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Importing Drugs from Canada (1 Viewer)

Sweet J

Sweet J

Footballguy
So I was listening to the Pod Save America podcast yesterday, and heard Elizabeth Warren interviewed.  It was generally a fine interview; she's a smart woman with generally smart positions.  Some can disagree, of course, but her positions seem to be somewhat based in thoughtful analysis.

But then she said something along the lines of:  "I'm working on a program to make it easier to import drugs from Canada" and then went on to spout off about how wonderfully cheap Canadian drugs are.  And how if we could legally/safely import the drugs from Canada, we'd have cheaper drugs!

This analysis seems really simple-minded to me, and I was surprised to hear it from her.  But then I thought, "maybe I'm thinking about it all wrong."  So I come here for thoughtful analysis; maybe someone can convince me to think about it another way.

My thinking:  The reason that drugs are cheaper in Canada than the US is NOT related to price of manufacturing or otherwise related to the fact that canadians can "make" drugs cheaper; i.e., I understand why maple syrup made/sold in Canada is cheaper than maple syrup made in, say, New Mexico -- it's related to production cost, access to raw materials, etc. 

Instead, drugs in Canada are cheaper because of the price controls that Canadian government mandates for drugs manufactured/sold in Canada.  The Canadian government, as a policy, limits the amount that companies can charge.

So, IF THE ABOVE IS TRUE (and please correct me if I've gotten something wrong), then isn't a "Congressional Solution" to allow the US to import drugs really, really, really disingenuous?  What I mean is this:  If Congress wants to mandate the VERY SAME price controls for drugs sold by US manufacturers, it can.  It doesn't need to go through the farce of allowing for Canadian drugs to be imported to the US, when what is really happening is that they would be allowing for Canadian price controls to be imported into the US.

If they want to mandate price controls, let them be open about it.  If they don't want to, they shouldn't try and piggy back on Canadian price controls under the facade of "Canadian drugs are cheaper" (they are only cheaper because the Canadian government has the stones to make it so).  If Congress wants to do the same as Canada, let's do it, but do an end around. 

OK, so . . . where am I wrong? 

 
Best pricing typically comes down to purchasing power. In the UK, their National Health Service purchases drugs for the entire country's supply and can drive best pricing as a result. It is very fragmented in the US in terms of who purchases the drugs and that is used by the drug companies to maximize their prices. Medicare, by law, can't negotiate with drug companies. Specific to Canada, they do have a drug review board that helps to control pricing.

Bernie Sanders sponsored a bill that would have allowed people to order pharmacueticals from Canada and other countries.  It was voted on in January and 12 Republicans crossed party lines for vote for it but the bill was defeated 52-48. 13 Democrats including Corey Booker voted against the measure and just happened to be the biggest recipients of pharma contributions over the last several years.

 
Baloney Sandwich said:
Best pricing typically comes down to purchasing power. In the UK, their National Health Service purchases drugs for the entire country's supply and can drive best pricing as a result. It is very fragmented in the US in terms of who purchases the drugs and that is used by the drug companies to maximize their prices. Medicare, by law, can't negotiate with drug companies. Specific to Canada, they do have a drug review board that helps to control pricing.

Bernie Sanders sponsored a bill that would have allowed people to order pharmacueticals from Canada and other countries.  It was voted on in January and 12 Republicans crossed party lines for vote for it but the bill was defeated 52-48. 13 Democrats including Corey Booker voted against the measure and just happened to be the biggest recipients of pharma contributions over the last several years.
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Right.  I think this post is in alignment with what I was saying.  In Canada, a "drug review board" helps control pricing.  In England, the National Health Service does something that I don't understand, but it sounds like it controls pricing as well. 

Our idiot politicians are not capable of doing something similar, so they are trying to piggy-back on Canada's policies, which would essentially import Canada's price controls.  It seems like a pretty crappy solution to the problem.  It feels like we are throwing up a huge flare to the world that our government is incompetent to handle these matters itself. 

