SURVEY SAYS: Are Canadian Prescriptions an Rx For Drug Costs?

October 2, 2003 (PLANSPONSOR.com) - You have to credit officials in Springfield, Massachusetts, for thinking outside the box when it comes to dealing with soaring prescription drug costs - and, FDA concerns notwithstanding, they appear to have an idea worth contemplating, at least in the considered judgments of at least three state governors (Illinois, Minnesota, and Iowa) who have commissioned studies on the practicality of buying prescription drugs north of the US border. This week we asked readers what they thought of the effort, if not the result.

Nearly half (46.8%) of this week’s respondents supported the move to encourage workers to buy prescription drugs from Canadian suppliers – and a goodly number of those “strongly” supported the move.   Another 23.4% supported the notion of at least considering the option.   One reader noted, “States, like consumers, are being forced to work with shrinking budgets and, consequently, must look for alternative vendors to fill the growing demand for prescription drugs.   With more voters unfortunately demanding lower taxes there is no other choice but to pass along the cost to the consumer or look for alternative options to meet the demands of the public.”

Another supporter said, “My parents recently moved several of their more expensive prescriptions to a Canadian supplier on a referral from one of their doctors.   On just 3 prescriptions, they will save over $100 per month – which is about 15% of their SS payments!   Perhaps this will be a wake-up call to the US that this is out of control – prescription coverage, particularly for the elderly, is nearly worthless; the costs of some prescriptions are shamefully outrageous; the controls over competition are beyond greed, and the politicians’ promises to help the elderly in this regard are empty.”

Or, as another said, “My retired father buys his prescription drugs from Canadian sources and has had no problems.   Buy the same medicine cheaper?   Why not?”

Another observed, “We currently go across the borders of the United States to secure goods that cannot be competitively made here; this is now encouraged with NAFTA etc. But now we are going across the border to buy goods that are made here and are sold cheaper in other countries than in the United States. Drug manufacturers should tune in to the world nightly news more often.”

Opposition Stance

Just 2% opposed the notion on safety grounds (the FDA has conducted a couple of “sting” operations that have highlighted some potential shortcomings in how the drugs are packaged/shipped), while only about 6% oppose it on “other” grounds.   However, speaking to the health issues, one reader noted, “Are Canadians dying in droves due to unhealthy manufacturing processes?”

As for those other concerns, another said, “I hate the high cost as much as the next guy, but we have to realize that if drug prices are regulated or controlled, then the pharmaceutical companies won’t recoup their money for developing new drugs (and R&D is extremely expensive), and we are going to stop seeing innovation and the life-saving and life-bettering drugs that come out from the industry every month now.   The breaks they give to third world and other countries have to be made up for other places.”

But a number of readers opposed saw more than just the need for R&D investment at the heart of the higher costs, including one who said, “Why not target the problem directly instead of trying to figure a way around it?   The problem seems to be the pharmaceutical companies being able to advertise and spend close to 3 times the amount of money on marketing and administrative costs than they do on research and development!   I’m so sick of seeing TV commercials and magazine ads for prescription drugs that I’ve stopped watching prime time TV and reading magazines!”

No Impact?

 

Nearly 15% thought it wouldn’t make a difference ultimately, because “…there will be a counterbalance that wipes it out in a year or so. If it isn’t an increase from the Canadian drug firms, it will be a border tax on drugs or something else. As long as we (USA) demand and expect the best health care, and still can pay, cost will continue to increase (econ 101).”   The remaining 5% said they really didn’t have, or hadn’t yet formed, an opinion on the subject.

Solving the “real” problem was on a number of readers minds, including one who cautioned, “Today when you ask almost any participant in the plan how much some drug costs they can only tell you their co-pay.   It never occurs for them to shop around; many plans don’t even allow you to shop around and still be covered.   Too few are watching the gate.”

Another noted, “I have been reading where some of our senior citizens are taking bus trips to Canada and realizing savings that cover more than the cost of the trip.   Others are sending drug runners.   We should do whatever it takes to make it practical and cost effective for our US citizens to purchase quality prescription medications at the lowest competitive cost.   Then maybe our senior citizens will be able to take their bus trip to some place a little more warm and little more exciting.”

But this week’s Editor’s Choice goes to the reader who noted, “You really should not have conducted this survey the week we got our benefit sign up packages.”

Thanks to everyone who participated in our survey!

