Article

2004-11-11 Great White North

Canada cannot be the 'drug store of the United States'

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Posted by Mark Espinola 2004-11-11 4:44:48 AM|| || Front Page|| [3 views since 2007-05-07] Top

#1 This is complete BS. The reason Canada cannot be the drug store of the United States is because if sales from Canada start significantly impacting US sales the drug companies would refuse to export to Canada or allow them to make the drugs under license. The simple fact is US consumers massively subsidize the cost of drugs in Canada.

Posted by phil_b 2004-11-11 5:11:18 AM|| 2004-11-11 5:11:18 AM|| Front Page Top

#2 It is a delicious irony. I've been waiting for he push back on this for a long time. What we are starting to see is market forces raise its marvelous head.

BTW the same thing happens in Mexico when all the snow birds go over the border to get their prescriptions filled for the next year.

Posted by Douglas De Bono 2004-11-11 7:28:04 AM|| [http://www.DouglasDeBono.com] 2004-11-11 7:28:04 AM|| Front Page Top

#3 US consumers massively subsidize the cost of drugs in Canada.

Apparently it's price controls that subsidize the price of drugs in Canada. If it is still worthwhile for US companies to sell their products to Canadians, then I would suggest that someone south of the border is getting just a little bit ripped off.

Posted by Rafael 2004-11-11 9:08:12 AM|| 2004-11-11 9:08:12 AM|| Front Page Top

#4 Raf, I think it has to do with the drug patents. My understanding is that Canada told the US dug companies, "We'll respect your patents...IF you sell us our drugs cheep..."

Posted by Seafarious 2004-11-11 9:26:14 AM|| 2004-11-11 9:26:14 AM|| Front Page Top

#5 Sefarious, I doubt it. That would start a trade war. I think it was just a big customer throwing its weight around; "If you don't sell to us cheap we'll buy from your competitor cheaper." Canada as the Wal*Mart of drugs. We are getting ripped off and the Canucks are getting a bargain. Time to decontrol durg prices world wide. Let the free market be free.

Posted by Mrs. Davis 2004-11-11 9:32:16 AM|| 2004-11-11 9:32:16 AM|| Front Page Top

#6 Actually, I seem to remember that Seafarious is right. The drug companies caved because Canada is a small market. (A letter from a Canadian in the local paper the other day smugly referred to this as, "The Canadian government negotiated cheaper prices from the drug companies.")

Of course, the US could retaliate and refuse to recognize Canadian patents, but as we all know, nothing is ever invented in Canada...

(I googled around a bit, looking for an article on the patent issue. I found many articles on the subject, all of which said that the topic was, like, real complicated. So that's a big help.)

Posted by Angie Schultz 2004-11-11 10:13:46 AM|| [http://darkblogules.blogspot.com] 2004-11-11 10:13:46 AM|| Front Page Top

#7 reading about drug patents is like math - very hard

Posted by Barbie 2004-11-11 10:35:29 AM|| 2004-11-11 10:35:29 AM|| Front Page Top

#8 #1 has it spot on...US taxpayers subsidized the us drug companies which sell to Canada and then the Canadian govt subsidizes these purchases lowering the cost to the Canadian citizen. if US taxpayers never footed the bill for development of the drugs the prices would be much, much higher.

Posted by Dan 2004-11-11 12:14:01 PM|| 2004-11-11 12:14:01 PM|| Front Page Top

#9 Think about it. If this weren't true, why would it be illegal to re-import the drugs back into the U. S.? Did Congress ever pass a law saying that a refrigerator made in the U. S. but exported to Caqnada could not be sold in the U. S.? So why did they for drugs?

Posted by Mrs. Davis 2004-11-11 12:17:32 PM|| 2004-11-11 12:17:32 PM|| Front Page Top

#10 I suspect the negotiated Canadian drug prices are actually sufficient to cover production costs, plus a little profit. Even though the Canadian market is not huge it is big, especially as a single 'sale' (government price negotiation), so the 'little' profit is still significant.
What the Canadian purchasers are NOT paying for is R & D, which is a huge part of the true cost of pharmaceuticals. The US customers pay that, which is not a big ripoff of the customer.
And of course the US customers also may for all those advertisements, which really could be considered a ripoff. So don't respond to the ads and they'll go away.
Neither the US nor the Canadian government is subsidizing US purchases of drugs through Canada - the other US customers are. At some point the US drug companies will not agree to sell 'subsidized' drugs TO Canada; Canadians will have to start paying their full share of R & D or go buy drugs somewhere else. Where?

