{"id":14551,"date":"2019-08-22T15:45:39","date_gmt":"2019-08-22T21:45:39","guid":{"rendered":"http:\/\/sites.coloradocollege.edu\/bulletin\/?p=14551"},"modified":"2019-08-26T13:00:18","modified_gmt":"2019-08-26T19:00:18","slug":"canadian-drugs-arent-the-solution-to-high-u-s-prescription-prices","status":"publish","type":"post","link":"https:\/\/sites.coloradocollege.edu\/bulletin\/2019\/08\/canadian-drugs-arent-the-solution-to-high-u-s-prescription-prices\/","title":{"rendered":"Canadian Drugs Aren\u2019t the Solution to High U.S. Prescription Prices"},"content":{"rendered":"
\"\"<\/a>

Kristina M. L. Acri n\u00e9e Lybecker; Photo by Jennifer Coombes<\/p><\/div>\n

Drug importation schemes are again being offered up as a remedy to high U.S. drug prices.\u00a0 Recently proposed legislation in Colorado, Connecticut, Florida, Maine, Missouri, Oklahoma, Oregon, Utah, Vermont, and West Virginia aims to reduce spending on pharmaceuticals by importing them from Canada. Advocates reason that American patients can lower their drug costs by importing cheaper drugs from countries with lower pharmaceutical prices. What escapes their attention is the need for, and cost of, testing to ensure the safety of those imports.<\/p>\n

Why do we need to test drugs from Canada?\u00a0 Under current Canadian legislation, Canada does not regulate, test, or scrutinize drugs bound for export, including export to the United States. If pharmaceuticals are not destined for Canadian citizens, they are not subject to the Canadian government\u2019s safety regulations. This opens the door to two problems:\u00a0 the risk of shortages and the threat of counterfeit medicines.<\/p>\n

First, Canada doesn\u2019t have a sufficient supply of drugs to satisfy American demand. Canada\u2019s population is just one-ninth of the U.S. population. That is, 37 million people, compared to 318 million in the United States.\u00a0 Annually, 627 million prescriptions are dispensed in Canada, while 4.4 billion are dispensed in the U.S. If 100 percent of U.S. prescriptions were filled in Canada, the annual Canadian drug supply would be exhausted in 52 days.[1]<\/a><\/p>\n

Second, Canada already struggles with drug shortages, a problem that would clearly be exacerbated if significant quantities of drugs were sent to the United States.[2]<\/a>\u00a0 Drug shortages have become a chronic problem for the Canadian healthcare system. In a single week during September 2018, 25 drugs were added to the drug shortage list.[3]<\/a>\u00a0 As Canada continues to grapple with a relentless stream of drug shortages, one in four adults in the country has either personally been affected in the last three years or knows someone who has, according to a survey commissioned by the Canadian Pharmacists Association.\u201d[4]<\/a><\/p>\n

Given the size of the Canadian market and the shortages that already exist, one must consider that U.S. patients might not be getting Canadian drugs. Numerous investigational studies establish that many drugs shipped from (or through) Canada actually originate in other countries.[5]<\/a>\u00a0 Former U.S. Food and Drug Administration Acting Deputy Commissioner Randall Lutter testified before Congress, \u201cOf the drugs being promoted as \u2018Canadian,\u2019 85 percent appeared to come from 27 countries around the globe. Many of these drugs were not adequately labeled to help assure safe and effective use and some were found to be counterfeit.\u201d[6]<\/a><\/p>\n

