Why are prescription drugs cheaper in Canada?

[43st]

The pharmaceutical industry is the most profitable industry in the US. Nearly 20% of the money they make is profit... this is after R&D is paid for.

Thankfully the health care system in the US is the best in the world and because of that we all can be rich from our rising insurance costs.

 

[rahvin]

Originally posted by: Thera
The pharmaceutical industry is the most profitable industry in the US. Nearly 20% of the money they make is profit... this is after R&D is paid for.

Thankfully the health care system in the US is the best in the world and because of that we all can be rich from our rising insurance costs.

No software is the most profitable industry in the US. Microsoft's margins are in excess of 60%. Silicon companies would follow that as Intel's margins exceed 50%. 20% is actually considerably low and in line with nearly every other non-commodity business.

 

[43st]

I listed by industry... not by individual company. LOL. Big difference, you're right.

EDIT: Software is not the most profitable industry, at least not in the US.

 

[BaliBabyDoc]

And Prozacs patent has expired about 5 years ago. I wonder the differential between drugs still under protection Like Zocor.

Prozac (fluoxetine) has patent protection as Sarafem (for premenstrual dysphoric disorder) and a new formulation Prozac Weekly.

To correct some misperceptions, Pfizer over the past few years has acquired:
Warner-Lambert
Parke-Davis
Pharmacia
Goedecke

Every acquisition actually REDUCES the total amount of resources committed to R&D. Without partnering with Big Pharma it is possible that some promising drug candidates from biotechs would not come to fruition. By the same token, mergers and acquisitions have DEFINITELY ended R&D into promising compounds. In essence, companies rarely finance competition with themselves.

Despite industry claims the vast majority of new chemical entities were not publicly funded, the substances, technology, and expertise invariably evolved from government investment. Legislation (like the Dole-Bayh Act) was designed to facility the development and transfer of technology to industry. I have three current projects for the off-label use of FDA-approved drugs and (six projects in development). My salary is funded by the NIH, although I do beg drug companies for free drug . . . b/c otherwise the studies would be impossible to finance. The research facilities I utilize for clinical trials and by bench research (molecular pharmacology) are constructed, staffed, and maintained on the government tab.

Here's an example of the farce. FDA-approved therapies for schizophrenia are typically approved based on clinical trials of several weeks up to a maximum of a couple of months. Clinical researchers (working at academic institutions) are the ones performing research to determine if these therapies are effective and safe long term. Thankfully, many drug companies donate drugs (and cash) to fund these studies but the major cashola comes from Uncle Sam.

It is true that a large portion of the expense in administration, marketing and advertisement comes from drug samples provided to clinicians that are subsequently given to patients. But drug companies deduct the RETAIL cost of these drugs which is reasonable to some extent but is questionable on other accounts. In my experience, clinicians do not discriminate in who gets samples. Drug companies are not providing samples out of the goodness of their hearts . . . they want doctors to give samples PLUS a prescription. Drug companies will argue they are providing vital medication to people who might not be able to afford it. That's true but clearly that's not their primary motivation. Well before a drug goes off patent, the supply of samples comes to a halt (I'm sure that's in a patient's best interests). Of course, a given companies followup product (say the move from Paxil to Paxil continuous release) quickly finds its way into the drug closet. So despite a patient's clear response to a therapy, clinicians (and patients) are coerced into changing to a different formulation. If you buy the drug companies argument about the expense of providing samples . . . maybe they should just stock the drug closet with the off patent version??

Admittedly, I've eaten more than a few drug lunches . . . and dinners. But truth be told some drug reps actually provide useful information . . . sometimes it's just a free meal. Annual conventions are particularly gratuitous. The last convention I attended looked like a circus in the industry pavillion. Of course, it's written off as just another expense . . . being recouped through high drug costs.

Under our current model, the profit motive does drive some advances. But it is not the primary reason our medications have improved over time. A case in point, a Canadian researcher was sued by a drug company b/c her research indicated their therapy was effective but extremely dangerous. Despite a clause in her contract that forbid her to release information without their consent, her morals compelled her to publish the findings. Of course, the rule of law prevailed . . . the drug company won their lawsuit. The drug was removed from the market.

 

[Lucky]

Originally posted by: rjain

Originally posted by: Lucky

Your comments that most large drug companies dont pay for R&D is pure rubbish.

Your twisting of my words to mean the exact opposite of what I said is pure rubbish.

Uh-huh. Tell us what you really meant then.

 

[outriding]

Originally posted by: charrison

Originally posted by: sandorski
What I have gleaned from the news.

Canada imposed Drug Price controls in the early 90's. Part of these controls states that Drug prices could only rise at the rate of Inflation, though the Drug companies didn't always raise their prices at the rate of Inflation so their drugs would get preferential treatment from the Provincial(the Provinces have Jurisdiction over Health Care) Ministries of Health. I don't know how the Price is determined for Drugs under the regulations, but it certainly would not be set so the Drug companies lose money. Some US companies have recently announced that they will raise their prices to the full extent that the regulations allow(including previous rates of Inflation they passed on) in response to the Internet Pharmacy issue.

