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A perspective on US drug reimportation.

THE HIGH COST OF PRESCRIPTION DRUGS IN THE UNITED States receives media attention almost daily. In the past year, one third of Americans say that they or a family member has had difficulty paying for medications. A similar proportion has not filled a prescription or has reduced a prescribed dosage because of high out-ofpocket costs. In response, Americans are turning to cheaper sources for their prescription drugs. Canadian pharmacies are a logical choice because, partially as a result of governmental controls, prices for many of the most widely used drugs are substantially lower in Canada. A recent survey of US consumers found that 7% have purchased medications from pharmacies in Canada or another country and 16% of individuals with annual out-of-pocket drug expenditures over $1000 have done so. Moreover, 73% of Americans older than 50 years would consider buying drugs from Canada or another country if this were feasible. Many of the brand-name drugs sold in Canadian pharmacies are produced by US manufacturers. When they are purchased by Americans these drugs are technically being imported back into the United States; therefore, this practice is known as “reimportation.” Municipal and state governments throughout the United States have begun establishing programs to help Americans buy drugs from Canadian sources with the expectation that these programs will result in substantial savings. For example, Minnesota’s program, which allows state employees and their dependents to obtain certain prescription drugs from Canadian sources with no out-of-pocket costs, is estimated to save the state $1.4 million by the end of 2005. More dramatically, if all prescriptions for participants of Illinois’ employee and retiree health benefits program were to be filled from Canadian sources, the state estimates that it could save more than $90 million annually. The US Food and Drug Administration (FDA) opposes the practice of drug reimportation on the grounds that it is unable to ensure the safety of Canadian medications. In addition, drug companies oppose reimportation because they stand to lose profits and argue that reimportation will eliminate incentives for research and development (R&D). Some drug companies have restricted the quantity of drugs supplied to Canadian pharmacies that sell to Americans and others have threatened to follow suit. While this has successfully forced some Canadian pharmacies to stop supplying US customers, it has also prompted a seniors’ federation in Minnesota to bring an antitrust lawsuit against 9 drug companies. The suit alleges that by restricting supplies to some Canadian pharmacies, the companies are forcing US consumers to buy drugs in the United States at unlawfully inflated prices. The implications of drug company practices for Canadians are potentially profound—not only does limiting supply threaten access to drugs, it may also drive up their cost. As a result, Canadian advocacy groups have called for a ban on online pharmacies that sell drugs to Americans. The purpose of this article is to provide a perspective on the cross-border drug debate. Our 3 specific objectives are to demonstrate that the safety concerns raised by the FDA appear to be unfounded in the case of Canadian imports; to discuss how importing drugs from Canada will not necessarily threaten R&D because drug company profits are large; and to outline what the Canadian government’s response to reimportation might be and, thereby, to demonstrate why reimportation is a poor policy choice if America’s goal is to reduce costs.