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U.S. to set up plan aimed at allowing prescription drugs from Canada

169 points by ilamont 7y ago

zackmorris 7y ago
I don't have confidence that the Trump administration will pull this off, because I watched the George W Bush administration punt it in 2002: https://www.nytimes.com/2002/07/18/us/plan-import-drugs-canada-passes-senate-but-bush-declines-carry-it.html https://www.nytimes.com/2002/07/18/us/plan-import-drugs-cana... The real reason that prescription drug prices in the US don't match the prices seen in other countries is that patients in the US have no leverage in demand like that seen in supply. When a market has a power imbalance where the producer has a near-infinite production capacity (drugs cost infinitely less to manufacture than discover) and monopoly protections (pharmaceutical patents), then the consumer is at the whim of the producer and will eventually/inevitably pay whatever price the producer demands. This is econ 101 stuff. What we need is an advocate to organize consumers so they have leverage over producers and can set a bulk price. This would also work in any industry that has a natural monopoly like water, electricity or (gasp) telecommunications: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly Note that we aren't talking about why electricity costs $10 per kilowatt hour, because decades ago we didn't have the "government is bad" mentality introduced by the Reagan administration, so Carter was able to form the US Department of Energy (and really various energy commissions had made the electrical grid part of the commons decades before that). So this proposal of importing prescription drugs (whether it happens or not) is only looking at the supply side, and for the reasons I listed above, will certainly fail eventually. The reason the rest of the world is eating our lunch is that they have no qualms about bolstering the demand side. That may mean: using a single-payer system instead of insurance companies, limiting the prices of key drugs, regulating pharmaceutical companies at a deeper level than what is done in the US, producing drugs at the state level (whether they're patented or not), or some combination of these and other measures that put consumers on an even playing field with producers. Now, we could look at US insurance companies as being an advocate to keep drug prices down. But someone realized decades ago (indeed, as early as Nixon's Health Maintenance Organization Act of 1973), that a pool of money that large is ripe for exploitation and corruption. It was predicted very early on by (labor/leftists/Keynesians/socialists/radicals/insert boogeymen here) that we would find ourselves in the situation we're in now. It's just that wealth inequality wasn't at nearly the levels we see today, and older folks from the WWII generation felt a certain patriotic duty to rip off the rest of the world instead of their fellow Americans, and we still had a manufacturing base in the US so we didn't fall into these zero-sum games of squeezing profit from stone. Ok that last paragraph was fairly opinionated on my part. But as the influencers of the tech world, you owe it to yourselves to be informed and know the history of this stuff so that you don't get distracted by the dilluted messaging that keeps people ignorant and divided. Stick to first principles, use critical thinking skills to discern where power imbalance leads to corruption, and find a way to convey what you have learned to people hungry for insight. For me that's the basic supply/demand dichotomy and how it breaks down in natural monopolies, but maybe there are better hacks out there.
mirimir 7y ago
OK, so I live in the US. And I take lots of drugs. Some of which are priced obscenely. So I buy some drugs through online pharmacies, and it's mailed to me. Mostly from Asia.
robomartin 7y ago
Every time I watch or read a debate on US healthcare issues the debaters conveniently ignore a reality that every single entrepreneur dealing with physical products is keenly aware of: Cost drivers Doing business in the US is very expensive. In the case of pharmaceuticals we have high regulatory costs and, perhaps worst than that, high legal costs. If you want to develop and sell a medical device in the US you have to accept the fact that it will take a ton of time and money to deal with the FDA. Not trivial, at all, even for relatively simple products (say, basic hearing aids). Worse than that, once you enter the market you have to expect the near certainty of having to face one or more nasty lawsuits. Medical product manufacturers, be it drugs or hardware, get pounded with lawsuits. From someone manufacturing a simple cane to prescription drugs. Lawsuits are so common most companies have complete legal departments on staff. Given that reality, yes, definitely yes, there will be a difference in cost when selling drug A in the US vs. Canada, Peru or Italy. No question about it. Yet, during debates between politicians all we hear about is how changing health insurance in one direction or another will reduce healthcare costs. That's just nonsense. It has to start with tort reform and educational loan reforms that reduce the cost of education. A doctor graduating with $300K in debt has no choice but to charge very high fees for his or her services. Now fill a hospital with people with multi-100K student debt and see if you can lower operating costs. Add to that an expensive regulatory framework and even more expensive legal landscape and the answer is simple: You can't. It doesn't matter how you twist and contort health insurance. If the underlying cost structure is high, no amount of magic hand waving is going to make things better. That's our problem. There's an asymptotic lower limit to what medical professionals have to earn in order to have a life. And there's another asymptotic limit to what the entire medical industry service and supply chain, from component suppliers to OEM's, doctors and hospitals have to charge in order to deal with regulatory and legal costs. Pretending none of this exists while talking about health insurance is kind of silly. If you bring prescription drugs in from abroad, it will not take long until a MOAL (Mother of All Lawsuits) costs someone a ton of cash and imported drugs become just as expensive as anything else gotten locally. Nobody seems interested in addressing the real issues, probably because he political value isn't as clear as beating on the low hanging fruit, even when this will fix nothing. Ever wonder why we've been talking about healthcare reform for decades and nothing ever really changes? Well, now you know.