Posted by glenmore 2004-11-11 1:08:15 PM|| 2004-11-11 1:08:15 PM|| Front Page Top

#11 Phil B has the most correct answer.

Drugs are basically cheap to make. The reason drugs are expensive is that it takes 600 to 800 million dollars per drug to develop the science and confirm the drug safety in the clinic. After that, manufacturing the drug is generally pretty inexpensive, but the developers of the drugs have to charge enough to make back their sunk costs of research. This is why drugs are expensive. Fortunately, they can make back their research and manufacturing costs by selling at FREE-MARKET rates (what the market will bare) in the US alone. Most of the rest of the world represents markets where drug companies can make more than it costs to manufacture the drugs, but not enough to pay for the drug development. So, they sell them cheaper into those markets (Plus... the people in those markets don't have as much money to spend and so it's more ethical to charge them less for their drugs. If you comparing GDP per Person verses cost of drug in a country, you generally find that each person pays a relatively similar portion of their respective GDP for drugs. We pay more because we have the highest GDP per person on the planet.

Canada (and most of Europe) take advantage of the US market by threatening the drug companies with "forced licensure" of their drugs to local companies. Foreign companies using a forced patent license pay 2-3% over the manufacturing costs to the owner of the drug patents. It makes more sense for the pharma to sell their product at a lower cost into Canada rather than let Canada facilitate the theft of their patent rights.

See... now doesn't it make better sense. Canada really doesn't want a bunch of US consumers descending on them and making an issue of their cheaper drugs. We could have cheaper drugs too... if we wanted to stop research on new/better drugs. Personnally, I would rather pay more for my drugs and have money being spent developing better drugs that will help me live a longer/better life.

But, that's just me. I'm sure other people would rather have the Patent rights of our Pharma industry ignored for cheaper drugs today. 'Course... with no patent profits, nobody would develop any more new drugs.

Posted by Leigh 2004-11-11 1:14:45 PM|| 2004-11-11 1:14:45 PM|| Front Page Top

#12 .."they sell them cheaper into those markets (Plus... the people in those markets don't have as much money to spend and so it's more ethical to charge them less for their drugs."

So, what is the deal with Saudi Arabia? Drugs are very cheap there. Is the Government of SA subsidizing them 100%?

Posted by Anonymous4724 2004-11-11 1:36:14 PM|| 2004-11-11 1:36:14 PM|| Front Page Top

#13 ..but as we all know, nothing is ever invented in Canada...

Now wait just a cotton-pickin' minute - I *love* my ATI graphix card... ;)

Posted by Bomb-a-rama 2004-11-11 2:54:52 PM|| 2004-11-11 2:54:52 PM|| Front Page Top

#14 Don't know about 100%, Anon, but I think Saudi Min of Health buys at a discount, then discounts THAT cost (at a loss to its budget, obviously) which explains the low cost at the register. Morocco and Egypt also have very cheap drugs by following this method.

Does Canada discount drugs a second time a la Saudi? Anyone know? The fact this explanation was never brought up during campaign amazed me, cuz I heard a few expert economists explain it as such. Buy cheap, take a loss and stuff doesn't cost much. Wow. The Canadian miracle. So I guess drugs in US would be as cheap as Canada and others if we were willing to have taxpayer pick up the loss cost.

BTW, Illinois guv, Rod Blagojevich, will run in '08 and is padding his resume by having Ill. defy FDA in setting up system so Illinoisans can get Canadian, Irish, and UK meds in Land of Lincoln. Only problem is that Canucks, Irish, and UK health ministries are not at all happy about it. Too unilateral for them.

Posted by chicago mike 2004-11-11 3:09:52 PM|| 2004-11-11 3:09:52 PM|| Front Page Top

#15 I don't know the specifics with respect to drugs in SA... but if you compared the relative GDP per capita you would find out that:
US GDP/Capita (2000) = $35K
SA GDP/Capita (2000) = $10K
Based on that, I would expect at a minimum that drugs would cost 3 times less. Probably, my guess would be that SA isn't to finicky about where it gets it's drugs. They could easily buy them from Indian manufacturers who basicaly have license from their government to pirate the entire US pharmacopia without paying any patent license fees... so they could easily be 10x cheaper than the same drugs found in the US. Note: The politically correct verbiage used the the WHO for stolen patent drugs created in third world countries is "Generic" drugs... which means something entirely different here in the US. In the US "Generic" means the patent has run out. In international drug trade (managed by the WHO) generic means stolen.

