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About Drug Costs In Canada

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To The Editor:

I really enjoy Jack Bobos columns in the National Underwriter, and being 68, I can appreciate his point of view on how many of our life insurance principles and traditions seem to be relegated to the “back burner.”

I happen to be a Canadian, but am in the process of relocating back to the U.S.
Getting back ones green card is another chapter, even though we lived here for 13 years, and I am on Social Security and Medicare.

I think I can fairly accurately fill in some of the pieces that Jack referred to in his Nov. 25 column

First, I think it is most important to understand that the general consensus in Canada is one of great acceptance of a large and invasive federal government. There are thousands like myself not in love with the parliamentary dictatorship, but Canadians, en masse, keep re-electing the Liberal government, which leans to the far left and fosters massive government control.

How come drugs are so cheap in Canada when most of them are from the U.S.? Lets suppose the Bobo Drug Company has a drug that it wholesales for $1. You and I as consumers pay $3 retail at the drug store. The marketing manager for Bobo Drugs suggests distributing in Canada, a market of 28 million people. Now comes the rub! The Canadian government dictates the drug entry and the price. It looks at Bobo Drugs and decides, “We will pay you 50 cents for the drug.” Its take it or leave it, so you decide to take the deal. Your drug will now retail in the Canadian market for $1.50, and thus the busloads will cross from Detroit, Michigan, to Windsor, Ontario, to get those “cheap Canadian drugs.”

But why are Canadian busloads heading to the U.S. for drugs? Because the drugs arent available in Canada. The government said “no deal” or the U.S. manufacturer said “no” to the cut-rate government offer.

This leads me to the question: Arent the U.S. drug companies that buy the Canadian government offer dumping? As I see it they are, but do you think the Canadian government is going to throw up a roadblock? Cheap drugs for all the Canadians, and now a brand new “cottage industry” exporting drugs to the U.S. Why, that means a host of new Canadian jobs. But it is my understanding that the Pharmacy Association in Canada is quite concerned as they feel they are fostering an illegal activity, exporting drugs to the U.S.

As an aside to Jack, it might be interesting for him to research the Canadian drug industry. With the government dictating the terms and prices, Im sure hell find little money available for R&D.

As I mentioned earlier, the Canadian scene is drastically different than here in the U S. You must be immersed in the philosophy that government knows best and will certainly take care of you. After all, you certainly cant take care of yourself. For instance, as a senior when living in Canada, I enrolled each Aug. 1 in the senior medical plan, which was a gift from the Canadian government. I paid the first $100 for my drugs, and balances were “free” until July 31 of the following year. “Free” … right! Did I fail to mention that in Ontario the provincial income tax is 50% of what your federal tax is?

For those in the U.S. who want to jump on the Hillary and Bill bandwagon, be aware! Look to the North if you want to see how well it doesnt work. For certain, only those sitting in the wagon will surely benefit at the expense of those who pull the wagon.

Sorry for the rambling, but I hope it helps in trying to discover the “how come” of the drug mess. Lord only knows what happens in Mexico.

Cam MacMillan, CLU
Vero Beach, Fla.

Reproduced from National Underwriter Life & Health/Financial Services Edition, January 13, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.