 
Sweet J said:
Well, it sounds like they want to make drugs affordable, but in the most ham-brained way possible.
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A few do.

I'll say this, whatever mechanism is used for affordable medicine that people need is fine with me.

I don't care what message it sends.

I take no pills, no medication, and am pretty saddened by the staggering amount of scrips Americans take, but the pharma companies have hooked everyone, it can at least become affordable.

 
here are 3 articles that explain the main issues better then i can articulate:

https://www.forbes.com/sites/nathanvardi/2016/10/06/another-drug-company-that-raises-prices-like-crazy/#81cd55ee0d0c

https://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?_r=0

http://time.com/money/4377304/high-prescription-drug-prices-facts/

Summary - drugs basically became a comodity, like everything else. This wasn't as bad of a case always, but has become outright disgusting the last 15-20 years. Scariest part is that some pharmaceutical companies have gone so far that they manipulate the prices as well as market and advertise falsehoods to sell their product. It is strange to see everyone freaking out about a Heroin epidemic now, when these opiates and an actual gateway drug was one of the most popular pain killers prescribed. There are multiple lawsuits now against Oxy (http://www.nbcnews.com/storyline/americas-heroin-epidemic/oxycontin-maker-purdue-pharma-hit-unprecedented-lawsuit-washington-n731571) but the reality is this epidemic of Heroin isn't new. Work in most high schools and you can see a bunch of kids popping pills like pain killers, which are in the same opiod family as Heroin

 
What else do you want the government to control pricing on?   Should it be on all drugs?  Generics only?  Should the government also control and cover the losses these companies see when drugs fail the endpoints?

theres a lot of handwringing and bull#### in this thread so far. 

 
MarvinTScamper said:
What else do you want the government to control pricing on?   Should it be on all drugs?  Generics only?  Should the government also control and cover the losses these companies see when drugs fail the endpoints?

theres a lot of handwringing and bull#### in this thread so far. 
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Should the government oversee drugs costs? it is a fair question. what is funny is people who get upset at thoughts of this, and then wonder why our health care costs are as exhorbitant as they are too. And if you don't think that the pharmaceutical field has gotten way out of hand with a lot of this you are off and misinformed. So a pharmaceutical company creates a drug that controls weight gain, what do we do with it? do we use it for the benefit of society and reduce overall costs in health care and increase productivity, or do we let a monopoly and a small group of people profit hugely and the costs of quality of life in our society? Can be argued that this is simply the result of a capitalist society, but these companies have acquired plenty of research and information from previous people and institutions that will not reap the high costs thrown at a new drug:

this is one of those topics everybody will have an opinion on, but most people have heard 1 or 2 reports on this, or some other bias presentation and draw a conclusion from that. But if you look at where this has gone the last few decades, it would be ignorant to not see that this is a potential debilitating issue that should be looked at closer:

http://time.com/money/4462919/prescription-drug-prices-too-high/

ETA: and i am far from an expert in all of this, but have experienced a lot of this first hand for the last 15-20 years and have seen the effects of the changes in the industry directly on people i work with. Again, i am not putting politics into any of this, i guess the question should be as a society is this ok or not. and if it is, where do we draw a line? because if you look at it from simple dollar and cents, the profits reaped by a few of these companies costs taxpayers and pretty much all of us.

 
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In many countries with single payer, a new drug goes through 2 steps before getting marketing authorization for that country.  1st step is clinical approval (safety, efficacy, etc) and 2nd step is pricing approval in which the price is 'negotiated', but the approving country will look for evidence that the requested price is appropriate value for the drug, such as comparing if the drug reduces hospital stays. They will also check if the proposed price is comparable to other countries where the drug is on market.  Without the pricing approval, the drug isn't approved for sale.  

In the U.S, this second step doesn't exist.  The drug companies are allowed to charge what they want.  There are indirect controls over utilzation via insurance company formularies, exclusion lists, etc, but they aren't able to influence the actual price.  The one exception are govt purchasing entities such as Medicare in which price increases in list price result in price decreases to govt. entities.  Depending on the drug and who takes it, this can be pretty powerful price incentive.

