Importation From Canada Does Not Lower Drug Costs

For several years, some healthcare reformers (and now back-to-back Presidents) have endorsed the importation of prescription drugs from Canada despite ample evidence suggesting it would do almost nothing to lower drug spending and could put patients’ health at risk. On the surface, importing drugs might seem like a logical policy, but it is not. The risks are too great and the rewards too small.

The United States’ closed drug distribution system, overseen by the Food and Drug Administration (FDA), makes American pharmaceuticals the safest in the world. It also stimulates investment in innovative new treatments. If states are allowed to import drugs directly from Canada, those crucial benefits will be put at risk.

Drug safety is of utmost importance. American consumers don’t have to worry about the drugs they take because the FDA rigorously scrutinizes U.S. medications to ensure safety and effectiveness. Canadian drugs overwhelming come from other countries. In fact, roughly 85% of Canadian drugs are imported from China or other less industrialized foreign nations that do not receive the same testing and regulations that Americans take for granted when they fill their prescriptions.

The World Health Organization estimates as many as 1-in-10 medicines made in developing countries are counterfeit. Importing drugs from Canada could allow fake medications into the U.S. pharmaceutical market, with potentially dangerous or even deadly consequences for patients. This is not conjecture—it has already happened. In 2018, federal prosecutors fined a Canadian online pharmacy $34 million for exporting counterfeit and unapproved drugs into the U.S., including two cancer drugs that did not contain a single active ingredient.

There is no testing infrastructure in place in the U.S. that would guarantee the safety of Canadian drug imports. And, Canada has made it clear they will not ensure exported drugs meet U.S. standards. Consumers would be on their own, risking their health in pursuit of cost savings that do not live up to their billing.

Some drugs do sell for less in Canada than they do in the U.S.. But additional costs to process, ship, and inspect imported drugs would drive up prices. Plus, Canada already struggles to meet their domestic demand for prescription medications. Canada already struggles to provide sufficient drug supplies for its citizens. Further reducing availability through imports could destabilize the system and cause prices to rise. The Canadian government would likely impose surcharges on exports to protect drug availability for Canadian patients. 

The U.S. would also have added costs to create and perform the drug import testing essential for protecting public health. In the end, there would be no—or at best minimal—savings. In 2005, the Congressional Budget Office determined that importation would only reduce drug spending by roughly 1%, with patients unlikely to share in even that small reward. That’s hardly a justification for imported drugs’ health and safety risks.

There has not been a Secretary of the Department of Health and Human Services—Democrat or Republican—that has ever been willing to certify that imported drugs would pose no risks to health and safety or generate significant cost savings for American consumers. Drug importation is a short-sighted, short-term strategy to make drugs more affordable. The high cost of health care should be addressed, but it must be done in a way that makes sense, protects patients’ health, and continues to support the innovation that makes America the leader in developing new and more effective pharmaceutical treatments. Importation accomplishes none of these goals.

Congress must stand firm against any legislative proposals that would enable the importation of potentially harmful drugs from Canada. It’s simply not worth it.

David Williams is the president of the Taxpayers Protection Alliance.