Shortages and the nuances of Canadian legislation provide the opportunity for unscrupulous drug exporters to mark pharmaceuticals as \u201cfor export only,\u201d thereby bypassing Canada\u2019s safety regulations, and enabling them to mail counterfeit or substandard drugs made in China, India, and other countries notorious for ineffective and sometimes deadly products to patients abroad using a Canadian mailing address\u201d.[7]<\/a> \u00a0The evidence is clear: The depth and breadth of the counterfeit drug industry is large and growing. A study by the Organization of Economic Co-Operation and Development showed that counterfeit drugs accounted for 2.5 percent \u2014 or $461 billion \u2014 of the world drug market in 2013.[8]<\/a>\u00a0 A separate study by the World Health Organization estimated that 10 percent of the global pharmaceutical market is counterfeit.[9]<\/a>\u00a0 These findings echo the situation in the United States as well. Notably, the number of investigative cases opened by the FDA has increased more than 10-fold over the past two decades.[10]<\/a><\/p>\n

Beyond the risks, it\u2019s not economically feasible. The presumed savings may be elusive. Nine in 10 prescriptions dispensed in the U.S. are generic. While many branded drugs are less expensive under Canadian price controls, generic drugs are more expensive in Canada than in the United States. [11]<\/a> One estimate calculates the average savings in the U.S.<\/strong> to be 47 percent. [12]<\/a> In addition, pharmaceutical importation would require oversight and enforcement. Colorado would have to invest in substantial infrastructure and chemical testing to ensure the quality and safety of all medicines. In essence, Colorado would have to establish its own Food and Drug Administration. The expense of doing so would be tremendous.<\/p>\n

My work on pharmaceutical importation began with my doctoral studies in economics at the University of California, Berkeley, more than two decades ago. After 25 years studying the economic and health impacts of drug importation, the concept of bringing drugs in from Canada is a familiar proposal and one that seemingly addresses the demand for costly therapies with quick and substantial price relief for patients. The reality of importation is drastically different: it is a risky endeavor and a potentially very expensive gamble. When all potential risks and costs are accounted for, it is difficult to justify moving outside the U.S. supply chain for medicines.<\/p>\n

As Mark Twain once said, \u201cFor every complicated problem there is a simple solution. And it\u2019s usually wrong.\u201d This is the wrong solution. Pharmaceutical importation schemes pose an acute threat to patient safety and should be resisted, in Colorado and on Capitol Hill.<\/p>\n

Acri joined the CC faculty in 2007. Her research analyzes the difficulties of strengthening intellectual property rights protection in developing countries, specifically in the context of the pharmaceutical and environmental technology industries. Recent publications have also addressed alternatives to the existing patent system, the balance between pharmaceutical patent protection and access to essential medicines, the markets for jointly produced goods, and the role of international trade agreements in incentivizing innovation. This essay is based, in part, on Acri\u2019s testimony before the Colorado House of Representatives in April 2019. Her remarks were part of the House hearing on Senate Bill 5.<\/em><\/p>\n

[1]<\/a> Shepherd (2018)\u00a0 http:\/\/www.safemedicines.org\/wp-content\/uploads\/2017\/08\/us-drug-importation-impact-on-canadas-prescription-drug-supply-2471-268X-1000146.pdf<\/a><\/p>\n

[2]<\/a> DrugShortagesCanada. \u201cDrug Shortages Homepage.\u201d Webpost, DrugShortagesCanada.ca.\u00a0 Available here:\u00a0 https:\/\/www.drugshortagescanada.ca\/<\/a><\/p>\n

[3]<\/a> Crowe, Kelly. \u201cIt’s not just the EpiPen. Canada had 25 new drug shortages this week alone,\u201d CBC News, online post, September 8, 2018.\u00a0 Available here:\u00a0 https:\/\/www.cbc.ca\/news\/health\/second-opinion-drug-shortages180908-1.4815355<\/a><\/p>\n

[4]<\/a> Ireland, Nicole.\u00a0 \u201c’Unprecedented’ drug shortages affecting many Canadians, new survey suggests,\u201d CBC News, December 10, 2018.\u00a0 Available here:\u00a0 https:\/\/www.cbc.ca\/news\/health\/canadian-pharmacists-association-drug-shortage-survey-1.4938557<\/a><\/p>\n

