Healthy Skepticism Library item: 1468

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Cassels A.
Is Big Pharma pulling Canada's chain?
The Globe and Mail 2003 Oct 30

Full text:

It’s as if there were a sign outside Tunney’s Pasture, Health Canada’s home in Ottawa, that reads, “Gone Fishing.” For as pressure mounts from American pharmaceutical manufacturers for Canada to stop selling our cheaper drugs to Americans via the Internet, Health Canada is casting for evidence that the cross-border trade may be causing drug shortages here at home.

But Health Canada officials might as well stow their rods; they’ll only find red herrings. The fact is that despite repeated warnings of the disaster that will befall Canadians when angry U.S. drug companies restrict their supply of drugs to Canada, no one has produced such evidence. Nor are they likely to.

Canadians can ignore “the sky is falling” pronouncements about shortages in our pharmaceutical supply — because at the end of the day, money talks. And multinational drug companies are still extremely profitable in Canada.

Will Big Pharma companies restrict their supply of billions of dollars worth of product to Canada because a tiny portion gets sold back to U.S. customers at lower prices? Given that logic, U.S. pharmaceutical manufacturers would have to restrict supply to every country that has cheaper prices and Internet connections — which means most of the world.

The main issue here is visibility and precedent. Earlier this year, there was news of a leaked U.S. pharmaceutical manufacturers’ document which said the industry was earmarking $1-million (U.S.) to “change the Canadian health-care system.”

Well, what we’re seeing now is that lobbying money at work. As long as there are large price discrepancies between our two countries, Canada and our policies will naturally be in the crosshairs of the U.S. drug-makers. Before we allow our federal health agency out on another fishing expedition, let’s remember that this latest red herring swims alongside a large school of equally fatuous pseudo-warnings issued by federal health regulators on both sides of the border.

Because U.S. citizens are paying some of the highest prescription drug prices in the world, they naturally turn to the Internet for cheaper options. Canada is a relatively trustworthy neighbour, with some good recent history of supplying cheaper branded drugs to seniors living along the border, so we’ve become the pharmacy of choice.

And not just for individuals: The governors of Minnesota, Illinois, Iowa and Wisconsin have all announced that they want to import cheaper medicines from Canada, thereby saving state budgets and taxpayers millions. Illinois Governor Rod Blagojevich estimates that his state could save as much as $56.5-million a year on prescription drugs for state employees and retirees by reimporting American-made drugs from countries with cheaper prices.

Ah, ask critics, such as the U.S. Food and Drug Administration, are those drugs safe? And who will pay for the research and development of future medicines if U.S. pharma loses too much revenue?

More red-herring distractions. The fact is, most American brand-name drugs, when they aren’t made in places like New Jersey, come from places like Puerto Rico, usually using the same processes, quality standards and safeguards as U.S.-based manufacturers. If a drug becomes “unsafe” every time it crosses a border, then U.S. citizens should be concerned about their entire drug supply.

What about the fear that Canadian-style price-controls could inhibit the development of new drugs? Drug-industry supporters call countries that control drug prices “parasites.” The industry often says that those paying cheaper prices are being subsidized by U.S. research and development, which is in turn funded by high U.S. prices.

This argument might hold some water, were it not for the fact that the U.S. drug industry spends about three times more money marketing its products than researching them in the first place. Here’s a reverse question: Should Canadians be subsidizing Americans’ habit of being bombarded by drug ads?

What Health Canada ought to do is go fishing for evidence that U.S.-style drug ads are being unleashed here in our country. They may catch more than they bargained for.