Canada must resist the lure of bulk U.S. drug purchases

by Colin Robertson

The Globe and Mail
April 14, 2017

‘Beware of Greeks bearing gifts” is advice that Canadians should heed on U.S. legislation permitting the bulk purchase of pharmaceutical drugs from Canada for the U.S. market.

At a time when we are about to renegotiate our preferred access for people, goods and services, it makes no sense for Canada to involve itself in this very American controversy.

Vermont Senator Bernie Sanders is the driving force behind a bill in the U.S. Senate aimed to give Americans “Canadian” prices for their prescription drugs. A similar bill was defeated in January (52-46) but not on the usual Democrat versus Republican partisan lines. A dozen Republicans, including senators Ted Cruz, Chuck Grassley and John McCain, voted for the measure.

Americans spend more per capita on health care than anyone else in the world – $9,451 (U.S.), according to the OECD (the comparable figure for Canada is $4,727). Donald Trump and the Republicans were elected, in part, on their promise to abolish Obamacare, and their recent spectacular failure in the House of Representatives only underlines the challenges around U.S. health care.

Groups of American seniors crossing the border to buy drugs or having prescriptions filled in Canada and then sent to them in the United States – this also accommodates Canadian snowbirds – has long been a feature of cross-border “trade.” This will continue. But Canada is not the solution to the United States’ drug-pricing controversy.

Our pharmaceutical industry – innovators and the generics – is stretched providing for the Canadian market. Last year, Health Canada introduced regulations requiring drug manufacturers to report on anticipated and actual drug shortages. There is even a website – Drug Shortages Canada.

Involving ourselves in this American problem would not serve Canadian interests. Given that many of the prescription drugs that Canadians consume are manufactured elsewhere, Canada would simply be a trans-shipment point.

The failure of Canadian authorities to inspect for counterfeits in goods trans-shipped through Canadian ports is a continuing irritant to the United States. With the opioid epidemic in the United States (a problem also in Canada), there is also concern that Canada would become a back door for international drug smugglers. The bulk transfer of pharmaceutical drugs makes no sense. As with the prohibition on the bulk transfer of our water, Parliament and provincial legislatures should act now to prevent wholesalers from exporting drugs in bulk from Canada.

With aging populations in both Canada and the United States, there is only going to be more demand for drugs and biologics that improve and sustain life. This is where Canada and the United States should be co-operating.

It is estimated that, with research, clinical trials and licensing by governments, it takes eight to 11 years and costs almost $3-billion to bring a drug to market. The creators, mostly private companies, deserve a fair return on their investment but pricing must be fair as consumers and their legislators will intervene, as illustrated by the EpiPen controversy.

Innovation is a Trudeau government priority. Innovative Medicines Canada says that there are more than 500 new products in development supported by more than $1-billion in annual research and development. Genome Canada and its provincial partners are making a difference employing using new approaches, such as Open Science, involving the sharing of data and samples.

If health care in the United States is the most expensive in the world, Canada’s is also costly – about 11 per cent of our GDP. Every provincial government is engaged in efforts to bring down health care, which absorbs about 40 per cent of their budgets. More attention needs to be devoted to outcomes. This will require hospitals and health-care professionals to share data and then crunch them so we can see what is working and what can be improved. This is another area where co-operation with the United States makes sense.

In the meantime, let’s not risk our reputation and our own supply to address a “Made in America” problem that must be fixed in America. Mr. Sanders’s “Trojan horse” should be emphatically rejected and the sooner the better. Canada has much bigger stakes in play with our American neighbours.

A former diplomat, Colin Robertson is vice-president and fellow at the Canadian Global Affairs Institute.

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