. In a 2018 survey of more than 1,700 pharmacists, 79 percent said they believed shortages had “greatly increased” over the past three to five years. Bus caravans of diabetes patients might only put a small strain on Canada’s system—but wholesale imports to the U.S. could be an entirely different story.

“Our drug supply chain is already on the fragile side, as evidenced by all the shortages that we have. So it is quite concerning,” Barry Power, a senior director at the Canadian Pharmacists Association—the group that conducted the survey—told me. “If we saw a state like California come on board, that could really disrupt things.”

It’s not entirely clear why Canada’s drug market seems to be naturally shortage-prone; the Pharmacists’ Association recently sent a letter calling on the government to conduct more research into the issue. The industry faces some of the same challenges that drive shortages in other parts of the world: companies stop making certain generics because they’re not profitable enough, supplies go short because of factory problems or a dearth of raw ingredients. Power told me that the country might have additional trouble, because when worldwide supplies of a medication do go low, companies may prioritize sales in large markets where customers pay a premium—meaning the U.S.—over a smaller market with lower prices like Canada.

It’s possible that all of this is much ado about nothing: Legal U.S. imports are still a long way off, Canada could in theory still take legal steps to stop them, and even if it doesn’t, big business might be able to scuttle the whole thing. (As Stat notes, pharma companies often insert clauses into their contracts with wholesalers barring them from exporting drugs to the U.S. if they were originally sold for Canadian consumption.)

But that only underscores the absurdity of relying on Canadian imports in the first place. It’s a fourth-best fallback plan that’s only gained traction because so far, U.S. politicians have been unable to pass sensible regulations that would bring down prescription drugs here at home. Instead of reaching into Canada’s medicine cabinet, we’d be far better off fixing our own.