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John Wayne's Holster: Perscription Drugs From Canada Are Good, eh?
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Friday, March 18, 2005

Perscription Drugs From Canada Are Good, eh?

Perscription drugs in the US are too darn expensive! Many Americans can not afford to pay for the medicine they need. This is a particularly acute problem for those on fixed incomes or without medical insurance.

The same drugs across the border are cheaper! Why not let people purchase them over there?

On the surface, this may look like a good alternative to the rising prices of medicine. However, I believe that this is a short-sighted solution. It avoids the real problems and will make things worse in the long run.

Some may argue that the pharmaceutical industry is a powerful lobby and they won’t let us buy drugs in Canada because they are greedy and want to make money. I won’t argue that they are indeed a powerful lobby. And I won’t argue that their goal is to make money. Perhaps there is some level of truth in these allegations that contribute to high drug prices. But if one were to leave the argument there, they would be missing a major part of the problem!

Consider this point for a moment. With few exceptions, almost all new drugs are developed here in the US. Not in Mexico! Not in Canada! And Not in Europe. Why? Because it is profitable for companies to do it here and not there!

Fortunately or unfortunately (depending on your perspective), we live in a capitalistic society. Pharmaceutical companies invest hundreds of millions of dollars in discovery and development of new drugs. Most drugs never make it to market. In order for companies to remain solvent, they need to recoup R&D costs and turn a profit. That’s the American way! If they can not turn a profit, we remove their incentive to discover and develop new drugs – and the process stops.

So why are the same drugs cheaper in Canada than they are here? There are several reasons. For starters, Canada does not have an FDA or AMA that establishes standards on the pharmaceuticals they sell. There is also price discrimination. In Canada, the average person makes about 20-30% less than the average American. To reflect that difference, the drug companies adjust their prices (i.e. charge less) to accommodate market conditions. On the flip side, the American prices are driven up to help pay for expensive advertising and promotional campaigns we are bombarded with. Canada does not allow drug ads. Finally, there are price controls. National and provincial laws in Canada limit the prices for which pharmaceuticals can be sold. These lower costs reduce revenue to the drug companies, and drive up prices in the US. In essence, Canadian consumers are NOT helping to recoup R&D costs, so we Americans are forced to foot the bill.

What is the solution? To start, we should focus on two key issues. Advertising and price controls. Adverstising should be curtailed. We are not talking about infringing on free speech, or placing restrictions on a free market. We are talking about product safety. Taking medication has certain inherent risks. We have all heard the disclaimers that accompany drug ads (e.g. drug “X” could cause diarrhea, vomiting, liver problems, heart palpitations, lymphoma, internal bleeding, etc. etc). In many cases, a given drug’s safety is not proven. As such, their use should only be with a doctors recommendation, free from the influence of consumer pressure. As it is now, consumers are going to their physician and demanding medications that they have seen advertised - without full consideration of potentially dangerous side-effects (assuming the side effects are known).

We should also stop subsidizing other country’s “rights” to have our drugs. We should demand that they pay their fair share in recouping R&D costs. If that were done, the US consumer would pay 60% less and everyone else would pay 25% more.


At 3:54 PM, Anonymous Bunny said...


I totally agree with you on this. It is a sad situation for the millions of people on fixed incomes.


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