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Trump’s Canada Drug Import Plan Can’t Happen Without Big Pharma

Bloomberg with Lisa Kramer 13 August 2019

U.S. President Donald Trump’s plan to import cheap Canadian drugs overlooks a crucial fact: it can’t happen without the cooperation of major drugmakers, the very industry he’s trying to undercut.

Even as alarm grows in Canada over the prospect of Americans draining their supply of medicines, there’s little reason to believe the U.S. proposal would worsen the country’s drug shortages. But the fear plays into the hands of the powerful drug companies seeking to protect their U.S. profit margins.

“Instead of attacking the Trump administration for this proposal, it’s easier to make sure that this proposal does not come into existence in Canada,” said Marc-André Gagnon at Carleton University in Ottawa, who focuses on the political economy of the pharmaceutical sector. “But what we do have is a fear-mongering campaign as if it will be a catastrophe for Canadian supply.”

Canada’s supply chain is beholden to the drugmakers. Pharmaceutical companies sell most of their drugs through wholesalers and distributors who in turn supply the front-line hospitals and pharmacies under agreements that the products are intended for the domestic market only. Both groups stand to lose from diverting drugs south.

“We’re not in the business of exporting,” said Daniel Chiasson, president of the Canadian Association for Pharmacy Distribution Management representing distributors like Gamma Wholesale Drugs Ltd. and McKesson Corp.‘s Canadian unit. “There is no merit to doing so — in fact, there is a disincentive.”

Selling outside of Canada wouldn’t serve the wholesalers’ customers and could put them at risk of being cut off by the manufacturers, he said. Exporting in bulk requires a license from Health Canada — something that typically only happens during humanitarian aid efforts, he said.

“The ones that may do so, do it at a significant risk,“ Chiasson said.

Previous Skirmish

Pharmacies are supplied with the agreement they won’t intentionally sell to non-Canadians, said Sandra Hanna, vice president of the Neighborhood Pharmacy Association of Canada, whose members include Loblaw Cos.’ Shoppers Drug Mart and Rexall Drug Stores.