WASHINGTON — Canadians are furious about the Trump administration’s plan to import their prescription drugs. And some of them are determined to stop the proposal in its tracks. 

Trump’s plan, which was announced late last month, would allow states, wholesalers, and pharmacies to import cheaper drugs from Canada. It’s a long way off from being implemented, but Canadians are baffled that America would look north to lower its own drug prices, and indignant that such a plan could exacerbate an already pressing drug shortage issue plaguing the country. 

“You are coming as Americans to poach our drug supply, and I don’t have any polite words for that,” said Amir Attaran, a professor at the University of Ottawa, who calls the plan “deplorable” and “atrociously unethical.” “Our drugs are not for you, period.” 

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In the face of opposition, Canada’s health minister will meet Monday with pharmacists, patients, and industry officials to discuss a response. The minister, Ginette Petitpas Taylor, has publicly pledged to “ensure there are no adverse effects to the supply or cost of prescription drugs in Canada.” 

For the advocates likely to fill the room, that means stopping American businesses from importing Canadian drugs.

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“It’s time for it to crash and burn,” said John Adams, the board chair of the Best Medicines Coalition, a coalition of Canadian patient advocacy organizations, who will be joining the meeting by phone. “Canadians may die.”

The meeting will almost certainly be just a first step in a long and complicated process potentially involving obscure trade laws, international treaties, and some cutthroat diplomacy. 

In advance of that meeting, STAT spoke with nearly a dozen trade and health policy experts in Canada and the U.S. to determine how, exactly, Canadians could thwart Trump’s plan — and how drug makers might just thwart it for them. Here’s what we learned. 

Adding pharmaceuticals to Canada’s export control list

The most expedient way for Canada to stop Trump’s plan would be to put prescription drugs on its “export control list,” a watchlist of sorts that would require exporters get permission from Canada before shipping drugs across borders, multiple experts told STAT. 

It’s an odd proposition, to be sure. The list is used primarily to prevent export of deadly weapons. Canada has, however, used the list to protect key products, including certain lumber, and even peanut butter. 

The process is relatively simple: Canada’s federal cabinet, known as the Governor in Council, can add goods to the export control list at any time. There are some limits on what goods can go on the list, but the government essentially has carte blanche to protect any good against the possibility of shortages, particularly if it can make the case that doing so is in the interest of national defense. The cabinet is technically required to open any such proposal for public comment, but the government has the power to bypass those rules. 

“Putting a particular good on the export control list is relatively quick and easy,” Geoffrey C. Kubrick, a partner at the Canadian law firm McMillan, told STAT. 

Passing a new law

While Prime Minister Justin Trudeau’s government has unilateral power to control exports, Parliament could also pass a law explicitly banning exports of drugs meant for Canadians. 

It’s not uncommon for Parliament to do so, even when the cabinet has the power to act unilaterally. 

“Sometimes legislative actions are taken for the demonstration effect, just so it’s really, really clear that this is not an activity that Canada is in any way sanctioning,” said Laura Dawson, who heads the Canada Institute at the Wilson Center in Washington. 

And veteran MPs are already familiar with this issue: Parliament nearly passed a similar law in 2005 after the U.S. Congress passed a law two years earlier giving the secretary of health and human services the power to greenlight drug importation. That bill would have empowered Canada’s health minister to “prohibit, by order, the export of a drug or class of drugs” if the government determined such exports could lead to a drug shortage. 

The proposal was eventually tabled because the ruling party lost power and Parliament dissolved. 

There’s a major roadblock to passing a similar bill in the coming months, however: Parliament is out of session and the country is in the midst of a federal election. Members of the left-flank New Democratic Party have criticized the ruling Liberal coalition for a lackluster response and called for the legislature to reconvene to address the issue, and the opposition Conservative Party has called for the federal government to act to prevent drug shortages.

Advocates like the Best Medicines Coalition have also called for an emergency session of Parliament, but that option seems unlikely. 

Imposing new tariffs or taxes on drugs

Canada could also impose an additional fee — essentially a tariff —  on exports of pharmaceuticals from Canada, thus making the drugs prohibitively expensive for Americans. 

“It would be easy for other countries to stop this with tariffs,” said Dr. Bob Kocher, a former special assistant to President Obama and a venture capitalist. “The U.S. has certainly broken the glass already on using tariffs to protect local markets.”

But the Wilson Center’s Dawson isn’t so sure that’s a great idea, or even possible. These sorts of taxes, for one, are very unwieldy and nobody uses them, she told STAT. 

“Why would you want to use the least efficient instrument to block these sales, when Canada could simply impose an export control?” she asked. “They could put those spike belts across the highway for trucks that have pharmaceuticals in them … but not so efficient.” 

