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Just How Safe Are US Made Drugs?
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I was very interested to see Senator Bernie Sanders take a group of American diabetics from Detroit to Windsor, Ontario to buy insulin. I used to own a pharmaceutical company in Windsor.

In Canada, the life-saving medication insulin, which was invented in Toronto by Drs. Banting and Best, costs a tenth of what it does in the USA.

Many Americans, who can’t afford the ever-rising costs of their must-have drugs, are flocking to Canada to buy them. Drug prices in Canada (and Europe) are strictly controlled by governments. Unfortunately, Canadian companies are allowed to pirate American and international medical patents and products. That’s a big reason why they are so inexpensive.

Consumers don’t give a hoot about the profits of big pharma or who pays the vast sums for research and development. They clamor for more, low-cost alternatives. The Democrats are making a major issue out of drug pricing, calling low-priced drugs a human right. But then why isn’t food also a human right?

Americans are angry at high drug prices, particularly oldsters who vote for President Trump. Frightened by this prospect, Trump just proclaimed he would henceforth allow Americans to import prescription drugs from Canada. Actually, this has been going on by mail order for a long time. But now we see the prospects of endless busloads of elderly Americans trekking up to Montreal, Toronto, Windsor and Vancouver to buy up Canadian supplies of drugs.

Canadian pharmacists are worried that their always thin supplies will be exhausted by the US, which has ten times more consumers than Canada. The potent US pharma industry is already fighting back, insinuating that the quality control of Canadian drugs is not reliable and that Canadian-made products could be dangerous.

Nonsense. In my firm, we would routinely sample US-made products, particularly nutritionals. Our QC reported that over 70% of the US-made products we tested failed our strict in-house quality control standards for label claims, content, potency, shelf-life and purity. Personally, I avoided many US-made products where a Canadian alternative was available. If I had to take a made-in-USA product, I would stick to those made by big pharma, avoiding ones from small firms and some store private label brands.

But there is worse news about USA-made products. Many of the raw materials used by US pharma originate from China or India. Both nations are known for poor quality control, adulteration, contamination and mislabeling in drugs and food. I sent our QC people to both India and China to evaluate raw materials. They came back with hair-raising stories of filthy conditions, poor records, and contamination. Machines were too often not cleaned between different product batches. Raw materials are sometimes stored outdoors and infested by insects or rats.


Indian and Chinese manufacturing practices are slowly improving. Yet at the same time, western suppliers of raw materials are relentlessly being driven out of business by ruthless price cutting by Asian suppliers. This is how, for example, China came to dominate the vitamin C market, undercutting reputable suppliers from Europe and the United States. US drug chains have cooperated in this process by always selecting the lowest-cost products to make higher margins.

For example, the important anti-diabetic drug, metformin, is now primarily sourced in India, no matter that it is labeled ‘made in USA.’ So we end up with USA prices but Indian quality control. India remains the world’s biggest adulterator of food products. Small wonder Indian and Chinese consumers prefer foreign made products. Back in the day, Greek consumers would not buy pharma products made in Greece for the same reason.

One major source of this problem is so-called ‘de-regulation.’ Getting rid of tiresome government regulation always sounds like a good idea. It’s a Republican mantra. I used to believe in it too. But de-regulation has led the US to make important cuts in pharma quality control, notably in raw materials. Companies are left to police themselves.

The result has been the steady decline of raw material quality and an explosion of exaggerated or just plain fake label claims. Health supplements are a notorious example of wide scale fraud. Canadian-made drugs and supplements are often better quality than products from the US, but they too often suffer from substandard ingredients and lack of policing.

The answer to this problem may be for the US to join the rest of the civilized world by imposing price controls on drugs. Doing so is distasteful and will hurt research and development. But there seems no better answer.

(Republished from by permission of author or representative)
• Category: Economics • Tags: Deregulation, Prescription Drugs 
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  1. Alistair says:

    The drug Company will not allow back door distribution into US market from Canada; no matter where in the world, we buy from the same Drug Companies who are the International Drug Conglomerates, they own the patents and hence, they control the distribution networks.

    Nevertheless, there is a marketing strategy called “Country Pricing”; whereby a drug company prices the same drug drastically lower or higher for a given country, such strategy however forbid back door distribution: For instance, if MERCK or Pfizer want to offer lower prices in Canada, they will not allow back door distribution of the same drug into the US market from Canada, and the Government cannot do anything about that.

