Health·Second Opinion

'Under threat': Why experts say U.S. import of Canadian drugs could put supply at risk

U.S. President Donald Trump is calling for quick action to allow Canadian drugs to be imported into the U.S. But experts say the move has the potential to put our drug supply at risk of further shortages in the future.

U.S. has the highest drug prices in the world — and importing Canadian drugs would be cheaper

Donald Trump called on U.S. Health Secretary Alex Azar this week to speed up efforts to allow for cheaper drugs to be imported from Canada. (Leah Millis/Reuters)

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U.S. President Donald Trump is calling for quicker action to allow Canadian drugs to be imported into the U.S. But experts say the move has the potential to put our drug supply at risk of further shortages in the future.

On Monday, Trump called on U.S. Health Secretary Alex Azar to speed up efforts to allow for cheaper drugs from Canada, after the U.S. Department of Health and Human Services began taking steps last July to allow states, wholesalers and pharmacists to import some drugs from Canada.

"We've never been under threat in this way before," said Dr. Sandy Buchman, president of the Canadian Medical Association (CMA).

"We're only about a 10th of the size, so any kind of raiding of our drug supply is really going to have a major impact."

Why does the U.S. want to import Canadian drugs?

Canada, like most other industrialized countries, has price controls in place over drugs. But the U.S. does not, leaving their drug prices to be set by pharmaceutical companies.

U.S. presidential hopeful Bernie Sanders travelled to southern Ontario this summer on an "insulin caravan" with a group of people with diabetes in order to purchase the drug more cheaply.

In the U.S., the average cost of a vial of insulin is about $340 ($450 Cdn). In Canada, the same vial will be about $30. 

The CMA was one of 15 groups representing patients, health professionals, hospitals and pharmacists that warned Health Minister Ginette Petitpas Taylor of the potential for increasing drug shortages due to U.S. importation. 

Drug shortages already have a "detrimental impact" on the delivery of patient care in Canada, Buchman said, and the U.S. is interested in our supply because they pay some of the highest drug prices in the world. 

Bernie Sanders is shown in Windsor, Ont., with Hunter Sego and his mother, Kathy Sego. The Americans were part of an 'insulin caravan' to Canada this summer. (Martin Trainor/CBC)

"I think it's seen as a quick and easy solution. Because our drug prices are cheaper than in the U.S., because they don't put any kind of controls on their drug prices," he said. 

"Just the size of the U.S. and what potentially they could do — I think that's very frightening for a lot of Canadians.… It's kind of like a storm coming. How bad a storm is it going to be? Is it going to be a major hurricane, or is it going to be downgraded?"

The federal government's Patented Medicine Prices Review Board (PMPRB) assesses the price of a medication when it comes onto the market and compares it with similar drugs before determining if it's priced too high. 

In 2017, Canadian drug prices were lower than prices in Switzerland, Germany and the United States, but higher than prices in the U.K., France, Italy and Sweden.

"The U.S. needs to step up and decide if they want affordable medications for their citizens, or if they want the market to decide the prices," said Barry Power, senior director of digital content at the Canadian Pharmacists Association (CPA). 

"And if they want affordable medications, they need to put some kind of control in place."

How many drug shortages does Canada face? 

Canada currently faces shortages of close to 2,000 medicines, according to Drug Shortages Canada, a third-party website put in place by Health Canada in 2017 for pharmaceutical companies to report shortfalls. The database lists everything from EpiPens, to antibiotics, to chemotherapy drugs.

But some experts say more needs to be done to flag potential shortages so that hospitals and pharmacies can prepare in advance.

"There's pretty much nothing that you can name that hasn't been affected by a drug shortage in the last year," said Power. 

"There's not a really clear system to notify pharmacists and physicians when something is in short supply. Often a pharmacist will find out about it when they try and order it from their wholesaler."

A CPA survey released earlier this year showed pharmacists spend about a day-and-a-half per week managing drug shortages, while one in four Canadians said they were personally affected by a shortage in the past year or know someone who was.

"A big concern that we have is the amount of time that it's taken from the health-care system and the inconvenience that it's causing to patients," Power said. 

"Some of it has potentially very serious consequences, like in the case of cancer medications. In other cases, it's more of an inconvenience for everyone and it's taking up a lot of time that could be spent providing different kinds of care to people."

What causes drug shortages in Canada? 

There are numerous factors that can lead to drug shortages in this country, including a lack of chemicals in the manufacturing supply chain, pharmaceutical companies discontinuing certain drugs, global demand for drugs, lower prices for generics and even changes in clinical guidelines

Another reason is that Canada no longer has a viable drug manufacturing industry, meaning we buy almost all of our drugs overseas, making us extremely vulnerable to supply changes in those countries. 

"Canadian pharmaceutical manufacturing has tanked over the last decades and we, like the Americans, buy our drugs from other companies offshore," said Dr. Jacalyn Duffin, a medical historian and drug shortages expert at Queen's University.

"What the Americans need to do is what we do — and that is negotiate better prices from the European, Indian and Chinese companies that we're buying from. All of us."

Canada's drug manufacturing industry saw massive layoffs close to a decade ago, mostly due to expiring patents or cheaper competition from other countries, Duffin says, making the industry almost non-existent here now. 

"Very few of our drugs are actually made in Canada and that includes the drugs that are owned and sold by Canadian companies," Duffin said.

"They license factories and other countries, and so the idea that there are cheap Canadian drugs that can be bought is a little bit ludicrous from that perspective."

Currently, Canada has the third-highest drug prices in the world among Organisation for Economic Co-operation and Development (OECD) countries, behind only Switzerland and the U.S. Buchman says countries with national pharmacare plans, such as New Zealand, pay a quarter of the cost for some drugs than we do.

"There are few countries that are higher," Power said. "As with so many things in health care, we look really good because we're beside the United States."

What can be done?

The answer to that lies with the federal government and Canadian drug manufacturers themselves. 

Apart from introducing legislation to tackle the issue, or reigniting the drug manufacturing industry in this country to start making our own drugs again, the answer isn't clear. 

"I think there's no shame admitting there's a mystery to it that needs to be solved and admitting that Canada could it," Duffin said. "Why don't we start making these drugs?"

The effect of the U.S. importation of drugs on Canada's drug supply won't be known until — or if — it happens.

But Buchman says Health Canada is actively looking into the issue with the recent creation of a steering committee on drug shortages, something that gives him confidence.

"I think they are as concerned as we are at the CMA about the serious disruption [and] the impact that this can have."


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