OrgNet 7y ago
Like it or not, the Trump administration has good ideas
crb002 7y ago
Or change Medicaid rules to price compare a company's drugs globally as by law they have to offer Medicaid their lowest price.
mwambua 7y ago
I should probably do the research for myself, but is there a simple explanation for why it's easier to allow importation from Canada than to lower domestic prices in the US?
- maximente 7y ago
  i think companies can charge a lot more because individuals can't import from abroad, so this is an important step on that path
  - alex_anglin 7y ago
    ... until the supply to Canadians becomes affected, making the government impose export restrictions.
    - oarabbus_ 7y ago
      It's beneficial to both parties once that point is reached.
    - londons_explore 7y ago
      Drug companies might stop selling in canada entirely to protect US profits.
      - asark 7y ago
        Drug companies only have any kind of exclusivity or advantage at the pleasure of governments. They can't go too long playing hardball or countries will just start ignoring their patents.
  - rtkwe 7y ago
    Canada doesn't get lower prices because they can import drugs as individuals. They get such low prices because the Canadian government is the insurance for the whole country and has the negotiating power to actually get lower prices out of drug companies. Medicare part D in the US can't even actually negotiate for lower prices in the US! Allowing import from Canada is just a bandaid to make it seem like they're doing something about the actual problem and will only work as long as we assume the supply of Canadian drugs can absorb both it's own demand and the US demand.
testplzignore 7y ago
How is this different than the existing importation of generic drugs from places like India? Is it that this is cutting out the US middleman in the transaction?
ilaksh 7y ago
Why not Mexico also? I'm guessing racism or people will say they are fake drugs. Since I moved to Mexico about 10 months ago my health problems have been treated with Mexican-bought medication only and my symptoms have not gotten any worse. Except for when I run out and need to get more. I mean there are places like Walmart, some pretty large pharmacy chains, etc. It seems like people would not tolerate a significant amount of counterfeit medication.
- nullwasamistake 7y ago
  Northern Mexico is super dangerous so realistically you would have to fly. And I don't think the TSA will like you carrying a multi year supply of meds back to US
  - ilaksh 7y ago
    I live in Tijuana and it's actually not super dangerous unless you go to a bad neighborhood. Sure, relatively statistically speaking, there is a higher chance of something bad happening. But it is still a very tiny chance if you stay within nice neighborhoods and are just trying to buy medication. By the way, unfortunately the only part that of Tijuana that a lot of Americans see is the one designated for maximum debauchery and is one of the worst neighborhoods. The pharmacies right by the border are fine, but if you want a nicer area, walk across the PedWest crossing and stand in the Uber waiting area for an Uber to go to Playas. Then you can go somewhere like Farmacias Roma or Farmacias del Ahorro or a bunch of other nice stores with people wearing lab coats. You could also just go to Walmart for medication if you want but recently they seem to be missing basic things I needed so they probably aren't the best.
    - technobum 7y ago
      This morning I drove town to Tijuana and bought my "refill" from Farmacia Roma 3 blocks from the border for $15. My US doctor wanted to charge me $200 for additional tests and then $30 for the same meds. This is for a simple bacterial infection.
    - 7y ago
xxpor 7y ago
Recently, PhRMA has been buying a bunch of promoted tweets in my twitter feed claiming that 10% of drugs outside of the US are counterfeit. I'm sure the timing is completely coincidental.
- ProAm 7y ago
  Track and Trace stops that within the US
  - refurb 7y ago
    That's true, but track and trace is not setup for drugs imported outside the country. The drug has to be packaged within the US for the appropriate tracking codes to be added. As we see it, there is no legal or operational way of transforming a drug packaged for a foreign market into a drug that meets the U.S. requirements of our in-progress track-and-trace system. What’s more, there is no way to alter the law to enable importation without undermining the law’s purpose and value. [1]https://www.drugchannels.net/2019/07/our-stat-op-ed-state-drug-importation.html https://www.drugchannels.net/2019/07/our-stat-op-ed-state-dr...
    - ProAm 7y ago
      It will be eventually though (at least that's the plan). It will be traceable if it's available in the US, still a WAYS out. These current deadlines are fictitious.
    - prepend 7y ago
      Obviously it doesn’t work now, since it’s not legal to import drugs like this. Why would we have a functioning system for an illegal activity. I think it’s important for me to always mention how such a system would be implemented u set new laws. Or why I think the proposed law doesn’t address this need. If I just say that it’s not currently done, it doesn’t help the conversation much because it’s not a useful fact. Also there’s no drugs exported to Mars and many other not relevant without additional info facts. A new law will need to provide for this capability. All the laws I’ve seen addressed drug safety in one way or another. But curiously I hear the complaint about safety brought up without the compensating strategies also brought up.
baybal2 7y ago
Question, if Canadian drugs are finally OK, why not Indian or anybody's else drugs for that matter? In any normal country private importation of whatever you want not explicitly prohibited is not a state's f*ing business.
- HNisCurated 7y ago
  I have considered this. While many people worship regulations, I'm willing to take the "risk" of using foreign medication. I wish I could take the same risk when I get hydrocortisone, but instead I need to pay a physician for a prescription, a pharmacist to fill, and the clinic that stores everything. Lots of middlemen for something that should be sold on Amazon.