Posted by Leigh 2004-11-11 3:26:52 PM|| 2004-11-11 3:26:52 PM|| Front Page Top

#16 Classic free rider situation. US and a few European companies fund 90% of the drug development, to the tune of ~$200B annually, and the countries whose scientific institutions and corporations are too small or lame to handle this scale of development end up hacking the drugs and creaming off the profits and the social benefits.

Posted by lex 2004-11-11 3:32:11 PM|| 2004-11-11 3:32:11 PM|| Front Page Top

#17 Fortunately, they can make back their research and manufacturing costs by selling at FREE-MARKET rates (what the market will bare) in the US alone.

There is nothing fortunate about it if you have to buy drugs instead of sell them.

There is NO Free-Market if re-importation is illegal. Make it a truly free market and the world price will go up and the US price will go down. THAT'S a free market and a fair one.

Posted by Mrs. Davis 2004-11-11 3:33:05 PM|| 2004-11-11 3:33:05 PM|| Front Page Top

#18 What Mrs D said. If your country doesn't subsidize R&D, then your consumers should at least pay world prices.

Posted by lex 2004-11-11 3:52:14 PM|| 2004-11-11 3:52:14 PM|| Front Page Top

#19 Amen. Certainly, (un)common sense needs to enter into the equation somewhere - and the socialist twaddle needs to be ejected from it. There will be no R&D without a profitable return to justify it. There is no reason why the US consumer should be forced to bear the burden alone - when the entire world benefits from such R&D.

Free-Market Capitalism created these medical wonders, and Free-Market Capitalism should be the mechanism by which they come to market.

Posted by .com 2004-11-11 4:01:11 PM|| 2004-11-11 4:01:11 PM|| Front Page Top

#20 Regarding patents...

Chinese software 'manufacturers' can reproduce almost anything we export, at much lower cost. How far would "reimporting" software get?

Posted by Dishman 2004-11-11 4:18:38 PM|| 2004-11-11 4:18:38 PM|| Front Page Top

#21 We're merely outsourcing socialism.

Posted by eLarson 2004-11-11 4:43:24 PM|| [http://larsonian.blogspot.com] 2004-11-11 4:43:24 PM|| Front Page Top

#22 Let me present a couple of simple analogies that might be more easily grasped:

Microsoft spends a lot of money developing operating systems for computers. They then sell that software in the US for a certain price which we in the US are willing to pay. In another country, Microsoft sells the software for less, because they can afford to pay less... but still more than the marginal cost of burning another copy. Microsoft makes agreements with the distributors in those countries whereby they agree not to re-import those cheaper copies back into the US. Do we US consumers have a right to those cheaper copies? How much pressure does the US government put on foreign governments to honor us copyrights on software? Enough to prevent wholesale pirating? LOL... in some cases the US government helps some (China) and in others (Mexico?) maybe more/less pirating happens.

.com is right that socialist twaddle comes out much more when it comes to drugs... because peoples lives are on the line. Suppose you have an HIV epidemic in your country (India) and you can't pay the full market price? You gonna let your people die because some company won't give you the drug at the price you CAN pay? Hell no, you are just going to make a copy of the drug and those "Greedy Capitalists" can just suck wind. 'Course, now I've created a manufacturing facility that can make HIV drugs indistinguishable from the ones the US drug companies make. When I've treated all the sick people in India, and I still have extra capacity... why can't I just sell that extra drug on the international market? It'll make me money! It's the same drug. It will save lives. Sure, the Patent belongs to some US company... but they don't need the money, they have plenty. I'm saving lives, I'll even sell that drug back into the United States.

That's going to kill the goose that lays the golden eggs. Research lives off the profits of the novel new drugs that are sold at premium prices. Stealing the profit from the system results in slowing the development of new drugs. Personally, when I get cancer, I want the newest and best drugs available... no matter the cost. I'm not sick now, but I'm willing to pay higher costs (and let the rest of the world free-ride) so that I get my treatment when I need it.

Re-importation is penny-wise pound-foolish thinking. 'Course Canada wants to continue the free ride. Let 'em.

Posted by Leigh 2004-11-11 4:44:34 PM|| 2004-11-11 4:44:34 PM|| Front Page Top

#23 Amen, Leigh, regards the golden goose, especially.

Life is hard. It will get a LOT harder if you're a stupid socialist parasite dependent upon others. This is classic stuff, on the fucking "3 Little Pigs" level, folks. Free rides kill the pony that brung ya.