I support the move.   We need to do something about the cost of prescription drugs, as well as all other medical costs.


c and d.   Certainly I oppose it on safety grounds, but we have to look at the big picture as well.   As much as I hate the high cost as much as the next guy, we have to realize that if drug prices are regulated or controlled, or in other ways the pharm. cos don't recoup their money for developing new drugs (and R&D is extremely expensive), we are going to stop seeing innovation and the life-saving and life-bettering drugs that come out from the industry every month now.   The pharms can give free drugs to Africa to fight AIDS, and recoup their costs through higher costs in countries such as ours.   The breaks they give to third world and other countries have to be made up for other places.   Just as the government gives food and supplies to poorer nations, and we pay for it through our taxes, so too with drugs, although, instead of paying through our taxes, we pay through higher premiums.   I'm certainly open to hearing ideas of how the drug companies can still get the money they have now for R&D but have us pay less, and have the subsidized countries still get the medicine they need.   I'm not sure how you accomplish that, though.

(Living in NJ, surrounded by drug companies, you really get to hear the other side.  


Thanks for providing the forum.   What we all can agree on is that there are no simple answers here.

How about the states, cities and employers looking to cut Rx costs bankrolling additional qualified federal employees who will reinspect drugs imported from Canada on behalf of FDA?


(d) Oppose the move for other reasons:   Why not target the problem directly instead of trying to figure a way around it?   The problem seems to be the pharmaceutical companies being able to advertise and spend close to 3 times the amount of money on marketing and administrative costs than they do on research and development!   I'm so sick of seeing TV commercials and magazine ads for prescription drugs that I've stopped watching prime time TV and reading magazines!   What part of this don't health care consumers get?


It won't matter in any event...we're still just 'pushing the costs around' not addressing the real costs.

how about next week you ask companies if they know their unfunded liability for medical costs?   I think we all still have our heads in the sand.


(e) Won't make much of a difference, as each savings in healthcare in put in place, there will be a counterbalance that wipes it out in a year or so. If it isn't an increase from the Canadian drug firms, it will be a border tax on drugs or something else. As long as we (USA) demand and expect the best healthcare, and still can pay, cost will continue to increase (econ 101).


Well, I wondered when we'd get to weigh in on this question.   I have to believe that the action by the three gov's to study purchasing Canadian drugs is designed to accomplish several things at once; find a source of cheaper drugs, put pressure on the drug industry to reign in prices and feather their own political nests.   Americans have always been creative and that extends to corporations as well as individuals.   I have to go with a version of (e) Canadian prices will rise or the supply will so tightly controlled that it could no longer be a source of relief to either states or the retirees taking the bus across the border.   We don't need a band-aid approach, we need a full-blown revision in the health care delivery system.


I am interested in seeing how Canada will handle this additional demand.   Unfortunately, I cannot foresee the Rx costs staying as low for too much longer, since they will have to up production to keep up with the additional (U.S.) demand.   The positive side is, if, as a pharmacist in the US, you are unable to find employment, I'm sure you would have no problem finding it over the border.


To answer your question, I support the move.   There is not assurance of 100% safety on drugs sold in the US vs. same drugs sold in Canada.   States like consumers are being forced to work with shrinking budgets and consequently must look for alternative vendors to fill the growing demand for prescription drugs.   With more voters, unfortunately demanding lower taxes there is no other choice, but to pass along the cost to the consumer or look for alternative options to meet the demands of the public.    Even if drug companies choose to raise the cost of prices in Canada, in the mean time the cost savings that will be realize by states is still a benefit.

I think is rather arrogant to assume that only in the US can we be assure that our prescription drugs are safe.   If tax payers insist on shrinking the tax revenue base of their states, they will soon realize that they are also asking their leadership to choose alternative options to provide the services that we want, but don't want to pay for.


I wholeheartedly agree with the move.   My parents recently moved several of their more expensive prescriptions to a Canadian supplier on a referral from one of their doctors.   On just 3 prescriptions, they will save over $100 per month - which is about 15% of their SS payments!   Perhaps this will be a wake-up call to the US that this is out of control - prescription coverage, particularly for the elderly is nearly worthless; the costs of some prescriptions are shamefully outrageous; the controls over competition are beyond greed, and the politician's promises to help the elderly in this regard are empty.    Maybe eventually those prices will be forced up as well, but in the meantime, save it while you can!


While it is noteworthy to take a stance on high prescription drug costs, the fiduciary responsibilities dictate that the objectives of the shareholders (that is to make money) takes precedence.    The question of whether or not the shareholder will be hurt by the stripping of US drug manufacturers from their portfolios should be the deciding factor and not whether the mayor wants to make a political statement


(b) Support at least considering the move.    This sends a message to the drug companies.   Cost is critical especially to seniors.   It's time for the drug companies to review their profit margins.


b.   Are Canadians dieing in droves due to unhealthy manufacturing processes?