    Compare to other countries with Universal Health Care, the Canadian System is the least efficient model; Canada only covers the cost of doctor and hospital but not medications – for the medications, like the US, Canadians will have to use their own private insurance through their employers health plan or other alternatives at their own cost.

    Ideally, amongst the Universal Health Care Models, we should look at New Zealand Model; New Zealand offers Universal Health care but the cost of drug is 1/10 of the Canadian model, and perhaps 1/100 of the US model, because the New Zealand Government Buy Drugs in Bulk for the entire country, which gives them significant bargaining power against Pharmaceutical industries, hence, they get significant discounts from the manufacturers – whereas, in Canada every large pharmacies import their own drugs, which leave them with little or no bargaining power.

    The drug companies will never allow back door distribution into US from Canada, that may lead to equalizing the Prices between Canada and the US market, as such, Canadian will certainly end up paying higher prices, perhaps, at the same levels as their American neighbours.

    • Replies: @Curmudgeon
  2. Dutch Boy says:

    I like Robert Kennedy Jr’s description of the pharmaceutical corporations: “serial killers.” Studies have estimated that around 100,000 patients dies every year from appropriately prescribed and administered medications.The most egregious example was the Vioxx mass murder, in which Merck hid evidence of the drug’s potential for causing heart attack and stroke. The company eventually admitted to killing 3,000 patients (the feds estimated it was 50,000). Ron Unz suspects it may have been as many as 500,000, based on a demographic anomaly of 100,000 deaths above the average for the five years the drug was on the market. They control the Congress and the state legislatures via campaign contributions, they control the medical professions via gifts, subsidies, and control of what is published in journals. Because they are allowed to advertise, they have become a critical source of income for the Press and journalists, which has made criticism of the industry verboten in the media. They control the regulatory agencies via the revolving door between government and business and the financing of the agencies (the agencies actually rely on studies by the industry to evaluate new drugs). I had some hope that Trump would rein them in based on some of his pre-election commentary but this has proven to be a false hope. He appointed industry insiders to the regulatory agencies

  3. @Alistair

    You can’t compare the New Zealand and Canadian models. In Canada, the provinces are responsible for the delivery of health care, not the federal government. What is in place, is a cost sharing system through equalization payments where agreed upon services are done by the federal government. Some provinces have some pharmaceutical coverage of sorts, some not. The same goes for other medical coverage.
    New Zealand with all its islands would constitute less than 4% of the Canadian landmass. Distribution of any commodity in Canada is problematic and adds considerable cost. Canadians that pay attention understand this.
    Where Margolis is dead wrong is on his contention that Canada allows patent infringements. Canada is completely wrapped up in Big Pharma’s web and has been since the late 80s.

    • Replies: @Alistair
  4. But then why isn’t food also a human right?

    It soon will be if China gets its way. The PRC has introduced two amendments to the UN Declaration of Universal Human Rights that would add the rights to food and shelter as primary rights.

    Also, on December 17, 2018, by a vote of 121-8, the UN General Assembly formally extended human rights protections to farmers whose seed sovereignty is threatened by government and corporate IP practices, in The Declaration on the Rights of Peasants and other People Working in Rural Areas, The United States, United Kingdom, Australia, New Zealand, Hungary, Israel, and Sweden voted ‘No.’

  5. Alistair says:

    I agree, Canada is a large country and healthcare is under provincial jurisdiction; yet in New Zealand case the saving comes from the Government control; it’s like LCBO in Ontario which controls all purchases, Import and distribution of all Alcoholic products; Wine, Liquor, Beer etc. – the LCBO procurement extents the entire globe, it gets the best price and quality for its Ontario consumers through large volume purchasing and single point distribution, as such, the entire supply-chain is under control of LCBO which is an agency of the Ontario government.

    Similar approaches could be implemented for acquisition and distribution of Drugs through a Canadian or Ontario government agency, so talking advantage of large volume purchases when negotiating with the big global drug companies for the best price and quality. In case of LCBO however, the aim is to make maximum profit for the Government coffers, a similar agency could be used to lower drug prices for end consumers, yet the same approach could be implemented.