F**kin' Duh.

Posted by .com 2004-11-11 4:49:38 PM|| 2004-11-11 4:49:38 PM|| Front Page Top

#24 One other comment I might make: the US has become the world powerhouse for drug development, sales, and profit - because it's a free market that protects intelectual property.

It's a huge jobs machine and it sucks in jobs from Europe and Asia to keep it fed. The European drug companies are dying on the vine from price controls... and they have slowly begin to shift their headquarters and operations here to the US. In the small biotech company where I work, half the researchers are from Europe and Asia. They can't keep their best people because the US is the center of the industry: we have the stage, the stagehands, choreographers, the song writers, the orchestra, the ticket sellers, and the actors to make the "show go on". They can buy tickets, but we create the magic.

Posted by Leigh 2004-11-11 5:12:54 PM|| 2004-11-11 5:12:54 PM|| Front Page Top

#25 Leigh - Terrific analogy - kudos to you and your peers!

And multiply this 100x for all of the other high technology markets which either are or are becoming dominated by US companies. This is extraordinarily simple: free markets work. The others do not. Reward the creators - or lose the ability to create and become a 2nd or 3rd World country.

They can hate us (ostensibly), but they can't live without us (literally).

Posted by .com 2004-11-11 5:19:07 PM|| 2004-11-11 5:19:07 PM|| Front Page Top

#26 If you think there is not reimported software and illegal software being sold in the US, you are naive. However, MS has taken steps to minimize its presence. That, among other reasons, is why MS went to the mfrs and gave them breaks to get them to include the OS on new machines. Most people won't go to the trouble to use a gray market or illegal software because the price differential is not sufficient and there are a lot of other hassles with service and quality. The software industry has been agressive about prosecuting users of illegal software. Individuals don't upgrade to the extent companies do and companies shouldn't risk prosecution for using illegal software.

But the drug companies are greedier than Gates. They make the price differential so great that it is worth it for people to go to Canada or Mexico to get their meds. And they have a lot less control over the end use customer than does MS. There's no need for customer support and no way for the drug company to tell where the drug you're taking came from. When the differential gets sufficiently great, market forces will start to overcome legal restraints. Re-importation is coming, legal or illegal, because it is fair to the consumer and the drug companies are too greedy to modify their pricing to prevent it. Unfortunately, that, along with the empty new drug pipeline, is why the goose may die. If it does, Drug company gred will have more to do with it than re-importation.

Posted by Mrs. Davis 2004-11-11 5:38:45 PM|| 2004-11-11 5:38:45 PM|| Front Page Top

#27 Mrs D - I hear you -- and seldom disagree with you, but on this topic I do:

Who owns the drug?

If a no-shit / no-games Free Market were in effect, would not the price / profit margin have to meet with the reality of what people were willing to pay? If no one buys the drug because the price is too high, they also lose their investment in the R&D and all assoc costs incurred bringing the drug to market.

The current situation is insane. You / we / everyone can't have it both ways for long.

Which do we prefer? No new drugs because it's financial suicide to invest in the process - and everyone goes without - or a Free Market where the price is determined by the market and Gov'ts that give a rat's ass about their citizens subsidize the price and drug companies continue to produce new drugs?

Those are the long-term choices I can see.

Posted by .com 2004-11-11 5:54:48 PM|| 2004-11-11 5:54:48 PM|| Front Page Top

#28 Leigh and .com, the argument that the US is a drugs powerhouse becuase its a free market is both false and irrelevant to the original issue. The argument is false becuase in a globalized world industries gravitate to centres of excellence that are largely unrelated to consumption. This why chips are made in Taiwan, tropical fish are bred in Singapore and Formula One racing cars are made in the UK.

Its irrelevant becuase the issue is Canada and others are free-riding and not paying a fair share of R&D costs which are the main cost of drugs. Allowing re-importation of drugs will either reduce drug company profits or force them to raise prices in Canada (almost certainly the latter). The Canucks know this and that is why they are very worried about reimportation.

Posted by phil_b 2004-11-11 6:05:14 PM|| 2004-11-11 6:05:14 PM|| Front Page Top

#29 phil_b - The "excellence" you refer to gravitates to those centers where their expertise is appreciated. To equate a microbiologist with years of self-paid education with an assembly-line worker is rather silly - even in the chip biz: clean rooms can be built anywhere and workers of moderate intelligence can be trained to operate the mfg process almost anywhere.

The R&D must be differentiated from the Mfg, IMHO.