My retired father buys his prescription drugs from Canadian sources and has had no problems.   Buy the same medicine cheaper?   Why not?


I would fall under a firm "A" and support the move.   Pharmacy manufacturers have US business and other Plan Sponsors over the proverbial barrel when it comes to providing prescriptions to our employees/constituents.    If this move helps regulate this virtually extortionist industry, I'm all for it! Don't even get me started on direct to consumer advertising ...   :o)


I support the move.   I take several medications and I can't believe how much they increase in cost each month.   Unfortunately, I am not able to get generic medications for a couple of them and now I'm paying over $100/month for them.   I'm in my mid-40's so I can't imagine what the costs will be like when I get in my senior years.   I love the Canucks! Anything we can do to get our costs reduced makes sense to me...


Speaking for myself -

I support at least considering the move.   My family has to purchase an over the counter drug that is used daily for a family member.   We found that we could save 80% if we purchased it in Canada.   We called the drug company and spoke with customer service, found out that the drug in Canada is the same as here, so we obtained it at a considerable savings.   In some cases it would probably work, and in others, where drugs need to be at a controlled temperature, for example, it probably won't.   Most likely a combination of local and international methods would be the best compromise to maintain health while controlling costs.


I think my answer to the survey is (b) at least considering it.   I am outraged at the advertising that the drug companies are doing in the US because I believe it increases prices that are already difficult to afford.   If turning to Canada is a way to put those companies in a competitive situation I think it is worth a shot.   On the other hand, maybe my answer is (d) because ultimately I think the price of Canadian drugs will rise.   There isn't a magic bullet.


I fully support the move.   Many seniors do not have prescription coverage, and cannot otherwise afford the drugs they need.  


I wholeheartedly support the move.   The arrogance of it all - Americans think we are the only ones with safe drugs - it isn't so.   The drug companies think they can continue to hold Americans captive to their exorbitant prices - I pray it isn't so.   And the rich politicians in bed with the big business - why don't we throw their fat behinds out of Washington once and for all and elect people who care about Americans, their lives, their jobs, their health, their schools, their homes, etc. etc. etc.   By the way, I'd be retired right now if we had a prescription drug program for retirees.  


e.   I fully support the move, but in the end, the prices will be hiked in Canada, too.


Support the move purely as a free market decision.   Consumers (in this case the city) should be able to buy the products they desire from the sellers that offer the best deal.  


(a) I definitely support the move.   It's about time we sent the drug companies a strong message.   They've been jacking up the prices in the US for way too long.   If the drug companies are sending lower quality products out of the US, they should be held accountable!   That is just plain wrong.   Either everyone gets quality drugs, or they should be reprimanded for sending inferior products to Canada, thereby creating a situation where the purchasers of those drugs are putting their health in peril.   If the FDA thinks the Canadian drugs are inferior to the US drugs, should we even consider purchasing drugs from a company that sends lower quality products to someone who doesn't pay their over-inflated price?


a: support the move as I believe it will encourage fairer pricing strategies in the US.  


I am past the deadline but I have to vent. I think all U.S. entities, including public, private & government, should purchase from north of the border. It disheartens me to see soaring health costs and record breaking profits in the same year from drug companies. I do not care about soaring salaries from athletic stars because I can voluntarily not purchase their game tickets, but I can not not purchase health insurance....both athletes and drug companies are in the same class of earning too much.

All governors should follow suit!!!


A bit of A and E.   It is a way to try and stem the short term costs, but in the long run the drug companies will end up getting their profits one way or another - either by raising the prices in Canada, the US or both.


(a) support the move

Let's face it... The Rx companies have us by the throat and the politicians and bureaucrats are in their big deep pockets.   Since when did we not have the right to shop around in a free market economy?   I think that the price fixing that Rx companies and politicians have been doing is immoral.   Why not take our almighty dollar north, south or anywhere if the products there are both cheaper and are the same Rx brand?   Canada doesn't seem to have a problem importing Rx products from our country; why should we?


