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.