  - pkaye 7y ago
    Is this hydrocontisone stronger than the over the counter variety?
    - xnyan 7y ago
      1% is OTC strength, it can be prescribed at 2.5% which I believe requires a consult with some kind of medical professional in most countries.
- massel 7y ago
  The Canadian drug and medical device certification process is far more stringent than that of the USA.
- pkaye 7y ago
  There are many generic drugs that I'm aware of being manufactured in India for consumption in the US. They are required to follow all the FDA manufacturing standards for import. But there are still some quality issues at this time. https://www.statnews.com/2019/07/22/indian-pharmaceutical-industry-drug-quality-charges/ https://www.statnews.com/2019/07/22/indian-pharmaceutical-in...
e1ven 7y ago
I'm all for solutions that lower drug prices in the US. Wouldn't mass-importation from Canada encourage drug companies to raise Canada's pricing to match US levels? That seems like something Canada wouldn't be particularly fond of.
- CoolGuySteve 7y ago
  Based on the high level of regulatory capture in the mining and telecom industries in Canada, it doesn't seem like it would be particularly expensive for drug companies to lobby the federal government for stricter export restrictions on drugs.
- Scoundreller 7y ago
  Canada’s pricing basically works like this: manufacturers are allowed to charge the median price of industrialized countries.
  - e1ven 7y ago
    I understand that's their current policy. If the US began importing high quantities of drugs from Canada, what prevents Pharma companies from insisting that Canada pay current US prices? If Canada declines, the companies could stop selling in Canada. I would think in many cases the profit from selling in Canada at all is less than what they'd lose from allowing them to be imported to the US.
    - Scoundreller 7y ago
      Then Canada goes back to its old system before the current one: Compulsory Licensing. Anyone can manufacture any patented drug and just pay the patent holder an x% royalty. It works ok for playing songs on the radio.
      - e1ven 7y ago
        Sounds reasonable to me. I'd be in favor of such a system. I think if the US were importing large quantities of drugs, they would be forced to move to that system. But if you think that there is the political will to do so, I think that could work out rather well. Thanks.
wpdev_63 7y ago
I made a post asking why don't people just drive to Canada/Mexico to fulfill their prescription medicine and was downvoted on HN. I guess alot of people here work in the pharama industry.
- dhritzkiv 7y ago
  Depending on where you live, driving to Canada/Mexico is onerous (costly, time-consuming), and ultimately unnecessary. Definitely not a solution. That being said, some do drive to Canada to fulfill their prescriptions
- rifung 7y ago
  > I guess alot of people here work in the pharama industry. No.. you're being downvoted that's a completely unrealistic proposal for people to follow. People should not need to drive across the border to get medicine. Also not everyone has the luxury of having the time to do that.
  - barkingcat 7y ago
    This is happening en mass in reality.
- wyldfire 7y ago
  Wouldn't that essentially constitute the same import being discussed here? You're suggesting people smuggle their prescriptions in?
- cbhl 7y ago
  90% of Canadians may live within 100 km of the US border, but the reverse does not hold true with the Canadian border :)
- r00fus 7y ago
  That's a great workaround for small groups of people. As a national solution, it's full of problems and directly avoids the real problem - that government doesn't negotiate drug prices. Scale matters.
- 7y ago
refurb 7y ago
Canada is not so hot on the idea.[1] "The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers," the letter states. "The supply simply does not, and will not, exist within Canada to meet such demands." [1]https://www.cbc.ca/news/canada/toronto/american-demand-canada-drug-supply-1.5226871 https://www.cbc.ca/news/canada/toronto/american-demand-canad...
- prepend 7y ago
  Fortunately that supply can increase. Theoretically drug companies can close off the entire market or increase supply. They’re prohibited from raising prices in the market. Since marginal cost is so low, I expect that they’ll keep selling st increased volumes. It’s a bit odd that the US is taking this tack instead of just regulating drug prices domestically. But there’s a lot of odd things in the health system.
  - droithomme 7y ago
    > instead of just regulating drug prices domestically Perhaps the hope is that US prices will fall, shortages in Canada might cause prices to go up a bit there, but in the end the open market will equalize with lower prices overall.
    - dmix 7y ago
      It will generate a significant amount of income for the Canadian economy and create cheaper drug prices for tons of people. It might be bumpy at the start as the supply side gets in line with the market, but it's better for both sides in the long run IMO.
  - yellowarchangel 7y ago
    > instead of just regulating drug prices domestically The current administration is very anti-regulation, so this would be a bad move. Also, allowing Canadian drugs to enter the country will force current producers to lower pricers, which will organically (capitalism) reduce the price through competition.
guardiangod 7y ago
As a Canadian this is really weird. US, the wealthiest and most powerful country in the world, will now grey-market import/smuggle drugs from freaking Canada. All because the US, land of exception-ism and capitalism, couldn't stop pricing gouging. Now US is expecting Canada to supply the entire US' medical drugs' demand. When did Canada become responsible for the well-being of US citizens? This is akin to asking Hong Kong to supply the entire China's demand for baby formula. This did not end well for HK. Edit: Oh sure, down-vote me into oblivion.
- ddingus 7y ago
  Fair questions! Agree with you, this is likely all bad for Canada. (Sorry to be a bad neighbor mate) But, the discussion is likely a net good all around. Just in this thread I see lots of new info. Many things I did not know about the US and Canada and how drugs work economically. Better informed people is likely to be a good thing.
deleted 7y ago
[deleted]
flyingfences 7y ago
