Cheap Meds From Canada, Eh?

“For the first time in HHS history, we are open to importation,” Secretary of Health and Human Services (HHS) Alex Azar told reporters in July.

- Mike Riggs

The Trump administration hopes this policy change will lead to cheaper prescription drugs for American consumers. Alas, it’s not quite that simple.

The “importation” Azar was referring to, sometimes called “reimportation” or “parallel trade,” involves importing drugs to the U.S. that are already available here. That doesn’t make a lot of sense until you consider that the Canadian government, a prime target market for parallel trade, negotiates prices with pharmaceutical manufacturers, while in the United States prices are set by a complex interaction between drug makers, insurance plans, and Medicare bureaucrats. The result is that a manufacturer can sell the same cholesterol medication, made in the same type of factory under nearly identical conditions, for more in the U.S. than it can in Canada. To Americans, it can appear that Canadians are better served by their health care system than we are by ours.