February 17, 2005

NO FREE DRUG LUNCH:

Canada wants to stem flow of cheap prescription drugs (Nick Perry, 2/17/05, Seattle Times)

In an interview, Canadian Health Minister Ujjal Dosanjh said he is considering several measures that would rein in sales to the U.S. [...]

Prescription drugs are generally cheaper in Canada because of strict price controls and the lower Canadian dollar. Drug prices in the U.S. are among the highest in the world — a premium that drug makers say is necessary to recoup research-and-development costs.

Some people expect drug companies to try to protect their lucrative U.S. market by pressuring Canada into raising prices or cutting supply if the cross-border trade is not stemmed. That would prove expensive for Canadian government agencies that provide drug benefits in health plans.

Dosanjh said drug companies in recent months have already been raising prices, within the range allowed by price controls.

"That pricing regime is very dear to us," he said. "If our prices go up significantly, the provincial treasuries and federal treasury will suffer expenditures of hundreds of millions of dollars, perhaps billions.

"The other thing, of course, is that we are a small country of 30 million people, and we cannot be the drugstore for 300 million Americans. The solutions for your problems lie within your borders."


Even the Canadians can figure out it's a bad deal for them to subsidize our drug costs, but the question is whether restrictions are compatible with free trade rules. It could be that Democrats who are pushing these drug plans will destroy socialized medicine everwhere rather than bring it here--a delightful irony.

Posted by Orrin Judd at February 17, 2005 7:37 AM
Comments

they're already going to pour 41 billion loonies into the program.

I'm surprised it took this long for someone to notice.

Posted by: Sandy P at February 17, 2005 11:54 AM

There's no need for Big Pharma to cut supplies, simply not increase them.

Posted by: Annoying Old Guy at February 17, 2005 3:20 PM
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