Canadian Drugs

One of the fastest growing expenses in American health care has been the cost of pharmaceuticals. A combination of new pharmaceutical innovation, huge drug company marketing budgets and vigorous consumer demand for new brand name drugs as a result of those marketing efforts are some of the major driving factors in rising costs.

Premium increases with simultaneous and significant benefit decreases have made American health care consumers feel the pinch.

Millions of Americans have turned to the “re-importation” market in recent years, most notably to the Canadian market.

Here’s Why:

In order for European and American drug companies to have access to the Canadian pharmaceutical market, the Canadian government has mandated that these companies provide Canada’s pharmacies huge wholesale discounts on prescription medication.

The pharmaceutical companies, realizing that it is better to have access to this market then to not, play ball with the Canadian government. The economics of Canada’s “single payer” health care system necessitate these kinds of bargaining tactics.

As the Canadian pharmacies making the purchases are private enterprises, they can buy in quantities that far exceed what’s necessary to satisfy the Canadian market. Their excess stock is then “re-imported” for resale to the country of initial distribution, in this case the U.S.

As the acquisition cost for the drugs is so comparatively low to the cost that US based pharmacies pay, Canadian pharmacies can significantly undercut US pharmacies and still make a tidy profit through Internet based mail order distribution. Savings to US consumers can be as high as 70%.

But is it safe?

Assuming you are dealing with a reputable Canadian pharmacy and not an unscrupulous Internet vendor posing as one, safety should not be a concern.

Pharmaceutical companies are understandably upset by this state of affairs and have used their considerable resources as of late to spread scare stories and make largely unfounded claims of the compromised purity, potency and in some cases, safety of these medications.

Again, assuming one is dealing with an established and reputable pharmacy based in Canada, the drugs you are purchasing are the very ones the aforementioned drug companies are manufacturing in their own factories!

Is it Legal?

The FDA’s position on re-importation has been unequivocally hostile. At the same time, enforcement has been virtually non-existent against consumers and vendors alike. Many suspect that the FDA’s opposition to re-importation is largely a political one; re-importation bypasses FDA authority over retail sales and upsets politically powerful US drug companies.

Until the FDA drops the hammer on enforcement, and they may never do so, this will remain a legal grey area for American consumers.

How Long Will it Last?

Like most good things, bargain Canadian drugs for American consumers will probably eventually come to an end.

One working theory as to why the current situation has persisted for as long as it has is that the very high prices Americans and their insurers have paid for drugs have helped subsidize the world market for those drugs. In effect, the only way pharmaceutical companies can make deals with “single-payer” markets like Canada is because their profits are high enough in the huge US market to make up the difference.

If there is truth to this theory, we would eventually see wholesale drug pricing equilibrium between two neighboring First World countries like the US and Canada and the benefits of re-importation to American consumers would cease.

Lucent Insurance Services does not endorse any specific Canadian pharmacy, nor do we have any type of financial interest in drug re-importation. However, we take the position that the already heavily burdened American health care consumer has every right to extract as much value as possible from the options available to them. For the time being, we view Canadian drug re-importation as a safe and effective cost saving strategy for health care consumers.