Trump’s ‘Crazy’ Drug Import Plan Stirs Backlash in Canada

(Bloomberg) -- Bernie Sanders and Donald Trump have arrived at the same conclusion on at least one thing: a way for Americans to get the drugs they can’t afford is to buy them in Canada.

The response from outraged Canadians? Just say no.

“It’s crazy,” said Jacalyn Duffin, a medical historian and professor emerita at Queen’s University who doesn’t receive funding from the pharmaceutical industry. “He should be finding out why Americans have to pay more than Canadians to buy the same drugs from multinational companies.”

The Trump administration’s “safe importation action plan” published on Wednesday plans to authorize pilot projects from states, wholesalers and pharmacists to import versions of FDA-approved medicines from Canada. Three days earlier, Sanders, the Democratic leadership hopeful, had accompanied a group of American diabetes patients on a border hop to purchase insulin at a small pharmacy in Windsor, Ontario, near Detroit.

The U.S. government doesn’t directly regulate medicine prices, and drug companies can more or less set whatever price the market will bear. By contrast, in Canada, a federal tribunal sets a maximum price for patented drugs based upon a comparison of prices in seven industrialized countries.

Price Controls

“The U.S. does not have any system of such controls -- that is a problem, but it’s not Canada’s problem,” said John Adams, who chairs Best Medicines Coalition, an organization that lobbies for better access to medicines in Canada and receives funding from drug companies.

It’s not clear whether the bulk export of drugs from Canada would even work -- much less make sense.

Under Canada’s drug licensing program, pharmaceutical companies agree to sell products at a fixed price and to guarantee supply. In exchange, Canada commits to not sell on the products it purchases across the border, said Duffin. And while those are federal rules, health and drugs fall under the purview of provincial governments who have “zero interest” in not having drugs available for their own citizens, she said.

“Who is going to sell it to them?” she said. “I don’t think any hospital is going to start selling its drugs when it’s already scrambling to keep its supplies. Or is it going to be the same pharmaceutical companies that are selling them their drugs at an inflated price?“

Furthermore, the price of generic drugs in Canada isn’t any cheaper than in the U.S. because generics don’t fall under the federal pricing system, added Adams. “We have some of the most expensive generic prices in the world.”

‘Foreign Freeloading’

Trump abandoned a politically fraught effort to end a system of drugmaker rebates to middlemen that critics contend help keep list prices high. In a tweet Wednesday, Health Secretary Alex Azar called the new import plan the administration’s next step “to address foreign freeloading and lower the cost of drugs for Americans.”

To Canadians, the foreign freeloading is happening on the other side.

“Hospital and community pharmacies in Canada are resourced to serve the Canadian public,” the Canadian Medical Association and 14 other groups said in their letter to Canada Health Minister Ginette Petitpas Taylor last week. “They are not equipped to support the needs of a country 10 times its size without creating important access or quality issues.”

Encouraging Americans to look for cheap Canadian imports could also spur the growth of illegal online pharmacies misrepresenting themselves as licensed Canadian pharmacies -- as it is, 600 new illegal pharmacy sites launch every month, the letter said.

Already, calls are growing for the Canadian government to push back. The Canadian Pharmacists Association said it’s “calling on the federal government to clearly express its opposition to U.S. drug importation, and immediately develop an action plan to respond to these proposals including restricting exportation of drugs from Canada to the U.S.”

Sarah Dion-Marquis, a spokeswoman for Innovative Medicines Canada, said, “we would welcome a public statement from the Canadian government confirming that it will take appropriate action to help protect Canadian supplies in the event of a potential shortage.” Innovative Medicines is an Ottawa-based lobby group representing many global drug firms, including Pfizer Inc. and Eli Lilly & Co.

$240 Versus $24

“$240 in Michigan for this vial, $24 in Canada,” Sanders had said on Sunday, as he held up a small glass bottle of insulin at the Olde Walkerville Pharmacy in Windsor, which lies across the river from Detroit. “The American people are going to have to be thinking long and hard about the greed of the pharmaceutical industry and the corruption and price-fixing which is going on in the United States.”

The irony is that Canada’s healthcare system isn’t without its problems -- it’s just that the dysfunction in the U.S. often helps cast a rosy glow over them.

Canada is the only country in the world with universal health care that doesn’t provide universal drug coverage. The country spent C$34 billion ($26 billion) on prescription medications in 2018, the third highest in the world on a per capita basis, a panel advising the federal government said in June.

Prime Minister Justin Trudeau is pushing for some change with a universal public pharmacare program that would reduce the amount that Canadians pay for prescription drugs by C$5 billion. It’s an issue that’s expected to feature prominently in his reelection campaign in the runup to the October vote.

“Health Canada has always, as a matter of course, ensured that regardless of external or international pressures there is a steady and solid supply of medications that Canadians need,” Trudeau told reporters in Iqaluit, Nunavut. “Our priority is always ensuring that Canadians have access to the medication they need at affordable prices.”

He added that the U.S. interest was a point of pride, calling it a “good thing” that the country was noticing the benefits of the Canadian system.

“It’s pathetic that President Trump feels so weak that he needs to raid the medicine cabinets of Canadians in order to solve a problem that exists in the U.S.,” said Adams. “There aren’t enough supplies in Canada to meet the needs of Americans.”

--With assistance from Stephen Wicary.

To contact the reporters on this story: Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.net;Simran Jagdev in Toronto at sjagdev1@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Carlos Caminada

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