Asked if there was a precedent for such a move, the closest example Canada trade experts could point to was Canada’s restrictions on exports of certain lumbers. As part of a long-simmering trade dispute, Canada has at times required exporters to pay a tax when exporting lumber to the U.S. However, even that is an imperfect corollary.  

The wait-and-see approach

Steve Morgan, a professor at the University of British Columbia, predicts at least in the short term Canada’s strategy will be “watchful waiting.”

The reasoning: Even if the U.S. moves forward with its plan and Canada doesn’t respond, existing contracts and business practices make it almost impossible to send prescription drugs across the border. Attempts to do so, experts said, could result in drug companies canceling contracts with wholesalers, wholesalers canceling contracts with pharmacies, and pharmacists being called before professional review boards. 

While importation is popular with American consumers (a recent poll found that 80% of Americans surveyed liked the idea), the success of the plan will largely depend on the willingness of wholesalers, both in the U.S. and Canada, as well as retailers, to play ball. 

Wholesalers, in particular, would have to decide it’s in their best interest to break or renegotiate contracts with pharmaceutical companies that often expressly ban the export of drugs sold for Canadian consumption, and the sales of drugs in the U.S. that weren’t originally packaged for the U.S. market. 

“The reason they do this is because there’s a big difference in the wholesale price of a drug outside of the U.S. versus inside of the U.S.,” said Neeraj Sood, a professor at the University of Southern California, who studies the drug supply chain. “It’s written to prevent importation.” 

Sood added that such provisions are commonplace. 

Wholesalers who have been accused of breaking these contracts have ended up in court, according to Sood, who disclosed he was involved in one such case, although he declined to provide STAT with further details. 

And early signs show wholesalers are  less than eager to renegotiate these contracts: The Healthcare Distribution Alliance, the U.S. lobby group representing distributors, has called Trump’s plan “simply not worth the risk.” 

Then there’s the possibility that the threat of importation will give states, wholesalers, and pharmacists the leverage to negotiate better terms with manufacturers, making it unlikely they’d need to import drugs in the first place. 

“My suspicion is in the short term … it gives the retail sector greater leverage in trying to negotiate some kind of better terms of trade with manufacturers,” Morgan said. 

There’s already early signs this is occurring. 

Florida Gov. Ron DeSantis, for example, has said drug makers approached his office after it began pushing an importation bill with offers to sell drugs at a cheaper price. 

Morgan said: “It’s premature to panic.” 

In the meantime, that won’t stop Canadians from grousing over the prospect Americans creeping across the border and taking their cheap drugs. 

“There is no Canadian constituency for this,” the Wilson Center’s Dawson said. 

Canada’s major newspapers have been peppered in recent weeks with editorials slamming the plan. “Donald Trump, keep your hands off our drugs,” the Globe and Mail wrote

“Welcome,” the paper added, “to the socialist paradise of Canada, Mr. Trump.”

  • It’s ok, Urko. Your small town must have been a nice place so others flocked there. No doubt that your departure also helped the town’s image.

    And all Trump has done is reinforce that insecure people always need to be followers and never leaders. Have a wonderful day – time to return to civil discourse so you’re on “ignore.”

    • This dog-fight retoric has to stop, it does not solve anything. We in the US need to indeed clean up the system, we are paying for “extra’s” (politicians’s votes) that other countries are not even allowed to get involved with. We pay more because there is a lot of money not going to patients but to rich influencers and the political campaigns. If we want to pay less we need to change our system. It seems to make sense in Canada and other nations.

    • R: you did NOT post your address .. are you a racist?

      Illegal aliens should be dropped here: 125 Broad St., NYC. It’s the USA HQ of the ACLU. Let them do some real work.

    • It seems to make sense in Canada and other nations.

      Canada is 87% WHITE. You think the USA should become like Canada? How white of you ..

  • “Many cases had proven Mexico and Canadian must obey to Trump or face down.”

    Hey, Einstein .. our small town had 0.3% Hispanic in 1990. After decades of chaos, it is now 8%. How’d that happen? Klingons drop them off?

    Duh.

  • “The reason Canada has substantially lower prices for prescription drugs is that Canada (like a lot of countries) regulates the prices.”

    That’s absolutely wrong. Pharm companies have global planning. USA has been been “the sap” in this for decades, under BHO, GWB, and Slick Willie. DJT says that is going to end. About time.

    • You are absolutely correct, Urko.

      Canadian drug prices are cheaper because Canada waits for US R&D, which Americans must pay for, and then steals the technology to make the drugs — without incurring the costs of developing them.

    • Anna – everyone pays for R & D, and it is minimalistic compared to what is spent in your US political system on all the corrupt entities (lobbyists, middlemen, PBM). Your high drug prices pay for your excess baggage INCLUDING huge sums that buy / sway your politicians !! The US needs to stop that corruption !

