U.S. importation programs would overwhelm Canada's drug supply; Canadian distributors would capture expected savings

TORONTO, Oct. 29, 2024 /PRNewswire/ - Research published by the Canadian Health Policy Institute (CHPI) suggests that the United States won't be able to manage healthcare costs by importing prescription drugs from Canada.

Importation has the implicit endorsement of U.S. presidential candidates Donald Trump and Kamala Harris. In 2020, the Trump administration initiated a pathway for States to seek approval from the Food and Drug Administration (FDA) to establish importation programs. As of August 28, 2024, Colorado, Florida, Maine, New Hampshire and New Mexico have submitted State importation proposals to the FDA. In 2024 under the Biden administration, in which Harris serves as Vice-President, the FDA approved Florida's proposal.

The Institute's CEO and the author of the study, Brett Skinner, PhD, examined 2023 Canadian and American sales volumes for the 27 prescription drugs listed for importation in the Colorado and Florida proposals, to estimate how long it would take to exhaust the entire Canadian supply of these drugs under the full weight of consumer demand from the United States.

The study found that U.S. demand would have depleted the entire Canadian stock of the medicines within 57 days on average.

Skinner believes that State importation programs will fail because "American consumers outnumber Canadian consumers by a ratio of more than 8 to 1. Manufacturers will not over-supply the Canadian market, and the Canadian government will ban exports to prevent shortages."

Even without these counteractions, Skinner said, "State importation programs will not generate the consumer savings required by the FDA for approval of their programs because Canadian distributors will mark-up the price of exported drugs to capture the difference."

"Manufacturer list prices for patented medicines are capped by Canada's federal government but the regulations apply only to sales to Canadian consumers. Caps on wholesale and pharmacy mark-ups apply only to sales reimbursed by public drug plans. There are no regulations on the prices of exported drugs."

The study is available free of charge at www.canadianhealthpolicy.com.

SOURCE Canadian Health Policy Institute

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