So, the U.S system is set up to allow high prices.  Importing from Canada or any other country has always been seen as 'risky' by the FDA because they haven't validated the clinical studies, the manufacturing site and ensuring good manufacturing practices, etc.  One can argue the degree of the risk and find examples on either end of the spectrum, but in any case, that's the major reason why import  from Canada has not been allowed to date.  

If you don't like this system, advocate for single payer.  The existing system, while having access controls in theory, has not been effective at keeping drug prices in check. 

 
And don't kid yourself that it's only drug companies responsible for high healthcare costs.  Every segment and institution that is able to make a profit is doing everything they can to get an extra nickel.  Doctors (some, not all) are some of the most egregious offenders on this. 

Until the collective 'we' gets fed up and wants to drive down costs, things will continue to get worse.

 
MarvinTScamper said:
What else do you want the government to control pricing on?   Should it be on all drugs?  Generics only?  Should the government also control and cover the losses these companies see when drugs fail the endpoints?

theres a lot of handwringing and bull#### in this thread so far. 
Click to expand...
No, there's a lot of real data.

What's happening in every other country? Are the drug companies going out of business because of the mean old government fixing prices on behalf of its' citizens?  Is there a Pharma Telethon happening?

Real question: does any other country pay as much as we do for prescription meds?

One would think since we ingest more prescribed drugs than any other 10 countries combined we might warrant a discount.

 
modogg said:
Should the government oversee drugs costs? it is a fair question. what is funny is people who get upset at thoughts of this, and then wonder why our health care costs are as exhorbitant as they are too. And if you don't think that the pharmaceutical field has gotten way out of hand with a lot of this you are off and misinformed. So a pharmaceutical company creates a drug that controls weight gain, what do we do with it? do we use it for the benefit of society and reduce overall costs in health care and increase productivity, or do we let a monopoly and a small group of people profit hugely and the costs of quality of life in our society? Can be argued that this is simply the result of a capitalist society, but these companies have acquired plenty of research and information from previous people and institutions that will not reap the high costs thrown at a new drug:

this is one of those topics everybody will have an opinion on, but most people have heard 1 or 2 reports on this, or some other bias presentation and draw a conclusion from that. But if you look at where this has gone the last few decades, it would be ignorant to not see that this is a potential debilitating issue that should be looked at closer:

http://time.com/money/4462919/prescription-drug-prices-too-high/

ETA: and i am far from an expert in all of this, but have experienced a lot of this first hand for the last 15-20 years and have seen the effects of the changes in the industry directly on people i work with. Again, i am not putting politics into any of this, i guess the question should be as a society is this ok or not. and if it is, where do we draw a line? because if you look at it from simple dollar and cents, the profits reaped by a few of these companies costs taxpayers and pretty much all of us.
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I have a huge problem with how fat people costing tons of money is somehow the drug companies problem. There is so little personal responsibility in this country.  

Monopoly is another terrible word.  There is no reason more people can't make these products.  The reason they don't is because it's hard.  

The problem is real.  And yet, it's the government who created it.  

 
massraider said:
No, there's a lot of real data.

What's happening in every other country? Are the drug companies going out of business because of the mean old government fixing prices on behalf of its' citizens?  Is there a Pharma Telethon happening?

Real question: does any other country pay as much as we do for prescription meds?

One would think since we ingest more prescribed drugs than any other 10 countries combined we might warrant a discount.
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And if these price controls bankrupt these companies?  

 
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Brony said:
And don't kid yourself that it's only drug companies responsible for high healthcare costs.  Every segment and institution that is able to make a profit is doing everything they can to get an extra nickel.  Doctors (some, not all) are some of the most egregious offenders on this. 

Until the collective 'we' gets fed up and wants to drive down costs, things will continue to get worse.
Click to expand...
very true. the one that has gotten bad over the last 15-20 years is the education system. We have charter schools come out of everywhere to try and get those contracts. they control which kids can come in their school, and there have been countless issues (with some like you mention above). 