  6. The answer, Margolis says is “price control” on drugs — which he believes is “distasteful ” & “hurtful” to pharma R&D.
    Note – “price control” however accurate that expression maybe, it’s clearly intended to be negative.
    In Australia, the Gov’ agency evaluates all new drugs against existing ones. It does a serious balancing of a new drug’s effecacy, price, & effecacy in relation to existing related drugs. If approved, the agency negotiates a price with the Drug CO. That eventual price is not fixed, each drug (I believe) is negotiated on its own merits. The public then gets a drug that is essentially government discounted. Call it “price control” if you like.
    As for R&D the drug CO still makes a profit — a profit not based on exploitation or gouging the sick. (& let’s not forget how often US drug Co’s get free/near free R&D via public universities & other Got entities.
    Incidentally, in the strictest sense there are no “Rights” at all. (a “right” is a power given or taken, which is then established or created by time & usage) However, should we wish to be a moral species ( which we seemingly don’t) I would say rights to food, shelter, & health are worth aiming for.

    • Replies: @Drapetomaniac
  7. AWM says:

    After 38 years in the Pharmaceutical “Industry” I wouldn’t trust these guys as far as I could throw a M1 Abrams MBT. This part of the Medical Industry has and always been pure greed. There is no “history” of them acting in a humanitarian manner, period. Even the “inventors” of their “miracles” have been raped and robbed at every possible angle. I have witnessed so much “collusion” or should we just call it what it is, conspiracy, between these criminal entities for decades it’s no wonder they are rich and have their hands in every politician’s election, nationwide.

    • Replies: @Patricus
    , @Drapetomaniac
  8. “Canadian companies are allowed to pirate American and international medical patents and products”

    The US Patent system is a joke. It’s a rentier system owned by big corporations with the US govt abetting.

    Just like the rest of the economy.

  9. Patricus says:


    Unlike you I didn’t work in the industry but did work for private companies who helped companies through the mazes of regulations.

    The long history of drugs was dominated by quacks and mountebanks. The attempt to rationalize medicines with regulations requiring scientific proofs of safety and effectiveness has had positive effects despite many inevitable flaws. These large companies spend over a billion dollars to get a product to market. Some of these drugs are wonderful. Without making money there would be no incentive to hire all these legions of genius developers. Personally I think federal regulations are a ball and chain. Alas there are manufacturers who will knowingly sell poison.

    The US is about the only place where drug developers can recover research costs, even the German and Swiss companies design for the US market. It is a large and pretty wealthy country. Once the drug is developed the cost to make the pills may be less than the cost of the label and pill containers. The world rides almost free on the American market and patent system. 45% of new drugs come from America.

    A salute to the Canadian who gave away his insulin patent. Unfortunately relying on these Mother Teresas would be the end of drug development. These scientists who go to school for 12 years after high school would like to be able to live somewhere, eat and drive a car, etc. Those with money to invest would like some profit to justify the risk of their capital. Government drug development would stagnate. By the way, I just read Walmart sells 10 ml ampules of insulin for \$25, and over the counter. That’s cheaper than Canadian insulin. Yeah, it might be Chinese antifreeze.

  10. AWM says:

    I always sent private pay patients to WalMart for their insulin, it was the only human thing to do. I even called their doctors to get the Rx changed, and then transferred it to the WalMart pharmacist, all with whom I had a very good relationship. Since at one time I worked for over 20 different locations of a popular chain pharmacy (and across 3 states), I knew where to check for rarely stocked drugs, and had RPhs from multiple chains and independents call me regularly looking for a supply of multiple drugs.

    My opinion of the industry would be way different, but they encouraged regulatory groups to eliminate certain drug and drug formulations from availability OTC, with no regard for the effect on patient’s health care. Sometimes these decisions were just stupid, but even more often they were seeking more profit. So often minor conditions we could treat in the early 80s required a trip to a doctor in the early 90s. For instance, ingrown toe nail (tannic acid, the original Outgrow), or very minor eye infections (yellow mercuric oxide opth oint) or minor skin infections (povidone iodine oint, gen Betadine, occasionally still found).

    Sort of like the Rx side of the industry, for instance raising the price of a drug from 3 cents to over 6 dollars per tablet, or a popular senator’s daughter jacking the price of a potentially life saving treatment by hundreds of per cent. Or an ancient drug like Chlorpromazine (Thorazine) which is effective for that very small slice of the population with chronic hiccups. Every single time the changes can be understood by a single thing, follow the money. How ’bout Lanoxin, incredible price increases, for a heart drug available since the dark ages.

    I’ll never forget having it explained to me by a lawyer that the companies couldn’t be charged under RICO because they all jacked their prices up the same amount at the same time, always, no obvious “collusion.” Hey, it wasn’t that bad of a deal for the community pharmacy because the value of your stockroom went up way faster than any “investment.”