A) Definitely support the move.   Even if the Canadian prices are raised you would still benefit from the "exchange rate" from US to Canadian currency.   I appreciate our MN governor for that reason alone. The only reason my mom (62) has not retired is for medical coverage specifically health & drug coverage (heart medicine).


a) support the move,   I think we have to combat increasing medical and insurance costs and this is a beginning.   We, personally, and as a nation must make an effort to control costs, they have a negative effect on every aspect of our economy.   So many people don't care about the cost of anything if it is paid by insurance, they don't bother to think about who ultimately pays the price.   Insurance companies just pass along overpricing, inefficiencies, waste, frivolous lawsuits, fraud and abuse in the rates they charge us.   You can't afford the insurance, but you can't afford not to have it, it is a vicious circle.


Support a nationalized health plan with prescription coverage.   As long as no one regulates the prices in this country US citizens will carry the majority of drug costs.   Canada and other countries negotiate the prices charged and if the companies will not lower them they can't sell there.   No one has the 600 pound gorilla might to negotiate for US consumers.   And please don't offer the US consumers don't shop around for medical services lecture I got recently.   When your sick/injured there is a limit on how much cost comparison you can physically do even if your health plan allowed it.

You really should not have conducted this survey the week we got our benefit sign up packages.


With ever increasing prescription costs, I would support using Canadian pharmaceuticals.   It looks like those with health insurance are now supporting 15.6 million without it and untold numbers of illegal aliens. Medical issues of all sorts will be front burner issues in every election next year, and I'm sure prescription coverage will be primary among these.


b) In the hopes that, rather than "e" happening, the reverse will happen and US pharmaceutical companies will lower their prices to avoid losing sales.


I support the move.   Health should not be exploited/manipulated so as to be construed as empowerment by corporate greed -- as apparently exhibited by US drug companies.  

My mother, a WWII vet US Navy Registered Nurse currently living in a retirement center on assisted living, is perhaps in the increasing minority of individuals who have a chance of managing their drug costs due to effective retirement planning.   From everything I've heard, most of us in the US may not be so lucky in our elder years.


My answer is (b).   I would rather that the state of Mass, or any other for that matter buy US made goods and services as much as possible, but the cost of prescription drugs these days has increased from 'prohibitive' to 'outrageous.'   The state, by considering the move, is sending a strong signal to the drug companies that they are on 'watch.'

The larger question of healthcare in the US in general (not specifically addressed by your survey): affordable, quality healthcare in the world's preeminent developed country (the US of, course) should be a basic civic amenity, right up there with 'national security', 'highways', 'school education', and 'social security' (among other things).


I (a) support the move. It appears there isn't enough competitive pressure on drug companies to force them to lower prices in domestic markets. Hopefully, opening the door to Canadian sales will help reduce costs for Americans.


This is an interesting question (as are most of your surveys).   I guess I've always believed that Canadian drugs were cheaper because the Canadian government subsidized them for its citizens.   If that is the case, then it is ethically wrong for us to take advantage of that by buying drugs in bulk for ourselves.   If that is the case, then I choose (D).

If that is not the case, then I would have to say A or B.   It's worth investigating, but I still have never heard the definitive answer about WHY the drugs are cheaper in Canada.   That should be what we're trying to do - determine the why.   If we don't know why they are cheaper we might shoot ourselves in the foot with such a move.


Makes my brain hurt, the drug prescription drug problem is much bigger than Canada.   I'm not worried about safety problems with Canada. I hear they have electricity and flush toilets now. Eh...   Like a real modern country.

I do long for the days when medical coverage meant that you picked up most doctor visits and prescriptions yourself and your medical insurance was for the annual full physical and when you actual became ill.   Seemed like a good system, sniffles you pay, cancer insurance kicks in.   That way everyone was watching costs.   Today when you ask almost any participant in the plan how much some drug costs they can only tell you their co-pay.   It never occurs for them to shop around, many plans don't even allow you to shop around and still be covered.   Too few are watching the gate.

I have to vote (f) because a good answer is beyond my current knowledge base.   In other words, I'm wimping out of an answer.


Support the move

To date actions of this type and the publicity that evolve around them have been the only incentive for drug manufacturers to rethink their pricing positions within the United States.

We currently go across the borders of the United States to secure goods that cannot be competitively made here, this is now encouraged with NAFTA etc. But now we are going across the border to buy goods that are made here and are sold cheaper in other countries than in the United States. Drug manufacturers should tune in to the world nightly news more often.


I have been reading where some of our senior citizens are taking bus trips to Canada and realizing savings that cover more than the cost of the trip.   Others are sending drug runners.   We should do whatever it takes to make it practical and cost effective for our US citizens to purchase quality prescription medications at the lowest competitive cost.   Then maybe our senior citizens will be able to take their bus trip to some place a little more warm and little more exciting.


«