The Drug Importation Bandwagon, the Long-term Consequences

Published August 25, 2004

There’s a great “Importing Drugs from Canada” bandwagon currently moving through the political landscape, and it offers citizens of now three states–Minnesota, Wisconsin, and Illinois–the opportunity to buy their drugs over the Internet from Canadian pharmacies. It sounds great! And, it promises huge savings–20-30 percent–to those who log on and make their purchases. It appears that any politician who jumps on this bandwagon will get lots of votes from the drug-starved public.

I’d like to propose some random thoughts about the bandwagon:

  • Canada’s population is about 30 million. Canada imports 60 percent of its drugs from the United States. Canada manufactures very little of its own drugs, and much of the remaining 40 percent of its drugs are imported from China, South Africa, Turkey and Philippines;
  • Canada’s drug research/development and manufacturing industry dried up years ago, perhaps because stringent cost controls drove profitability out of the system;
  • Over 80 percent of the pharmaceutical breakthroughs and inventions in the past 10 years have taken place in the United States due to a strong research/development commitment;
  • The populations of Illinois (12.5 million), Minnesota (4.9 million), and Wisconsin (5.4 million) are equal to 76 percent of all of Canada. Is it logical to assume that Canada would divert its already imported drugs to meet the huge market demands of the United States? The law of “Supply and Demand” would suggest that Canada would need to raise prices;
  • If Canadian drugs are re-directed to the United States, what impact would this have on the Canadian medical system?
  • Given that Canada imports a majority of its drugs from the United States, is it logical to assume that our drug companies would increase their production for Canada knowing that the drugs will merely reappear in the United States market at reduced prices? The law of “Common Sense” would suggest that they would not do that;
  • If we told Giant Eagle, Heinens, or Topps that they must sell everything for a 20-30 percent price reduction, what impact would that have on the food supply industry?
  • An absolutely great terror tactic would be to corrupt the drug supply of the United States. Is now really the time to bypass our control systems and open our supply to potential tampering by terrorists?
  • There’s another bandwagon moving across the landscape. It has to do with keeping jobs in the United States vs. “off-shoring.” Somehow the “Importing Drugs from Canada” and the “Keep Jobs in the United States bandwagon” seem inconsistent to me.

I’m not a pharmaceutical employee. I don’t own pharmaceutical stock. I’m just a retired guy who has time to watch political bandwagons and the political antics that go with them. If we, as taxpayers, strongly feel that we should be buying drugs for each other, then let’s pay for it by putting a line on Form 1040. Let’s pay for it rather than tamper with the economics and profitability of the greatest drug and medical care system in the world.

Myron Kushner is an Ohio resident and member of The Heartland Institute.