Canada Tries to Stop Flow of Drugs into the US

As more and more cities and states set up websites and pass measures to allow for importing price controlled Canadian drugs into the US to control the rising cost of healthcare, Canada is starting to take notice on the impact of such practices on it’s government run healthcare system. Canada doesn’t like what it sees, and for good reason. Canada has a population of around 30 million and is not set up to handle the volume of medications needed to supply a country like the US with it’s aging population of over 250 million.

The Canadian Health Minister is considering a number of measures that would severely limit the ability of Canadian doctors to co-sign an American prescription in order to fill a prescription in Canada. One measure would require that the Canadian doctor actually, physically examine the patient before signing a prescription. Canada wants to protect it’s cheap medications and realize that if things continue the way they are going, pharmaceutical companies are going to demand price increases, thereby driving up the costs for their own citizens.

What most Americans fail to realize is that the reason medications are cheaper in Canada is because the Canadian government made deals with the pharmaceutical industry to either accept price controls or else they would create their own generic industry and not recognize American patents. So the pharmaceutical industry figures some revenue is better than none and agreed since there were still free markets where they could price their drugs to recoup the R&D costs to develop new medicines. Also, Canadian citizens pay more for their drugs by way of much higher taxes. The current income taxes for Canada are;

Federal tax rates for 2005 are:

16% on the first $35,595 of taxable income;

22% on the next $35,595 of taxable income;

26% on the next $44,549 of taxable income; and

29% of taxable income over $115,739.

And Provincial / Territorial tax rates (an example) in New Brunswick

9.68% on the first $32,730 of taxable income, +

14.82% on the next $32,732, +

16.52% on the next $40,965, +

17.84% on the amount over $106,427

Not to mention the higher sales tax paid by Canadians. So if Americans think that government run and/or subsidized healthcare would be cheaper for them, they should look at the real cost to run the Canadian healthcare system.

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