Maine had a law allowing these imports (and imports from a few other countries) that was struck down as a violation of federal supremacy. While it was in effect, though, it was certainly appreciated by Mainers.
rayiner 7y ago
Fun fact, Canada spends 1.76% of GDP on pharmaceuticals: https://data.oecd.org/healthres/pharmaceutical-spending.htm https://data.oecd.org/healthres/pharmaceutical-spending.htm. The U.S. spends 2.04%. Cutting pharmaceutical prices to Canadian levels of spending would save about $55 billion per year. Which is not nothing, but it would reduce health care spending by just 1.6%. If you look at dollars-per-capita, the difference is $389. That doesn't only reflect the price of the drugs, it also reflects the fact that Americans might simply require more drugs than Canadians. For example, obesity rates drive the need for drugs for blood pressure, cholesterol, etc. 25% of Canadians are obese versus 34% of Americans: https://www150.statcan.gc.ca/n1/pub/82-625-x/2011001/article/11411-eng.htm https://www150.statcan.gc.ca/n1/pub/82-625-x/2011001/article.... That means we would spend a lot more on obesity-related drugs even if they cost the same as in Canada.
- tareqak 7y ago
  From your comment, I’m not sure if you are downplaying the high price of medication in the United States or simply stating a fact, so I’m going to clarify (apologies on my part). Reducing 1.6% of the aggregate healthcare spending isn’t the full picture. That amount is not going to go to reduce the price of over-the-counter Acetaminophen or over-the-counter Ibuprofen: it’s going to go to things like grossly marked-up Epipens and the like.
  - rayiner 7y ago
    The point is that the amount of political attention paid to drug spending vastly outweighs the actual impact of drug spending on the economy (or peoples' wallets). My cynical take is that it's easier to fixate on an area where you can demonize a small number of large companies, instead of looking at the structural reasons why the U.S. spends twice as much per person as Canada on healthcare overall. Okay, let's import all our drugs from Canada and save a few hundred dollars per person on pharmaceuticals. Then let's get rid of all health-insurer profits and save another $180 per person. Now what about the other $5,432 more each American spends than each Canadian?
- prepend 7y ago
  I don’t think % of gdp is a very useful comparison because there’s not really a clear correlation between healthcare and gdp and there’s so many factors. I like your data source and I looked at %health and Canada is 16% to the US’ 12%. That doesn’t mean that drugs from Canada will increase health care spending as there’s so many different factors at play. The US might buy more drugs at lower costs keeping the ratios the same. Without a lot deeper analysis I don’t think it’s fair to say that the US requires more drugs than Canada.
btbuildem 7y ago
As a Canadian, I will press my representatives as hard as possible to prevent this from happening. It can only impact our healthcare system negatively -- no thanks.
nostromo 7y ago
Market-oriented people have long noted that the US medical consumer is funding cheaper drugs for the entire world. If we wanted a system that's more equitable, we could create a law that sets the maximum price for medicine in the US at some multiple of what's charged abroad. For example: we could say that it's illegal to charge a US person more than 2x what you charge for the drug anywhere else in the world. This would do two things: it would bring down the cost for US consumers, and it would increase the cost for consumers abroad -- effectively reducing the free-rider effect we currently see in Europe.
- ma2rten 7y ago
  Sounds like they are doing something similar: Separately, the Trump administration is pursuing a regulation that would tie what Medicare pays for drugs administered in doctors’ offices to lower international prices.
- danmaz74 7y ago
  "what's charged abroad" includes poor countries that will never be able to afford prices comparable to the US. Companies are able to make money in those markets too, as long as the marginal cost of production is lower than the price they can ask there. Prohibiting this doesn't look very market-oriented to me.
- thatfrenchguy 7y ago
  > This would do two things: it would bring down the cost for US consumers, and it would increase the cost for consumers abroad -- effectively reducing the free-rider effect we currently see in Europe. In most European countries, a government regulator fixes the prices with industry. It's not freeloading in that case, they have the choice between negotiating a fair price or not having access to the market at all. And because they're not idiots, they choose to have access to the market. Most of that money doesn't go to fund R&D and go back to their shareholders anyway :-)
- Waterluvian 7y ago
  That sounds positively awful. They'll just chop off the lower end and let people in developing nations die. They're not a huge revenue source anyway.
arcticbull 7y ago
What's to stop drug companies from prohibiting re-export from Canada as part of their sale/negotiation with Provinces? This is an absurd idea. Canada gets lots of its drugs from American companies, why on earth would they permit re-export and undercut themselves? Refusing to address the real problems in the US market and relying on Canadian provinces to negotiate bulk discounts on behalf of American states is almost surreal. That drug pricing is America's problem, not Ontario's, is a phrase I never thought I'd type out haha.
beepboopbeep 7y ago
No need to fix the crisis at home, just leach off of other people who are able to get their shit together.
sunshinelackof 7y ago
As an American this is pretty embarrassing. Somehow trying to absorb the benefits of another government's regulation and billing it as creating a "freer" market is more popular than solving the problem here? I don't buy it, I can't imagine a lot of other people really do either. I'm also not sure that it would even work. That is supposing Canada wouldn't respond to lukewarm hostility with measures to counter this. It feels like we're civically brain-dead. Said sitting on a stash of decade old epi-pens.
docker_up 7y ago
All this will do, unfortunately, is cause drug companies to raise prices in Canada. There's no way that drug companies will allows this loss of revenues from the US.
neonate 7y ago
http://archive.is/qPREl http://archive.is/qPREl

