NCPA - National Center for Policy Analysis


February 11, 2005

Canada is taking measures against drug re-importation because it reduces the availability of pharmaceuticals and raises prices for Canadians, says Sean Higgins of Investor's Business Daily.

Due to immense market size differences, Canadian Health Minister Ujjal Dosanjh says "Canada cannot be the drug store for the United States." Relying on a smaller market to provide drugs to the United States has caused shortages:

  • Canada's total population is about 33 million, far smaller than the United States' 295 million.
  • A 2004 Canadian Pharmacists Association survey found that 80 percent of the nation's pharmacies surveyed had had shortages.

Already, the Canadian government is cracking down on doctors who co-sign for prescriptions without seeing the patients directly. It is also expected to enact tougher regulations on Internet sales, such as quotas. Clearly, such moves will weaken sales of the online pharmaceutical industry, says Higgins:

  • Some 1 to 2 million Americans cross the border every year to buy Canada?s price-controlled drugs.
  • In 2004, it is estimated that the cross-border trade in pharmaceuticals amounted to $700 million in sales.

With Canada clamping down on the industry, both Americans and online pharmacies are now looking to import from other English-speaking countries with price controls.

Source: Sean Higgins, "Canada Considers a Crackdown on Drug Resales to Americans," Investor's Business Daily, February 3, 2005.


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