 
MarvinTScamper said:
And of these price controls bankrupt these companies?  
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Historically, drug development costs and go/no-go decisions during drug development are based on economics in the U.S market and sales to rest of world are gravy.  A drug company wouldn't bother trying to get a drug approved in a new country if the price would result in a business loss, so, no, they don't go bankrupt.  If they can make a profit, they'll market the drug, otherwise, skip that country. 

 
Brony said:
Historically, drug development costs and go/no-go decisions during drug development are based on economics in the U.S market and sales to rest of world are gravy.  A drug company wouldn't bother trying to get a drug approved in a new country if the price would result in a business loss, so, no, they don't go bankrupt.  If they can make a profit, they'll market the drug, otherwise, skip that country. 
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You start making prices "appropriate" and these companies will go bankrupt. 

That IS the reason they sell em cheaper everywhere else tho. 

 
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modogg said:
very true. the one that has gotten bad over the last 15-20 years is the education system. We have charter schools come out of everywhere to try and get those contracts. they control which kids can come in their school, and there have been countless issues (with some like you mention above). 
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Yep, both education and healthcare are these virtuous entities that we've been brainwashed to not question the price tag.   That's the root of these spending issues. 

 
MarvinTScamper said:
You start making prices "appropriate" and these companies will go bankrupt. 

That IS the reason they sell em cheaper everywhere else tho. 
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Possibly.  but realistically, each drug under development is valued on the revenue that it will produce when marketed compared against the cost and probability of getting approval.  If you reduce the revenue stream in the U.S.  and all other things are equal, some drugs will look less rosy and get #### canned.  But there will still be a lot of drugs that still look profitable and will be clinicially advanced. 

 
Brony said:
Possibly.  but realistically, each drug under development is valued on the revenue that it will produce when marketed compared against the cost and probability of getting approval.  If you reduce the revenue stream in the U.S.  and all other things are equal, some drugs will look less rosy and get #### canned.  But there will still be a lot of drugs that still look profitable and will be clinicially advanced. 
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Profitable?  Why will they look profitable if the government gets to set the price?

 
MarvinTScamper said:
Profitable?  Why will they look profitable if the government gets to set the price?
Click to expand...
government doesn't need to set prices, but making it a free-for-all is just as ridiculous. No reason you can't put parameters around it, like pricing should not be set above 200% profit or whatever. 

 
modogg said:
government doesn't need to set prices, but making it a free-for-all is just as ridiculous. No reason you can't put parameters around it, like pricing should not be set above 200% profit or whatever. 
Click to expand...
I agree this is hard.  And I don't like how generic pharma pricing skyrockets without a commensurate increase on costs for the manufacturer.  Profit parameters would be arbitrary at best.  These bigger brand name companies are spending 15-20% of their annual revs on R&D.  They are creating these drugs.  Generic makers not so much   

 
Here is an example. 

About five years ago I had to take rabies shots.  It was a series of five and some immunoglobulin to stimulate the immune system.  The doctor's office wouldn't or couldn't do the shots, so for 5 weeks I had to go to the emergency room.  Total cost around $12,500.

I was telling the story to a friend and he tells me his daughter was in the middle of the rabies series and they had a trip plan to go to Kenya.  Their doctor said no problem you can get the shots anywhere in the world.  So he checks with a doctor in Kenya and the doc said sure just grab a box in the back and give her the shots when she needs them.  I asked how much it cost he could remember but guessed it at about $50.

 
zeamax said:
Here is an example. 

About five years ago I had to take rabies shots.  It was a series of five and some immunoglobulin to stimulate the immune system.  The doctor's office wouldn't or couldn't do the shots, so for 5 weeks I had to go to the emergency room.  Total cost around $12,500.

I was telling the story to a friend and he tells me his daughter was in the middle of the rabies series and they had a trip plan to go to Kenya.  Their doctor said no problem you can get the shots anywhere in the world.  So he checks with a doctor in Kenya and the doc said sure just grab a box in the back and give her the shots when she needs them.  I asked how much it cost he could remember but guessed it at about $50.
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And that friend was Barack Obama.

 
zeamax said:
Here is an example. 

