The Canadian pharmacy industry emerged as a threat to the US pharmaceutical sector as it captured a significant share of the American market. But, it was not always like this. In fact, the picture was quite the opposite in the early 1990s, when cross-border trade between the US and its North American neighbours (Canada and Mexico) was made duty free by the North American Free Trade Agreement (NAFTA).
NAFTA: The Roots of the Rise of Canadian Pharmacy
The US industry gained substantially from this agreement as it helped the Americans to reduce their expenditure and increase their revenues. Not only could they outsource the manufacturing part of production to Canada or Mexico, they even found a market for the finished products in these countries. Till then, Europe was America's leading competitor in the pharmaceutical industry. However, Canadian pharmacy industry gradually realised that the one of the main reasons for the US-based pharmacies doing great b usiness was the research and development provided by Canada.
Canadian pharmacy firms woke up to this fact and started capitalizing on the cheap R&D facility at home. Moreover, regulation of drug prices in Canada by the government further laid down the price margins. These companies began offering discounted prices to people from the US looking to buy drugs. This competitive capitalism got a new dimension with the sale of drugs online and via phone.
Canadian Pharmacy and the American Buyer
Here are some interesting facts that people in the US seeking to purchase drugs from Canadian pharmacies must know:A US-based buyer, on an average, can save up to $200 per month by buying drugs from a Canada-based pharmacy. The US laws prohibit the import of prescription drugs from Canada. However, it is legal to import drugs of personal use for up to three months. Most of the prescription drugs (distributed by a brand) are produced in the same manufacturing plants. Since a lot of raw materials as well as finished products are imported by Canada from the US, Americans are actually re-importing drugs made in America. The US model of differential pricing for bulk buyers like insurance firms and at the retail level keeps the actual selling price of the drugs unknown. Thus, those who are approaching Canadian pharmacies are either not uninsured or belong to states where regulations have curtailed negotiation power. As a result, indirectly, these buyers are paying for the subsidies given to the insured and end up paying a higher price for the drugs in their homeland.
While a rise in sale of drugs by Canadian pharmacies may push the retail prices of drugs in Canada towards a costlier end, these companies seem to be the right choice for now. So, before Canadian drugs become more expensive than those available in the US, make the most of this price gap.