    Sure the US is the place to make money on the drugs, we are the only place with high tech and pure corruption and almost unlimited pockets, Big Pharma contributes more money to the politicians than the MIC, Big Oil, Lawyers, Bankers, Communist Governments, but not as much as the taxpayer at the point of a gun.

  11. Eric is correct in stating that drug and natural products often contain adulterants or are contaminated. And the Margolis experience with Jamieson in Windsor ON gives him authority. However, the Canadian health regulator, Health Canada, knowingly allows this all to happen.

    Health Canada licenses all products. If they were to be tested fully and completely by independent laboratories it would be found these are corrupt. That consumers are at harm and are being defrauded. And who’s fault would that be? Health Canada. So, to avoid getting themselves all fired for negligent incompetence, the government bureaucrats Do Nothing. Just sweep the whole mess under the carpet.

    As in the U.S. the reason contamination persists is because the health regulators are up to their necks in the business.

    They are, after all, only working in the interests of their future employers.

  12. But then why isn’t food also a human right?

    Food is functionally a human right in America thanks to “Food Stamps” (Supplemental Nutrition Assistance Program). Most communities also have charitable food banks on top of that.

    Additionally, food is quite cheap relative to prescription drugs. People also don’t inherently object to paying for food, whereas everyone seems to get angry about needing to pay for medical care in all countries (note–not justifying outrageous pricing in the US healthcare sector) and see illnesses as an act of God beyond human control.

    For example, the important anti-diabetic drug, metformin, is now primarily sourced in India, no matter that it is labeled ‘made in USA.’ So we end up with USA prices but Indian quality control. India remains the world’s biggest adulterator of food products.

    I don’t approve of importing medicine or much of anything else from India, but the Indian pharmaceutical has better quality control than probably any other Indian economic sector. I’d trust Indian drugs over Chinese any day.

    Also, on December 17, 2018, by a vote of 121-8, the UN General Assembly formally extended human rights protections to farmers whose seed sovereignty is threatened by government and corporate IP practices, in The Declaration on the Rights of Peasants and other People Working in Rural Areas, The United States, United Kingdom, Australia, New Zealand, Hungary, Israel, and Sweden voted ‘No.’

    Good. Why would those of us in the advanced countries want to provide material benefits to Third World peasants at the expense of the profits of our MNCs?

    The UN should be abolished, or at the very least eliminate the fiction that all countries are equal (thank God for the P5), but at the very least the UNGA is a toothless joke.

  13. @animalogic

    “However, should we wish to be a moral species ( which we seemingly don’t) I would say rights to food, shelter, & health are worth aiming for.”

    Perhaps we should focus on not killing, stealing, or enslavimg by having very strong property rights – not that I really support the concept of rights. Using force to take from one and give to another is hardly moral.

    Besides, free food, shelter, and health would feed and breed the world’s populatiom into Idiocracy in a few short generations.

  14. @AWM

    So ‘humans’ and ‘human’ societies have evolved in response to government actions over the last twelve thousand years or so. And for millions of years before that, the alpha-male social hierarchy.

    The cause of much of the world’s woes is almost always the person staring back at you in the bathroom mirror because voting is the process of choosing the psychopath most like yourself to ruin, in some way, most everyone else’s life.

    • Agree: Kratoklastes
  15. The answer to this problem may be for the US to join the rest of the civilized world by imposing price controls on drugs. Doing so is distasteful and will hurt research and development. But there seems no better answer.

    Probably I am being stupid but this sounds like a non-sequitur to me. How does imposing price controls cause better quality control?

    The Permanent solution to this and the many other problems with the pharmaceutical industry is Nationalization or better still, Internationalization of the pharmaceutical industry.

    Privately-owned pharma, like privately owned health-care, depends on a constant supply of sick people or a supply of chronically sick people. It has no interest in medicines or treatments that work if they are unprofitable, however well they work. It has no interest in medicines which cure, each cure, is a lost customer. The “ideal” medicine stabilises the disease without curing it. Big Pharma has no interest in very rare diseases as they are a tiny market. Likewise, it has no interest in diseases of people who are too poor to pay for the medicine.

    Having many competeing companies wastes a lot of research effort in many laboratories trying to find a cure to the same set of diseases instead of cooperating to do the same. Having one big International organisation working under, say, the WHO for example would no doubt have its problems, but they would be much smaller and more easily soluble problems than the present set up. They would be organizational problems, not intrinsic problems.

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