About five years ago I had to take rabies shots.  It was a series of five and some immunoglobulin to stimulate the immune system.  The doctor's office wouldn't or couldn't do the shots, so for 5 weeks I had to go to the emergency room.  Total cost around $12,500.

I was telling the story to a friend and he tells me his daughter was in the middle of the rabies series and they had a trip plan to go to Kenya.  Their doctor said no problem you can get the shots anywhere in the world.  So he checks with a doctor in Kenya and the doc said sure just grab a box in the back and give her the shots when she needs them.  I asked how much it cost he could remember but guessed it at about $50.
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this is a good example of the economy with pharmaceuticals. There isn't much science with Rabies vaccinations anymore, the virus hasn't evolved or the vaccinations from decades ago have not become obsolete.

And don't even ask how i know some of the most random crap. Anniversary date always is a dice roll between 3 dates, but something random like the Rabies virus and the vaccination are like the back of my hand. Could also be that i am thinking i know what i am talking about and could be completely off too

 
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MarvinTScamper said:
You start making prices "appropriate" and these companies will go bankrupt.

That IS the reason they sell em cheaper everywhere else tho.
Click to expand...
This is absurd. Drug companies spend billions on lobbying and still post profits in the billions. You've bought into the lies their lobbyists have pushed. An even bigger lie is that the costs are necessary to overcome the high costs of researching drugs. Huge portions of the research are funded by government grants, and conducted by physicians-in-training as part of their education. TO make things even more nefarious, drug companies often will make tiny tweaks to the formulary in order to allow them to apply for (and usually receive) new (patents). INsulin is not significantly changed from it's original form 60 years ago, yet generic insulin does not yet exist because of just such tweaks.

The pharmaceutical business is the best example of capitalism gone wrong in America today, and needs to brought to heel.

 
This is one of the few areas where I agree with Elizabeth Warren.  I see it as a relatively straightforward free trade issue.  The only thing (for me at least) that complicates things is that drug companies really do need to earn some serious profit on the drugs that pan out, given the high cost of development.  That's why patents exist, for example.  But I've soured on IP protections because of how firms can game the system to keep drugs from hitting the public domain.  We also don't seem to handle the generic market well, and I think drug importation would help quite a bit there too if it's coupled with FDA reform.  (For example, allowing automatic approval of drugs that have already been approved in other developed countries).  

 
renesauz said:
TO make things even more nefarious, drug companies often will make tiny tweaks to the formulary in order to allow them to apply for (and usually receive) new (patents). INsulin is not significantly changed from it's original form 60 years ago, yet generic insulin does not yet exist because of just such tweaks.
Click to expand...
wow, didn't know that. So why can't someone make a generic out of the pre-tweaked version? Can you even make generic insulin? I thought it was a living product. I know it's just an example you used and the bigger problem would be companies doing that with so many other drugs.

 
jamny said:
wow, didn't know that. So why can't someone make a generic out of the pre-tweaked version? Can you even make generic insulin? I thought it was a living product. I know it's just an example you used and the bigger problem would be companies doing that with so many other drugs.
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In many cases like this, it's not a patent issue, it's the approval pathway.  In the case of generics with most meds, they just have to show simple bioequivalence in a small study and they are good for approval.  For drugs like insulin and biologics, it's not enough to show the pk and cmax values and call it a day.  They have to go through more rigorous Phase II and III studies and the cost of this makes it not worthwhile.  In recent years, the biosimilar pathway has allowed some drugs to come to market in a more cost effective way, but they still aren't going to be pennies per day like we think of generics. 

I have nothing to be gained by trying to convince someone that pharma companies aren't all evil.  I've worked in pharma and I've worked in other industries and all have their range of good and bad actors with pharma generally being much more ethical.  But, if you want to make real strides in reducing healthcare costs in the U.S. (which I think should be the end game), focusing all of your ire on pharma companies is pissing on a forest fire. 

