U.S. Drug Importation: Impact on Canada’s Prescription Drug Supply

Abstract

Background and objectives: In 2010, I published an article addressing the impact U.S. drug importation will have on the Canadian prescription drug supply. In this article, I reported that only a small proportion of the U.S>prescription volume will have a severe impact on Canadian drug supplies. Currently many U.S. politicians have renewed their interest and are strongly advocating the legalization of prescription drug importation. The objective of this research is to re-examine the issue and estimate the impact U.S. drug importation from Canada will have on the Canadian prescription drug supply. Methods: Like the 2010 article, the forecasting model created uses baseline numbers for the number of Canadian and U.S. prescriptions dispensed in 2015. Two models were employed: one for all prescriptions and one for only brand name prescriptions dispensed. The number of days to exhaust the Canadian prescription drug supply was estimated by varying the proportion of U.S. prescriptions demanded from Canada. Results: The model found that if 20% of the U.S. prescriptions were filled using Canadian prescription drug sources, the 2015 Canadian drug supply would be exhausted in 183 days and this is calculated using an additional supply of 20%. It was believed that U.S. demand for Canadian brand name drugs will be much higher than for generic drugs since generic drugs are substantially cheaper in the U.S. than Canada. Thus, a Canadian brand name drug model was constructed. The results showed that a 20% demand from the U.S. would deplete the Canadian 2015 brand name drug supply in 201 days. Conclusion: The results show the risks are high for the Canadian health system if the U.S. were to legalize drug importation. Canada will need to either have a major increase in drug imports or dramatically increase their domestic drug manufacturing. The paper discusses four possible options for Canada to avert a prescription drug shortage.