    • The US needs to stop that corruption !

      Stop the unions from lobbying? Sure. And pigs will fly, too.

  • The reason Canada has substantially lower prices for prescription drugs is that Canada (like a lot of countries) regulates the prices. Because the prices they can sell their drugs for in Canada (and a lot of other countries) are too low to adequately compensate the pharmaceutical companies for their development costs and provide a profit (I know, a bad word in Canada), the pharmaceutical companies charge much higher prices in the US. Bottom line is that US is subsidizing the low drug costs in Canada (and a lot of other countries).

    • The higher pricing in the US covers the huge costs of lobbyists, middlemen, PBMs. The amount of money spent on BUYING POLITICIANS is what makes drugs in the US more costly. In other countries that CORRUPTION is simply not allowed. So – the US is not subsidizing any other country or anyone else, but it is subsidizing its own fat cats – over the backs of the citizens that your corruptable politicians are supposed to serve.

    • The higher pricing in the US covers the huge costs of lobbyists, middlemen, PBMs.

      Prove it. Show your math. You can’t, and you know it.

  • Solving the problem of the high price of drugs in this country will never happen by importing drugs from Canada.
    This administration has been avoiding the real issue to the problem. This problem all started with Obamacare.
    This healthcare kustafuck left loopholes for the PBM’s to steal billions of dollars from every state,the federal government and every American, and from every client these PBM’s have. PBM’s are systematicly putting Independent Pharmacies , supermarket pharmacies and specialty pharmacies out of business. This is where the high price of drugs problem is! Period,end of story !! Until this government sees this and does something to change it, NOTHING will change !! All Mr. Trump cares about is winning the 2020 election! I guess PCMA gave his campagne a huge contribution !!!!!!

    • Urko …. You obviously have no clue about the pharmacy business and what part the PBM’s play in this cash cow of theirs . Why don’t you go to pbmwatch.com and learn something. Why would the Attorney General’s from 31 states be going after the PBM’s for fleecing this country? I guess they have nothing better to do……. Like you !!!!! Walk in my shoes for 1 day buddy !!!!!

    • Why would the Attorney General’s from 31 states be going after the PBM’s for fleecing this country?

      Chuckles (D), they are (D), and get paid for suing non-(D). Duh.

      You did not provide one number to prove your point. Grade: F

  • While I can rarely support any position associated with Trump, the importation of quality drugs at reasonable prices, from any country, makes good sense.

    The article opens with a Canadian professor objecting, which is his prerogative, but stating they are Canada’s drugs and, therefore, untouchable. Sorry, professor, no such ownership is understood, imputes, valid or even sensical. We live in a global economy, so contain your outrage and direct your outrage to your premier, instead of acting like Don Quixote.

    Our seniors and citizens have subsidized your cheap drug prices for years. Time for some equity.

    • Canada (a.k.a., “America, Jr.”) is claiming national sovereignty. Good luck, trying to force your will on them — they have guns, too.

    • I can’t find sensical in a dictionary. Can you help me out. It seems like it should be a word.

    • Well, @Urko is thinking that Canadians might go to guns over this issue – let’s be sure to tone down the rhetoric and ensure he’s on his meds, no matter their country of origination 😊.

      @Michael – if my comment’s only impact was to elucidate that “sensical” is, indeed, an actual word then so be it.

      Please see: https://www.lexico.com/en/definition/sensical.

      Peace to you and @Urko

    • R, you know nothing. Windsor is across from DETROIT.

      You don’t think CDN police there are NOT armed?

      LOL, ROTFL

    • “Our seniors and citizens have subsidized your cheap drug prices for years. Time for some equity.” ?????? Haha !! What you have subsidized through high prices is the fat cats : lobbyists, middlemen and PBMs . Vote for change that eliminates this abusive selfish lot, and no longer allows politicians to be corruptly bought !!

    • Vote for change that eliminates this abusive selfish lot, and no longer allows politicians to be corruptly bought !!

      Socialist BoyNee became a millionaire, with a lifetime of tearing down the greatest country on Earth. He’s not doing squat.

  • They should be furious. It’s a lazy, cowardly way of regulating American drug prices by importing Canada’s price-regulated medicines.

    • Canadians should be furious, but not for this reason. What will happen is that drug companies will leave Canadian market. They will only sell in the US where they could do that at whatever price they want. Cut off losses and focus on the market that allows some profit. What sane CEO would not love that?

    • “It’s a lazy, cowardly way of regulating American drug prices by importing Canada’s price-regulated medicines.”

      Did you ever take Econ 101? This is about demand and supply. CDN only has enough for its people, and have suckered the USA into subsidizing their costs. CDN is *never* going to allow more than 10000000s to import. Duh.

