Florida plans to import drugs from Canada (with President Trump’s approval) and Senator Bernie Sanders will join a diabetic crusade looking for cheap insulin to highlight the evils of the pharma industry. And now a group of respectable Canadian associations is demanding that the government clarify how it will safeguard our already unstable drug supply.
A number of Americans states have introduced legislation to permit importing “cheap Canadian drugs” as a way of lowering costs, ensuring supply, and sending a message to “big pharma.” Some people believe that the so-called “cheap Canadian drugs” might be unsafe; when they point to internet sites, they might be right because many of those web-based sources are not Canadian at all. Other kindly and better informed folk have worried that this action could exacerbate the ongoing drug shortage in this country–as if there are no shortages in USA (there are! lots!).
Referring to our 2018 research on drug shortages, the 25 July 2019 warning letter to Canada’s minister of health is signed by representatives of 15 medical associations, pharmacy groups, and health-care distributors and advocates, led by the Canadian chapter of the Washington-based, international Alliance for Safe Online Pharmacies–Global. The alliance is non-profit, but its members are not, being pharmacies, distributors, and pharmaceutical companies. One cannot help but wonder if they perceive threats to their business model, as well as to the drug supply. Nevertheless, clarity and assurances are a good thing, and I have added import-export to the 16 other robust and (alas) hypothetical causes of drug shortages listed at my website.
But drug shortages are a much older problem than this import-export issue. I have been running my drug shortage website now for eight years, since August 2011. The problem continues unabated–media reporting is inconsistent and incomplete, and consequently, the solutions are merely stop-gap at best because the causes are still obscure. It is a global problem: the website features reports from more than 100 countries. But Canada has been dithering in brownian movement. Unlike the USA, it isn’t even measuring the problem.
One of the much-debated “causes” of shortages is the price of generic drugs — both too high, and too low. Health economists in Canada claim we pay too much for our medicines–but journalists in the United States are convinced that drugs in Canada are “cheap.” Bernie Sanders contends that our low drug prices are owing to medicare– but alas, drugs are not covered in our medicare system–at least not yet. The price differences must lie elsewhere.
But these recent American policy gestures miss the point. First, Canada has almost no drug manufacturing industry of its own. The biggest Canadian generic company– Apotex –manufactures most of its drugs in factories outside Canada. For the rest we buy from American, European and Asian firms — just like everyone else, just like Americans. So what exactly are the “Canadian” drugs?
Second, Canada regulates its industry, as does US FDA, for safety — but unlike the US, Canada does not allow drug companies to raise prices arbitrarily, for example, when shortages arise. Furthermore, firms obtaining a licence to sell medications in Canada have an associated “duty to supply” as part of the contract. While this obligation is seldom policed, it exists as a respected industry standard and can be enforced. Drug companies licensed to sell in Canada must abide by these rules. In exchange, Canada keeps its commitment to drug companies not to sell on the products that it agrees to purchase. In other words, except in individual cases, the drugs available in Canada are at a fixed price, supposedly promised in supply, and not for sale across the border.
So what should the USA and Canada be doing? First, rather than condemning the pharma industry, the USA should be negotiating lower prices– “better deals” (sound familiar?)– with the very same companies who supply Canadian drugs. Second, it should be “regulating” even if it means more of that odious government interference that right-wingers cite as the red-peril threat to free market enterprise: prices should be fixed and duty-to-supply respected. Essential medicines are not like commercial widgets — or at least they should not be treated that way. Third, if drugs are in short supply, why go poaching? Why not make more? And what does this current political babble have to do with the launch of the creative and growing American non-profit Civica Rx ? Rather than objecting to international trading, why doesn’t Canada likewise begin making the drugs that we need with generic companies of its own?
As for the political stunts– e.g, dozens of Minnesota patients coming to buy their drugs in London, Ontario, or Senator Sanders looking for insulin in Windsor–they are just that, stunts intended to grab the fickle media spotlight for personal advantage. And they are misguided. Busy and ethical Canadian physicians generally will not write prescriptions for anyone without an examination, and whatever the visitors can manage to acquire will not make a great deal of difference to our own already stretched supplies.
Instead, we should all be urging Canada, the United States, and other nations to manufacture more of the needed drugs at reasonable prices and to engage in an international project–perhaps through the OECD or the WHO or the WTO–to investigate the drug industry, the supply chains, the middle managers, and the outrageous variations in prices, and to thereby uncover the causes of the drug shortages. Only then can we hope to fix them.
UPDATE March 2020
Comment from Government of Canada on proposed FDA rule re importation of drugs [it is opposed], Canadian Embassy Washington DC, 10 March 2020.