169 points by ilamont 7y ago

I don't have confidence that the Trump administration will pull this off, because I watched the George W Bush administration punt it in 2002: https://www.nytimes.com/2002/07/18/us/plan-import-drugs-canada-passes-senate-but-bush-declines-carry-it.html https://www.nytimes.com/2002/07/18/us/plan-import-drugs-cana... The real reason that prescription drug prices in the US don't match the prices seen in other countries is that patients in the US have no leverage in demand like that seen in supply. When a market has a power imbalance where the producer has a near-infinite production capacity (drugs cost infinitely less to manufacture than discover) and monopoly protections (pharmaceutical patents), then the consumer is at the whim of the producer and will eventually/inevitably pay whatever price the producer demands. This is econ 101 stuff. What we need is an advocate to organize consumers so they have leverage over producers and can set a bulk price. This would also work in any industry that has a natural monopoly like water, electricity or (gasp) telecommunications: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly Note that we aren't talking about why electricity costs $10 per kilowatt hour, because decades ago we didn't have the "government is bad" mentality introduced by the Reagan administration, so Carter was able to form the US Department of Energy (and really various energy commissions had made the electrical grid part of the commons decades before that). So this proposal of importing prescription drugs (whether it happens or not) is only looking at the supply side, and for the reasons I listed above, will certainly fail eventually. The reason the rest of the world is eating our lunch is that they have no qualms about bolstering the demand side. That may mean: using a single-payer system instead of insurance companies, limiting the prices of key drugs, regulating pharmaceutical companies at a deeper level than what is done in the US, producing drugs at the state level (whether they're patented or not), or some combination of these and other measures that put consumers on an even playing field with producers. Now, we could look at US insurance companies as being an advocate to keep drug prices down. But someone realized decades ago (indeed, as early as Nixon's Health Maintenance Organization Act of 1973), that a pool of money that large is ripe for exploitation and corruption. It was predicted very early on by (labor/leftists/Keynesians/socialists/radicals/insert boogeymen here) that we would find ourselves in the situation we're in now. It's just that wealth inequality wasn't at nearly the levels we see today, and older folks from the WWII generation felt a certain patriotic duty to rip off the rest of the world instead of their fellow Americans, and we still had a manufacturing base in the US so we didn't fall into these zero-sum games of squeezing profit from stone. Ok that last paragraph was fairly opinionated on my part. But as the influencers of the tech world, you owe it to yourselves to be informed and know the history of this stuff so that you don't get distracted by the dilluted messaging that keeps people ignorant and divided. Stick to first principles, use critical thinking skills to discern where power imbalance leads to corruption, and find a way to convey what you have learned to people hungry for insight. For me that's the basic supply/demand dichotomy and how it breaks down in natural monopolies, but maybe there are better hacks out there.

mirimir 7y ago

OK, so I live in the US. And I take lots of drugs. Some of which are priced obscenely. So I buy some drugs through online pharmacies, and it's mailed to me. Mostly from Asia.

robomartin 7y ago

Every time I watch or read a debate on US healthcare issues the debaters conveniently ignore a reality that every single entrepreneur dealing with physical products is keenly aware of: Cost drivers Doing business in the US is very expensive. In the case of pharmaceuticals we have high regulatory costs and, perhaps worst than that, high legal costs. If you want to develop and sell a medical device in the US you have to accept the fact that it will take a ton of time and money to deal with the FDA. Not trivial, at all, even for relatively simple products (say, basic hearing aids). Worse than that, once you enter the market you have to expect the near certainty of having to face one or more nasty lawsuits. Medical product manufacturers, be it drugs or hardware, get pounded with lawsuits. From someone manufacturing a simple cane to prescription drugs. Lawsuits are so common most companies have complete legal departments on staff. Given that reality, yes, definitely yes, there will be a difference in cost when selling drug A in the US vs. Canada, Peru or Italy. No question about it. Yet, during debates between politicians all we hear about is how changing health insurance in one direction or another will reduce healthcare costs. That's just nonsense. It has to start with tort reform and educational loan reforms that reduce the cost of education. A doctor graduating with $300K in debt has no choice but to charge very high fees for his or her services. Now fill a hospital with people with multi-100K student debt and see if you can lower operating costs. Add to that an expensive regulatory framework and even more expensive legal landscape and the answer is simple: You can't. It doesn't matter how you twist and contort health insurance. If the underlying cost structure is high, no amount of magic hand waving is going to make things better. That's our problem. There's an asymptotic lower limit to what medical professionals have to earn in order to have a life. And there's another asymptotic limit to what the entire medical industry service and supply chain, from component suppliers to OEM's, doctors and hospitals have to charge in order to deal with regulatory and legal costs. Pretending none of this exists while talking about health insurance is kind of silly. If you bring prescription drugs in from abroad, it will not take long until a MOAL (Mother of All Lawsuits) costs someone a ton of cash and imported drugs become just as expensive as anything else gotten locally. Nobody seems interested in addressing the real issues, probably because he political value isn't as clear as beating on the low hanging fruit, even when this will fix nothing. Ever wonder why we've been talking about healthcare reform for decades and nothing ever really changes? Well, now you know.