  • Love the Globe & Mail headline !! Indeed: Canada has done tonnes of legwork for affordable health care, with the higher taxes that all Canadians pay !! For a “friendly” neighbour to just leech off that work, without any notion of overhauling its own utterly corrupt “system” milked by fat lobbyists, PBMs, middlemen, etc. speaks of utterly despicable, selfish, disrespectful grab-and-go pluck-the-neighbour attitude. Instead of such short-term thinking (the US has a 10 times bigger population) that does not remotely solve the US problems: do your own royally overdue overhaul, where politicians can not be bought by pharma moneys, and clean up your politics !!!

    • As an American I agree wholeheartedly. Americans are selfishly refusing to pay more in taxes, refusing to hold politicians accountable for shamelessly taking drug company money, and thinking it is no big deal crossing the boarder to purchase drugs intended for Canadian citizens. Canada has a NHS because they believe every citizen is entitled to health care and are willing to pay the additional taxes to fund the care. Perhaps Americans should take a look at what they have compared to Canadians and rethink their decisions related to universal healthcare coverage so they don’t have to resort to stealing another country’s drugs! Americans are greedy thieves with with a notion false sense of entitlement!

    • U.S. Sen. “Spreading Bull” (D) attacked PPACA on med-devices.

      You think that is going to change, you need help. Now.

  • Are they protesting just because it was “Trumps Idea” if they Write the bill it better restrict Canadians from seeking medical care in the US. Protectionism is a two edge sword. We get most of our drugs from China and India now or they are Manufactured in the US. I’m not sure this would have a huge effect on the supply lines or inventory as the RX market is Global and they would just order more from somewhere else.

    • You misunderstand. Drug company’s give the US market a more expensive price. A manufacturer based in Canada was already importing drugs to the US and visa versa. The difference is they charge more for the US market along with packaging, etc. What they are banning is pharmacy’s buying drugs meant for the canadian market and selling them on the US market

    • Ger is correct. I will add; big pharma gets away with charging American’s higher prices because they line the pockets of politicians. The same politicians who could stand in their way, but choose not to do so because of their own greed.

    • “I’m not sure this would have a huge effect on the supply lines or inventory as the RX market is Global and they would just order more from somewhere else.”

      Absolutely wrong. Pharms are global. They only produce enough units, from their order books. More than 3M Americans, trying to buy pharms in CDN, would devastate the CDN supply chain.

      NYTimes editor once said 90% of posts were useless. This area has proven that theory.

  • It is time for the US to do to the pharmaceutical companies what insurance companies do to hospitals and physicians: impose a most favorable clause that says that the companies cannot charge more in the US than the lowest price they charge outside the US.

    • “Most favored Nation” clauses work only when you have the legislators willing to keep the hammer over the pharma company’s head. As in all matters Medical Services, be it in the USA or in Canada, you pay for what you get. The long-going narrative is Canadians (of means), in need of immediate care, will come to the USA, not the other way around. There is a crucial reason and without going into the economics or quality, let’s just say pharma has been driven from innovation from Countries that do not assess financial incentives. Manufactures are “forced” into pricing in Canada, or the patent will be broken. This Socialist Medicine of care and products serve to drive down costs for the Country, but not for the increased knowledge of care or medicine (other than the Country that is truly paying for it-the USA-cost of products and premiums). Where there is profits, there is innovation. If you look at the time for new medicines to get into Canada, the track is much longer and the ability to get those new therapies proven or not, sometimes fall by the wayside (there are a lot of medicines NOT available to Canadians). This is the typical myopia of need of the many versus the need of the few, the costs are more important than the pressure on progress. Approaching ALL Medical Care by percentage of household income spent in Canada versus the average spent by Americans is probably less (I don’t know), but innovation starts and ends where financial incentives compete for success in large or small markets. Canada, along with Europe and other nations have been capable of “riding the coat tails of the USAs willingness to meet the demands of higher costs, etc, without all who WANT and NEED these new innovations and the other nations not paying the (fair share) price for them. If history and trends are any measurement, two things can occur: 1. Nations around the world begin to pay their fair share of the cost of development of new products and care, or 2. The USA just won’t continue to pay the cost of new innovations and new care on its own and will dial it back to a point that NO ONE WINS and ALL LOSE. That should be the larger concern. Canada only makes/imports enough for their own citizens and really that is the governments job. The Canadian government is not there to support or guide the USA in drugs manufacturing, unless there would be a net positive for Canada. It’s that simple.

    • “a most favorable clause that says that the companies cannot charge more in the US than the lowest price they charge outside the US.”

      That is what DJT said. Congrats on repeating what DJT said.

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