[5]<\/a> Gardner, Amanda.\u00a0 \u201c’Canadian’ Drugs Come From Other Countries: FDA,\u201d HealthDay, online post, December 16, 2005.\u00a0 Available here:\u00a0 https:\/\/consumer.healthday.com\/general-health-information-16\/misc-drugs-news-218\/canadian-drugs-come-from-other-countries-fda-529754.html<\/a><\/p>\n

[6]<\/a> Matthews, Merrill.\u00a0 \u201cPrescription Drug Importation: Unsafe, Unnecessary and Unwise ,\u201d Institute for Policy Innovation, online post,\u00a0 June 5, 2017.\u00a0 Available at:\u00a0 https:\/\/www.ipi.org\/ipi_issues\/detail\/prescription-drug-importation-unsafe-unnecessary-and-unwise<\/a><\/p>\n

[7]<\/a> Partnership for Safe Medicines (2017). \u201cBuying Drugs from Canada\u201d, Partnership for Safe Medicines. <http:\/\/www.safemedicines.org\/consumerresources\/buying-drugs-from-canada<\/a>><\/p>\n

[8]<\/a> OECD.\u00a0 \u201cGlobal trade in fake goods worth nearly half a trillion dollars a year – OECD & EUIPO,\u201d online post, April 18, 2016.\u00a0 Available here:\u00a0 http:\/\/www.oecd.org\/industry\/global-trade-in-fake-goods-worth-nearly-half-a-trillion-dollars-a-year.htm<\/a><\/p>\n

[9]<\/a> Williams, LaKeisha and Ellen McKnight.\u00a0 \u201cThe Real Impact of Counterfeit Medications,\u201d Affordable Medicines, June 19, 2014.\u00a0 Available here:\u00a0 https:\/\/www.uspharmacist.com\/article\/counterfeit-meds<\/a><\/p>\n

[10]<\/a> U.S. FDA. \u201cCriminal Investigations Case Activity,\u201d online post, current as of August 30, 2018.\u00a0 Available at:\u00a0 https:\/\/www.fda.gov\/ICECI\/CriminalInvestigations\/ucm123067.htm#drugs<\/p>\n

[11]<\/a> Marwaha, Seema. \u201cThis is why Canada has the second-highest medication costs in the world\u201d, National Post, online post, November 7, 2016.\u00a0 Available at: https:\/\/nationalpost.com\/news\/canada\/this-is-why-canada-has-the-second-highest-medication-costs-in-the-world<\/a><\/p>\n

[12]<\/a> Gooi, M. and C.M. Bell. \u201cDifferences in generic drug prices between the US and Canada,\u201d Applied Health Economics and Health Policy, 2008, vol.6, no.1, pp. 19-26. Available at: https:\/\/www.ncbi.nlm.nih.gov\/pubmed\/18774867<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Drug importation schemes are again being offered up as a remedy to high U.S. drug prices.\u00a0 Recently proposed legislation in Colorado, Connecticut, Florida, Maine, Missouri, Oklahoma, Oregon, Utah, Vermont, and West Virginia aims to reduce spending on pharmaceuticals by importing them from Canada. Advocates reason that American patients can lower their drug costs by importing…<\/p>\n","protected":false},"author":3,"featured_media":14670,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[106],"tags":[52,38],"class_list":["post-14551","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-summer-2019","tag-point-of-view","tag-web-extras"],"jetpack_featured_media_url":"https:\/\/sites.coloradocollege.edu\/bulletin\/files\/2019\/08\/cc-bul-sum19-p32_graphic.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/posts\/14551","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/comments?post=14551"}],"version-history":[{"count":4,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/posts\/14551\/revisions"}],"predecessor-version":[{"id":14743,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/posts\/14551\/revisions\/14743"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/media\/14670"}],"wp:attachment":[{"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/media?parent=14551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/categories?post=14551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sites.coloradocollege.edu\/bulletin\/wp-json\/wp\/v2\/tags?post=14551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}