The drugs issue is definitely skewed in cost to the R&D, and this is likely the case with most high-tech: the materials and mfg pale in comparison to the R&D required to define the process.

Posted by .com 2004-11-11 6:24:41 PM|| 2004-11-11 6:24:41 PM|| Front Page Top

#30 The problem with free market capitalism in the pharmaceutical industry is that for certain rare diseases, you'd be SOL if the drug you needed to stay healthy cost you $10,000 annually. So you have a case where the rich are healthy, and the poor, well, tough shit.
The question of subsidy has to come in somewhere, whether subsidizing R&D, or allowing people to get the meds they need at a reasonable price. This is of course dependent on whether we actually care about the health of everyone in a society. It has nothing to do with providing or getting free rides.
The health minister is justifiably starting to shit bricks about the impact this will have on Canada's health system.
As an aside, there was a similar situation with medical imaging, but in reverse. American companies wanted to set up shop in Ontario providing medical imaging services at a lower cost and faster service than what was available locally. They were told to F-off, the fear being that they would, *gasp*, undermine (read: make better) Ontario's health system.

Posted by Rafael 2004-11-11 7:14:00 PM|| 2004-11-11 7:14:00 PM|| Front Page Top

#31 .com, Leigh: Thank you for the spirited defense of free markets.

Regarding Taiwan and chips: There is wonderful engineering of computer components and subsystems in Taiwan. That's because Taiwain has free markets, educated and hard working citizens, and proximity to much of the manufacturing, and relatively strong respect for intellectual property rights. What you don't see much of in Taiwan is fundamental research, nor the sales and marketing that connects the products and services to the customer. What Taiwan does is one piece of the value chain. For the most part the chain starts and ends in the US. Taiwan is in many ways an offshore engineering facility for the US economy. The growing economic links between Taiwan and China and the US and China are changing the dynamic somewhat, but the fundamental processes of value creation haven't changed.

Posted by Classical_Liberal 2004-11-11 7:19:35 PM|| 2004-11-11 7:19:35 PM|| Front Page Top

#32 .com, reimportation is the issue for me. Are you saying you support the American government making a law that prevents Americans from buying a drug at the lowest price possible world-wide because the American people have a responisbility to pay for the R & D of drug companies? Because that's what I'm against and if you're for it, I sure would like to understand why.

Posted by Mrs. Davis 2004-11-11 8:21:15 PM|| 2004-11-11 8:21:15 PM|| Front Page Top

#33 Mrs D - I'm for making whatever changes are needed to solve the current insane situation. I do believe in intellectual property and free markets. Both of these have been bastardized by opportunist governments around the world - creating an insane market, an unfair burden upon Americans, and a situation which might just end with a huge reduction of R&D - and that helps no one.

I guess that sums it up for me.

Posted by .com 2004-11-11 9:43:29 PM|| 2004-11-11 9:43:29 PM|| Front Page Top

#34 Its called DEREGULATION and FREE MARKET CAPITALISM - top-down or bottom-up, the decentralized American systems are custom-made for one-on-one competition with anybody or any group! Maybe the Canadian mil might be able to afford their modernizations, instead of buying such small handfuls of equipment as to be akin to a perm-bankrupt local township police force occas armed with army tanks, instead of being a de facto major sovereign world power.

Posted by JosephMendiola 2004-11-11 9:43:54 PM|| [http://n/a] 2004-11-11 9:43:54 PM|| Front Page Top

#35 OK... Here is my thought experiment on re-importation:

I'm a drug company. My scientists identify a protein which appear only on the surface of cancer cells. We celebrate! Our patent lawyer runs out and patents the target protein. Our 17 year drug patent clock starts to tick down. We float some stock (maybe $50 million to fund this experiment.)

Based on identifying that target, my scientists create an antibody that targets that protein and kills the cancer cells. (We patent the antibody... restarting the 17 year clock.) After paying for the research to identify the protein, the antibody, and after extensive testing in animals, we float some more stock (maybe $200 million). I create an FDA compliant manufacturing facility and get FDA approval to begin testing the cancer killing antibodies in humans. Up to this point, I've probably spent $50 million. Now comes the expensive part; Human testing.

I go out and recruit a cohort of 200-300 doctors who I will pay to identify appropriate patients and manage their care. The FDA will ask me to do a series of human experiments, dosing at a minimum probably 2,000-5,000 patients. For those patients, I will pay for: the manufacturing facility that created the antibody, the drug necessary to treat the patients, the doctors who are recruiting/treating patients, a raft of additional tests (which are extraneous the actual treatment to show that the patients aren't suffering some unknown side affect), and all the normal tests and exams necessary to control and treat cancer. For a bunch of those patients, I will pay for "comparative" treatment to show my drug works better.

