Back in 2019, it was widely reported that the FDA was moving to crack down on the importation of Canadian drugs into the USA. This came on the heels of several years of Americans waking up to the significant savings to be made in purchasing drugs online from Canadian companies such as Canada Pharmacy. Just over a year later, then US President Donald Trump approved a bill to allow drugs to be imported from Canada on a much larger scale, essentially scaling up what Americans have actually been doing for some time.
True to Trump’s stated commitment to the economic liberalism (although somewhat contrary to his “America first” protectionist policies) was this apparent move to do something about the incredibly inflated prescription drug prices currently paid by Americans.
It should be noted of course that Congress has actually allowed drug importation since 2003, although only if the secretary of Health and Human Services has certified that the drug is safe. Because Canada has its own stringent prescription drug regulations, which have been recognized as in line with that of the United States, these imported drugs are usually regarded as safe.
Why Are Prescription Drugs Cheaper in Canada?
Whether being sold over the counter or via online pharmacies, Canadians do pay significantly less for their drugs, both prescription and otherwise. The reason for this is actually surprisingly simple: the Canadian government ultimately foots the bill for prescription drugs – and it will not do so if a government review board believes the cost is excessive.
This board is known as the Patented Medicine Prices Review Board and is a pseudo-judicial body that has been approving drugs for the Canadian market since 1987. If the price is considered too high, the board refuses to pay and Big Pharma manufacturers are suddenly faced with the prospect of losing the entire Canadian market. In the vast majority of cases, the pharmaceutical companies simply capitulate. In the US, by comparison, the government is not involved in the negotiations that bring drugs onto the market.
It might strike one as odd to hear that the Canadian government wields so much influence over the prices of the drugs in the country; they can effect significant price decrease by simply refusing to pay higher rates. This might seem even odder when you remember that Canada actually has a relatively tiny domestic pharmaceutical industry. Indeed, until Trudeau initiated a somewhat mad scramble for a vaccine contract with domestic companies during the Covid 19 pandemic, Canada’s pharmaceutical sector has had a historically weak relationship with the Canadian government.
Nevertheless, this is precisely the reason why the same prescription drugs as sold in the US are typically much cheaper in Canada, and it is the source of the entire debate on American drug imports.
Will the Mass Important of Canadian Drugs Solve America’s Drug Price Problem?
Ultimately, the importation of drugs from Canada to the United States does not simply eliminate the higher prices hitherto paid by American consumers. If this were the case and there were no strings attached, then the American drug market would be in peril and Canada would be a supplying a substantial proportion of America’s drugs. This is evidently not the case.
It is the absence of a doctor-patient relationship that exists in such situations that most deters Americans from making the leap to American medicine. Without a specific assessment, dosage and course lengths are something that must be “eyeballed”, as it were, by the consumers themselves. This is ultimately why change in America’s drug pricing must come from America itself.