 
We in VT have been crossing the border to buy low-cost poutine for decades. We won't let Big Cheese's predatory pricing policies keep us from our curd.

 
It's ridiculous that we spend more % of our GDP on health care than any industrialized country.  Why don't we change the law on Medicaid negotiating prices?  No wonder every citizens ####### is sore.

 
Serious question. Aren't patent laws according to Article I, Sec. 8, Clause 8 of the Constitution granting the rights of patent and copyright to Congress the reason why other countries CAN FREE RIDE ON US? 

And we want to import this back to the States? 

The OP has it right, just in a roundabout way.  

 
renesauz said:
This is absurd. Drug companies spend billions on lobbying and still post profits in the billions. You've bought into the lies their lobbyists have pushed. An even bigger lie is that the costs are necessary to overcome the high costs of researching drugs. Huge portions of the research are funded by government grants, and conducted by physicians-in-training as part of their education. TO make things even more nefarious, drug companies often will make tiny tweaks to the formulary in order to allow them to apply for (and usually receive) new (patents). INsulin is not significantly changed from it's original form 60 years ago, yet generic insulin does not yet exist because of just such tweaks.

The pharmaceutical business is the best example of capitalism gone wrong in America today, and needs to brought to heel.
Click to expand...
these things HAVE to show up in public filings.  You're aware of this, yes?  So, no, not really.

 
Trump proposed a new bidding process for drugs as a candidate and projected Medicare savings of $300B a year which would be very impressive if he could pull it off considering we only spend $100B a year in total.

 
rockaction said:
Serious question. Aren't patent laws according to Article I, Sec. 8, Clause 8 of the Constitution granting the rights of patent and copyright to Congress the reason why other countries CAN FREE RIDE ON US? 

And we want to import this back to the States? 

The OP has it right, just in a roundabout way.  
Click to expand...
I get all this.  This is why this issue is so dang infuriating.  This is a really complicated situation ("lotta ins, lotta outs, lotta what-have-yous").  We are dealing with principles of free market, capitalism, socialistic tendencies, health of our populace, health of our economy.  There are a TON of things to consider, and "importing drugs from Canada" seems like the laziest, most simplistic, cop out sort of thing to do.

Some things I THINK are true

1) Drug manufacturers make fantastic, amazing, life saving medication.  And boner pills.  This is good.

2) Drug manufacturers, being corporations in a capitalist system, are driven by greed and a profit motive.  This is neither good nor bad.  It just is.

3) The profit motive referenced in (2) drive the companies to research and develop more and better and effective drugs referenced in (1).  This is good.

4)  If Drug companies were limited in their pricing, would it affect R&D?  We need to think about this.

5) But hold on a second -- the US provides all sort of R&D funding to drug companies?  How much?  Should the government off-set this funding by mandating price controls on certain things?

6)  But seriously, what would be the effect of price controls on healthcare in this country?  On development of drugs?  Shouldn't someone ACTUALLY do some thought about this instead of blindly importing Canada's socialist system?  We want to encourage R&D.

7)  I get it that we don't have a purely capitalistic system -- take for example drug patents and generic drugs.  That is clearly a bastardization of capitalism.  But a lot of smart people got together and studied the issue and decided that this system would benefit americans by making lower prices, but it wouldn't completely stifle innovations.

(8)  WHY CAN'T WE PUT SOME ACTUAL THOUGHT INTO IT AND COME UP WITH A REAL SOLUTION RATHER THAN SUCKING ON CANADA'S TEAT?

@IvanKaramazov, would like to know your thoughts. I am really surprised to hear you back Warren on this. 

 
May I make an efficiency argument? It would require a serious re-thinking of patent law and its current jurisprudence and congressional reach. That's why piggybacking off of Canada is easier. It's inefficient to restructure that which is. 

That is not -- NOT -- to say that is the best policy. It is just that which is. Sweet J, great topic. Look forward to everyone's responses.  

 
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