OrgNet 7y ago

Like it or not, the Trump administration has good ideas

crb002 7y ago

Or change Medicaid rules to price compare a company's drugs globally as by law they have to offer Medicaid their lowest price.

mwambua 7y ago

I should probably do the research for myself, but is there a simple explanation for why it's easier to allow importation from Canada than to lower domestic prices in the US?

maximente 7y ago
i think companies can charge a lot more because individuals can't import from abroad, so this is an important step on that path
- alex_anglin 7y ago
  ... until the supply to Canadians becomes affected, making the government impose export restrictions.
  - oarabbus_ 7y ago
    It's beneficial to both parties once that point is reached.
  - londons_explore 7y ago
    Drug companies might stop selling in canada entirely to protect US profits.
    - asark 7y ago
      Drug companies only have any kind of exclusivity or advantage at the pleasure of governments. They can't go too long playing hardball or countries will just start ignoring their patents.
- rtkwe 7y ago
  Canada doesn't get lower prices because they can import drugs as individuals. They get such low prices because the Canadian government is the insurance for the whole country and has the negotiating power to actually get lower prices out of drug companies. Medicare part D in the US can't even actually negotiate for lower prices in the US! Allowing import from Canada is just a bandaid to make it seem like they're doing something about the actual problem and will only work as long as we assume the supply of Canadian drugs can absorb both it's own demand and the US demand.

testplzignore 7y ago

How is this different than the existing importation of generic drugs from places like India? Is it that this is cutting out the US middleman in the transaction?

ilaksh 7y ago

Why not Mexico also? I'm guessing racism or people will say they are fake drugs. Since I moved to Mexico about 10 months ago my health problems have been treated with Mexican-bought medication only and my symptoms have not gotten any worse. Except for when I run out and need to get more. I mean there are places like Walmart, some pretty large pharmacy chains, etc. It seems like people would not tolerate a significant amount of counterfeit medication.

nullwasamistake 7y ago
Northern Mexico is super dangerous so realistically you would have to fly. And I don't think the TSA will like you carrying a multi year supply of meds back to US
- ilaksh 7y ago
  I live in Tijuana and it's actually not super dangerous unless you go to a bad neighborhood. Sure, relatively statistically speaking, there is a higher chance of something bad happening. But it is still a very tiny chance if you stay within nice neighborhoods and are just trying to buy medication. By the way, unfortunately the only part that of Tijuana that a lot of Americans see is the one designated for maximum debauchery and is one of the worst neighborhoods. The pharmacies right by the border are fine, but if you want a nicer area, walk across the PedWest crossing and stand in the Uber waiting area for an Uber to go to Playas. Then you can go somewhere like Farmacias Roma or Farmacias del Ahorro or a bunch of other nice stores with people wearing lab coats. You could also just go to Walmart for medication if you want but recently they seem to be missing basic things I needed so they probably aren't the best.
  - technobum 7y ago
    This morning I drove town to Tijuana and bought my "refill" from Farmacia Roma 3 blocks from the border for $15. My US doctor wanted to charge me $200 for additional tests and then $30 for the same meds. This is for a simple bacterial infection.
  - 7y ago

xxpor 7y ago

Recently, PhRMA has been buying a bunch of promoted tweets in my twitter feed claiming that 10% of drugs outside of the US are counterfeit. I'm sure the timing is completely coincidental.

ProAm 7y ago
Track and Trace stops that within the US
- refurb 7y ago
  That's true, but track and trace is not setup for drugs imported outside the country. The drug has to be packaged within the US for the appropriate tracking codes to be added. As we see it, there is no legal or operational way of transforming a drug packaged for a foreign market into a drug that meets the U.S. requirements of our in-progress track-and-trace system. What’s more, there is no way to alter the law to enable importation without undermining the law’s purpose and value. [1]https://www.drugchannels.net/2019/07/our-stat-op-ed-state-drug-importation.html https://www.drugchannels.net/2019/07/our-stat-op-ed-state-dr...
  - ProAm 7y ago
    It will be eventually though (at least that's the plan). It will be traceable if it's available in the US, still a WAYS out. These current deadlines are fictitious.
  - prepend 7y ago
    Obviously it doesn’t work now, since it’s not legal to import drugs like this. Why would we have a functioning system for an illegal activity. I think it’s important for me to always mention how such a system would be implemented u set new laws. Or why I think the proposed law doesn’t address this need. If I just say that it’s not currently done, it doesn’t help the conversation much because it’s not a useful fact. Also there’s no drugs exported to Mars and many other not relevant without additional info facts. A new law will need to provide for this capability. All the laws I’ve seen addressed drug safety in one way or another. But curiously I hear the complaint about safety brought up without the compensating strategies also brought up.

baybal2 7y ago

Question, if Canadian drugs are finally OK, why not Indian or anybody's else drugs for that matter? In any normal country private importation of whatever you want not explicitly prohibited is not a state's f*ing business.

