It's technically illegal for US citizens to buy pharmaceuticals from Canada, but that's not stopping anybody. Indeed, the trend is gaining momentum at the state level. Pharmaceutical and biotech companies have a range of options for responding to re-importation, such as emphasizing the safety risks of new purchasing channels, limiting shipments into Canada, and getting tougher in price negotiations. Making pricing a trade issue might help the industry, but it's a tough case to argue. If worse comes to worst, companies may need to take legal recourse. If re-importation continues unchallenged, it is likely to lead to US price controls.
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The Medicare prescription drug benefit is a direct attack on Canadian pharmacies that ship drugs to US consumers--and those pharmacies are fighting back.
After decades of public policy debate, the passage of a prescription drug benefit for seniors-Medicare Part D-hardly settles the issue. Indeed, the heavy lifting really begins now because the recently enacted legislation represents a model drawn more in sand than stone. So there is plenty of time and opportunity for all parties to continue to shape this program more to their liking. For the moment, we do know that seniors are slated for drug coverage beginning in 2006 and price controls are off the table. But there are still major questions concerning the implementation. Looming over the whole debate: the specter of rising costs. The Congressional Budget Office's $400 billion prediction-for the ten years spanning 2004 to 2013-has already been characterized as too low. Bush administration aides estimates that the figure should be closer to $540 billion. Given all this uncertainty, the drug industry should be prepared for rough Medicare seas in the foreseeable future.
Drug counterfeiting is on the rise--and drugs with inactive, incorrect, subpotent or superpotent ingredients are entering into the US drug supply at alarming rates. FDA commissioner Mark McClellan, MD, PhD has made it clear that identifying the best means to keep the drug supply safe is a fast-track effort at the agency. And this is not merely a top-priority regulatory effort--Big Pharma firms, fearful of safety problems--and, although they don't say so, lost sales--have lots of incentive to get involved in looking for solutions, too.