In dribs and drabs, I float another $300 million in stock to pay for the clinical trials.

On top of that medical treatment, I will pay to have people generate and collect all the study data. The clinical trial(s) paperwork has to be double and tripple checked QA to meet FDA requirements. It's a mountain of paperwork.

Think of how expensive it would be if you got cancer. Now, to turn it into a clinical trial, double the cost and multiply it by thousands of patients. By the time I'm done testing in the clinic, if my drug gets approved, I've spent (let's make this cheap) $550 million. Maybe if I have bad luck, the drug only works "a little bit" and FDA thinks side affects are to unpleasant or not acceptable, so I don't get approval and I'm out $550 million for nothing... but drug development is a crapshoot. Maybe the FDA will OK it after another $50 million in testing? In the end, it takes me 5 years from the time I discover the antibody. I have 12 more years on my patent.

Whoot! My drug is a success and slays cancer cells and leaves the rest of the body (mostly) untouched! I have a blockbuster drug. My patent runs 12 years before the drug goes generic. I have to make back my $550 million plus make a profit so my investors stay happy and I want to make additional money so I can research more drugs to replace my blockbuster when the patent runs out. My researchers have identified more proteins that occur on the surface of other cancers that I want to try developing more antibody cancer killers.

Lets say, the antibody I identified kills prostate cancer. I have 220,000 cases anually in the US... and my antibody will work on 1/2 of them. So, 110,000 potential customers annually. Over the 12 years my patent runs, I may get 100,000 treatments a year... so maybe 1.2 million cases total to recover my investment and make a profit. Just pulling a number out of the air here, let's say it costs me $500 to make enough drug to treat one patient.

How much should I charge to: Get back my initial investment, make a profit, pay my sales force, pay corporate income taxes (before dividends!), pay for more research, pay a "risk surcharge" profit to my investors for investing in such a chancy scheme, pay liability insurance to protect me from product liability lawsuits, get more money so I can get the antibody drug through more clinical trials to apply against another type of cancer. See... this all piles up, and I ONLY HAVE 12 YEARS BEFORE ANYBODY CAN MAKE A GENERIC. I've got to charge a lot, because I risked a lot to create the blockbuster.

Bottom line though: I created the drug. It was my and my investors money that was risked. I own the drug. I own the world-wide rights. I have a right to ask whatever I want for the drug. Sky is the limit. As a consumer who has prostate cancer... you can decide to pay, or not.

Now, let's assume, as Mrs. Davis suggests, that any drug I ship out of the US might turn right around and target my 100,000 patients. Normally, to sell into Canada I would negotiate a price with the Canadian Health Ministry and they would agree not to re-import it back into my main market, the US. As long as I sell it above $500 per treatment, I make some more money. But, now that the law says the drug MUST be allowed back into the US... I tell Canada: Pay my US market price or go flip.

Canada says: "But Candians don't make as much money as Americans! You Americans make $55,100 per capita (2003). We Canadians only make $29,700 per capita... can't you give us a 46% break in price to reflect our dire financial condition caused by our socialist paradise? We're dieing from prostate cancer here! We need a break!"

"Sorry, no can do." I say. "If I give you a 46% break, I just killed the price I can charge in the US and I can't make back my sunk costs in research and profit in the short time I have before my drug goes off-patent."

"Damn!" say the Canadians. "Those heartless greedy Americans! They already make 46% more than us and now they want to kill us from prostate cancer! Those Bastards!"

When the Canadians get back from their vacation, they decide that the only way they can help Canadians with prostate cancer is to make my drug in their country without my authorization, in spite of my patent because they have "an over-riding public health need" I'm not "working my patent" and I won't sell my drug to them at the price they like. (Don't laugh... this is the way negotiations in internatinal drug sales goes... there is always the treat of forced licencing or outright theft of your patented product for "the public good".)

I won't tell the Canadians how to make my antibody... but they have biochemists and they can work back from a sample of my drug to re-create it. So they do. Now, I have NO DRUG SALES TO CANADA instead of a lesser sale.

This is what you are looking at when you are going to require re-importation of drugs.

Posted by Leigh 2004-11-12 12:53:03 AM|| 2004-11-12 12:53:03 AM|| Front Page Top

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