HNisCurated 7y ago
I have considered this. While many people worship regulations, I'm willing to take the "risk" of using foreign medication. I wish I could take the same risk when I get hydrocortisone, but instead I need to pay a physician for a prescription, a pharmacist to fill, and the clinic that stores everything. Lots of middlemen for something that should be sold on Amazon.
- pkaye 7y ago
  Is this hydrocontisone stronger than the over the counter variety?
  - xnyan 7y ago
    1% is OTC strength, it can be prescribed at 2.5% which I believe requires a consult with some kind of medical professional in most countries.
massel 7y ago
The Canadian drug and medical device certification process is far more stringent than that of the USA.
pkaye 7y ago
There are many generic drugs that I'm aware of being manufactured in India for consumption in the US. They are required to follow all the FDA manufacturing standards for import. But there are still some quality issues at this time. https://www.statnews.com/2019/07/22/indian-pharmaceutical-industry-drug-quality-charges/ https://www.statnews.com/2019/07/22/indian-pharmaceutical-in...

e1ven 7y ago

I'm all for solutions that lower drug prices in the US. Wouldn't mass-importation from Canada encourage drug companies to raise Canada's pricing to match US levels? That seems like something Canada wouldn't be particularly fond of.

CoolGuySteve 7y ago
Based on the high level of regulatory capture in the mining and telecom industries in Canada, it doesn't seem like it would be particularly expensive for drug companies to lobby the federal government for stricter export restrictions on drugs.
Scoundreller 7y ago
Canada’s pricing basically works like this: manufacturers are allowed to charge the median price of industrialized countries.
- e1ven 7y ago
  I understand that's their current policy. If the US began importing high quantities of drugs from Canada, what prevents Pharma companies from insisting that Canada pay current US prices? If Canada declines, the companies could stop selling in Canada. I would think in many cases the profit from selling in Canada at all is less than what they'd lose from allowing them to be imported to the US.
  - Scoundreller 7y ago
    Then Canada goes back to its old system before the current one: Compulsory Licensing. Anyone can manufacture any patented drug and just pay the patent holder an x% royalty. It works ok for playing songs on the radio.
    - e1ven 7y ago
      Sounds reasonable to me. I'd be in favor of such a system. I think if the US were importing large quantities of drugs, they would be forced to move to that system. But if you think that there is the political will to do so, I think that could work out rather well. Thanks.

wpdev_63 7y ago

I made a post asking why don't people just drive to Canada/Mexico to fulfill their prescription medicine and was downvoted on HN. I guess alot of people here work in the pharama industry.

dhritzkiv 7y ago
Depending on where you live, driving to Canada/Mexico is onerous (costly, time-consuming), and ultimately unnecessary. Definitely not a solution. That being said, some do drive to Canada to fulfill their prescriptions
rifung 7y ago
> I guess alot of people here work in the pharama industry. No.. you're being downvoted that's a completely unrealistic proposal for people to follow. People should not need to drive across the border to get medicine. Also not everyone has the luxury of having the time to do that.
- barkingcat 7y ago
  This is happening en mass in reality.
wyldfire 7y ago
Wouldn't that essentially constitute the same import being discussed here? You're suggesting people smuggle their prescriptions in?
cbhl 7y ago
90% of Canadians may live within 100 km of the US border, but the reverse does not hold true with the Canadian border :)
r00fus 7y ago
That's a great workaround for small groups of people. As a national solution, it's full of problems and directly avoids the real problem - that government doesn't negotiate drug prices. Scale matters.
7y ago

refurb 7y ago

Canada is not so hot on the idea.[1] "The Canadian medicine supply is not sufficient to support both Canadian and U.S. consumers," the letter states. "The supply simply does not, and will not, exist within Canada to meet such demands." [1]https://www.cbc.ca/news/canada/toronto/american-demand-canada-drug-supply-1.5226871 https://www.cbc.ca/news/canada/toronto/american-demand-canad...

prepend 7y ago
Fortunately that supply can increase. Theoretically drug companies can close off the entire market or increase supply. They’re prohibited from raising prices in the market. Since marginal cost is so low, I expect that they’ll keep selling st increased volumes. It’s a bit odd that the US is taking this tack instead of just regulating drug prices domestically. But there’s a lot of odd things in the health system.
- droithomme 7y ago
  > instead of just regulating drug prices domestically Perhaps the hope is that US prices will fall, shortages in Canada might cause prices to go up a bit there, but in the end the open market will equalize with lower prices overall.
  - dmix 7y ago
    It will generate a significant amount of income for the Canadian economy and create cheaper drug prices for tons of people. It might be bumpy at the start as the supply side gets in line with the market, but it's better for both sides in the long run IMO.
- yellowarchangel 7y ago
  > instead of just regulating drug prices domestically The current administration is very anti-regulation, so this would be a bad move. Also, allowing Canadian drugs to enter the country will force current producers to lower pricers, which will organically (capitalism) reduce the price through competition.

guardiangod 7y ago

As a Canadian this is really weird. US, the wealthiest and most powerful country in the world, will now grey-market import/smuggle drugs from freaking Canada. All because the US, land of exception-ism and capitalism, couldn't stop pricing gouging. Now US is expecting Canada to supply the entire US' medical drugs' demand. When did Canada become responsible for the well-being of US citizens? This is akin to asking Hong Kong to supply the entire China's demand for baby formula. This did not end well for HK. Edit: Oh sure, down-vote me into oblivion.

ddingus 7y ago
Fair questions! Agree with you, this is likely all bad for Canada. (Sorry to be a bad neighbor mate) But, the discussion is likely a net good all around. Just in this thread I see lots of new info. Many things I did not know about the US and Canada and how drugs work economically. Better informed people is likely to be a good thing.

deleted 7y ago

[deleted]

flyingfences 7y ago

Maine had a law allowing these imports (and imports from a few other countries) that was struck down as a violation of federal supremacy. While it was in effect, though, it was certainly appreciated by Mainers.

