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The Globe and Mail


Our Prescription Drug Supply In Danger? Take A Pill

January 17, 2007

By David Gratzer

For millions of people, it's as much a part of the morning ritual as jumping into the shower or enjoying a cup of coffee: taking their medications. Based on the latest warnings from a coalition of pharmacists and pharmaceutical distributors, these Canadians should be in a panic, savouring the taste of even the most bitter of their pills, since new U.S. legislation could soon make these drugs unavailable. But here's a second opinion: Don't worry, the supply is safe.

Responding to a bill proposed by several U.S. congressmen, the Canadian Pharmacists Association, the Ontario Pharmacists' Association, the Best Medicines Coalition, and the Canadian Association for Pharmacy Distribution have written to Health Minister Tony Clement and called for "an immediate ban on the export, both bulk and retail, of prescription drugs from Canada." What would drive sober members of these Canadian organizations to collectively fret over a U.S. congressional bill that hopes to bring Canadian—and European and Australian—medications to the United States?

The issue is not that Canadians have better drugs, since most pharmaceutical patents are held by American companies. It's about money: The U.S. has practically no price controls for pharmaceuticals; every other Western country does. By bringing the latest lipid-lowering drug or antidepressant from Canada across the border, the aim is to import Canadian prices. Thus, Americans could get their own pharmaceuticals at our discounted rates.

That may prove a good deal for Americans, but what about us? For the signers of the letter to Mr. Clement, the answer is clear. "This American legislative proposal poses an imminent and serious threat to the security and integrity of Canada's drug supply, and hence a serious and genuine threat to the health and well-being of Canadians." Those words are strong—and bombastic. Consider: Much legislation proposed in the House of Representatives dies before a vote. Just last month, Democrat Cynthia McKinney sponsored a bill calling for the impeachment of President George W. Bush. No need, however, to unload your Bush memorabilia on eBay—the bill died on the order table, never having been voted on.

Even were such drug importation legislation to clear the House, it would still need Senate and presidential approval—no easy feat. Democrats have enthusiastically called for the importing (or reimporting, as they call it) of Canadian pharmaceuticals for years. In fact, such a bill passed Congress 42 months ago—only to be struck down by the presidential pen. It's unlikely such legislation could clear the Senate today, and certainly it would face the same veto.

So, should Canadians be concerned? Even in the unlikely event of passage, such congressional action will not affect our drug cabinets. Proponents of importation have been careful to champion cheaper drugs for the United States, but not at the expense of others. The 2003 bill, for example, contained a clause forcing companies to provide sufficient supplies to Canada in order to supply both countries.

Here, though, we come to the larger issue. For every dollar of profit to the pharmaceutical industry, more than 50 cents comes from the U.S. market—American drug costs essentially cover the majority of the incredible expense of creating the next new drug. Our socialist compassion, in other words, is made possible only by American capitalism—and, in the meantime, we're free-riding on their generosity. That's fine so long as American consumers are willing to pay the bulk of the world's cost of research and development. But what if they were less generous?

With health costs rising quickly—spending is forecast to double in the next seven years—the United States may one day give in to the temptation of our price controls, undermining R&D there, and thus everywhere.

What to do? At international trade meetings, American representatives have raised the issue, only to be dismissed by negotiators from other Western countries. Canada can take a leadership role: We can promote a loosening of price controls so that the cost of development is better distributed across the West. For countries such as Canada, the total burden would be relatively light; collectively, we'd be less dependant on the United States and less likely to ruin pharmaceutical innovation for us all.

That's a position much less dramatic than the one adopted by the Canadian Pharmacists Association and its colleagues—but it would prove a better prescription for the industry.



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