rayiner 7y ago

Fun fact, Canada spends 1.76% of GDP on pharmaceuticals: https://data.oecd.org/healthres/pharmaceutical-spending.htm https://data.oecd.org/healthres/pharmaceutical-spending.htm. The U.S. spends 2.04%. Cutting pharmaceutical prices to Canadian levels of spending would save about $55 billion per year. Which is not nothing, but it would reduce health care spending by just 1.6%. If you look at dollars-per-capita, the difference is $389. That doesn't only reflect the price of the drugs, it also reflects the fact that Americans might simply require more drugs than Canadians. For example, obesity rates drive the need for drugs for blood pressure, cholesterol, etc. 25% of Canadians are obese versus 34% of Americans: https://www150.statcan.gc.ca/n1/pub/82-625-x/2011001/article/11411-eng.htm https://www150.statcan.gc.ca/n1/pub/82-625-x/2011001/article.... That means we would spend a lot more on obesity-related drugs even if they cost the same as in Canada.

tareqak 7y ago
From your comment, I’m not sure if you are downplaying the high price of medication in the United States or simply stating a fact, so I’m going to clarify (apologies on my part). Reducing 1.6% of the aggregate healthcare spending isn’t the full picture. That amount is not going to go to reduce the price of over-the-counter Acetaminophen or over-the-counter Ibuprofen: it’s going to go to things like grossly marked-up Epipens and the like.
- rayiner 7y ago
  The point is that the amount of political attention paid to drug spending vastly outweighs the actual impact of drug spending on the economy (or peoples' wallets). My cynical take is that it's easier to fixate on an area where you can demonize a small number of large companies, instead of looking at the structural reasons why the U.S. spends twice as much per person as Canada on healthcare overall. Okay, let's import all our drugs from Canada and save a few hundred dollars per person on pharmaceuticals. Then let's get rid of all health-insurer profits and save another $180 per person. Now what about the other $5,432 more each American spends than each Canadian?
prepend 7y ago
I don’t think % of gdp is a very useful comparison because there’s not really a clear correlation between healthcare and gdp and there’s so many factors. I like your data source and I looked at %health and Canada is 16% to the US’ 12%. That doesn’t mean that drugs from Canada will increase health care spending as there’s so many different factors at play. The US might buy more drugs at lower costs keeping the ratios the same. Without a lot deeper analysis I don’t think it’s fair to say that the US requires more drugs than Canada.

btbuildem 7y ago

As a Canadian, I will press my representatives as hard as possible to prevent this from happening. It can only impact our healthcare system negatively -- no thanks.

nostromo 7y ago

Market-oriented people have long noted that the US medical consumer is funding cheaper drugs for the entire world. If we wanted a system that's more equitable, we could create a law that sets the maximum price for medicine in the US at some multiple of what's charged abroad. For example: we could say that it's illegal to charge a US person more than 2x what you charge for the drug anywhere else in the world. This would do two things: it would bring down the cost for US consumers, and it would increase the cost for consumers abroad -- effectively reducing the free-rider effect we currently see in Europe.

ma2rten 7y ago
Sounds like they are doing something similar: Separately, the Trump administration is pursuing a regulation that would tie what Medicare pays for drugs administered in doctors’ offices to lower international prices.
danmaz74 7y ago
"what's charged abroad" includes poor countries that will never be able to afford prices comparable to the US. Companies are able to make money in those markets too, as long as the marginal cost of production is lower than the price they can ask there. Prohibiting this doesn't look very market-oriented to me.
thatfrenchguy 7y ago
> This would do two things: it would bring down the cost for US consumers, and it would increase the cost for consumers abroad -- effectively reducing the free-rider effect we currently see in Europe. In most European countries, a government regulator fixes the prices with industry. It's not freeloading in that case, they have the choice between negotiating a fair price or not having access to the market at all. And because they're not idiots, they choose to have access to the market. Most of that money doesn't go to fund R&D and go back to their shareholders anyway :-)
Waterluvian 7y ago
That sounds positively awful. They'll just chop off the lower end and let people in developing nations die. They're not a huge revenue source anyway.

arcticbull 7y ago

What's to stop drug companies from prohibiting re-export from Canada as part of their sale/negotiation with Provinces? This is an absurd idea. Canada gets lots of its drugs from American companies, why on earth would they permit re-export and undercut themselves? Refusing to address the real problems in the US market and relying on Canadian provinces to negotiate bulk discounts on behalf of American states is almost surreal. That drug pricing is America's problem, not Ontario's, is a phrase I never thought I'd type out haha.

beepboopbeep 7y ago

No need to fix the crisis at home, just leach off of other people who are able to get their shit together.

sunshinelackof 7y ago

As an American this is pretty embarrassing. Somehow trying to absorb the benefits of another government's regulation and billing it as creating a "freer" market is more popular than solving the problem here? I don't buy it, I can't imagine a lot of other people really do either. I'm also not sure that it would even work. That is supposing Canada wouldn't respond to lukewarm hostility with measures to counter this. It feels like we're civically brain-dead. Said sitting on a stash of decade old epi-pens.

docker_up 7y ago

All this will do, unfortunately, is cause drug companies to raise prices in Canada. There's no way that drug companies will allows this loss of revenues from the US.

neonate 7y ago

http://archive.is/qPREl http://archive.is/qPREl