Why the discrepancy(sp) between US and others prices? Part of it is Pricing Controls outside of the US, but why would these companies sell their drugs outside of the US if they were losing money? Probably because they are not. The US is certainly using a more Free Market approach to Drug Prices than Canada or Europe, that is certain. As such, US Prices are being set according to the Markets willingness to bear, meaning if (X)x is what the Market will bear, then that is what the Price will be. It also seems quite obvious though that a significant part of the Market will not bear the set Price, thus the Boom of Americans buying their drugs from Canada or Mexico. In a way this issue is very similar to the CD Sales issue, both these Products can be Sold cheaper, but they are not. It also shows that there are weaknesses to the Free Markets' Competition Lowering Price arguement, since we see here(many other instances in other sectors as well) that it has done the opposite.

Do the High Prices in the US fund R&D and do Americans pay for the Price to the benefit of Others? This claim has been made repeatedly by some, but due to the lack of Financial Reports which breakdown R&D, Advertising, Return of Investment(Income), and other factors related to specific Drugs this is impossible to prove or disprove. What is known however, is that many new drugs are only "New" in the legal sense, having enough of a changed chemical composition as to be Patented as "New", but having little to No greater efficacy as the "Old" drug. Certainly the R&D into such drugs is not nearly as expensive as totally New drugs. Take into account also that Investors have been increasingly adamant on seeing Return in the last Decade or so and again one has to wonder how important or expensive is R&D in the greater scheme of things.

Why then are Drug companies increasingly migrating to the US?(similar question seen in another thread) Simple, the US is where the Big Bucks are. Not only do you have the ability to Sell at a much higher Price, but you also have the largest(soon to be replaced by the EU and China) unified Market in the World. So even if the Drug Price in Europe or Canada is set to allow a modest Profit, why settle for Modest when you could have Mindboggling? Instead of taking years to recover the cost of R&D, do it in Months instead(not verifiable).

I think the US Consumer is just being ripped a new one because they are willingly allowing it, but I'd like to see some numbers.

Yes we are being ripped off because we are subsidising drug prices around the world. If canada is allowed to export drugs to the US, you are going to see drug prices in canada go up. Canada's goverment is trying to stop the export as it causing shortages of drugs. Drugs companies are making a profit selling drugs in Canada, but they are not paying for the RnD.

I just heard this on NPR yesterday.

It is not the canada's goverment stopping the export perse. It is the drug companies who are limiting the amount of drugs into canada. If there are just enough drugs to go around for the people in canada then there are none for the anybody else. the canadians are just looking out for their people first.

Right now there are some organizations that are making sure that the drug companies are following the trade agreements between the US and Canada. If the drug companies are violating the agreements then they have to sell as much drugs to canada as they can and canada can do what they want with them.

But the FDA is not allowing / endorsing drugs from other countries even though they are approved here in the US.

 

[rahvin]

Originally posted by: sandorski

Originally posted by: Mrburns2007
What kills me is that the FDA yaks on about drug safety as if Canada is a third world country.

Speaking of which, yesterday or the day before a US official and Canadian official gave a joint news conference concerning this issue. The US official brought up the safety issue making some allegations about it. Well, the news conference went downhill from there with the US and Canadian officials getting into a shouting match. An official release from the Canadian government stated that some allegations of Safety had been raised, but that investigations had turned up that the allegations were baseless. It seems that if the US wants to make such allegations, then they should take Public action(Court/legal) to demonstrate whether these allegations have merit or not. Simply making allegations is not Proof of anything.

Court? Try history, the drug is called Thalidomide, it was approved in Canda and most of Europe but hadn't made it through approval in the US. Google it if you don't know what it is.

 

[AEB]

here is how it works in canada. Everyone pays taxes as in the US. Only the canadian government takes those taxes and buys the prescription drugs, and sells them a a cheaper price to their citizens, many of whom are in the lowest tax bracket. This wont work in america because the middle class would be paying for everyones health care

 

[sandorski]

Originally posted by: rahvin

Originally posted by: sandorski

Originally posted by: Mrburns2007
What kills me is that the FDA yaks on about drug safety as if Canada is a third world country.

Speaking of which, yesterday or the day before a US official and Canadian official gave a joint news conference concerning this issue. The US official brought up the safety issue making some allegations about it. Well, the news conference went downhill from there with the US and Canadian officials getting into a shouting match. An official release from the Canadian government stated that some allegations of Safety had been raised, but that investigations had turned up that the allegations were baseless. It seems that if the US wants to make such allegations, then they should take Public action(Court/legal) to demonstrate whether these allegations have merit or not. Simply making allegations is not Proof of anything.

Court? Try history, the drug is called Thalidomide, it was approved in Canda and most of Europe but hadn't made it through approval in the US. Google it if you don't know what it is.

The early 60's called, they want their mistake back.

Similar situations have occured with drugs in the US.

 

[rahvin]

Originally posted by: sandorski

The early 60's called, they want their mistake back.

Similar situations have occured with drugs in the US.

Name a mistake in the US? Give me this big list of drugs that were approved in the US for use and weren't in other countries and found to cause major health problems?

The fact is the US FDA has the strongest track record of any drug approval administration in the world. The issue isn't that the FDA is trying to protect drug companies its that the FDA has very legitimate concerns that if re-importing is allowed the FDA's ability to control the quality of drugs will be compromised and people will die. You and people like you choose to ignore their valid concerns and focus only on the negatives that result from their concerns. "But think of the old people" you scream while the FDA considers that if they do allow re-importation that their ability to inspect and verify the quality of drugs will be gone as companies lower the quality of their drugs and re-import them directly to the consumer rather than submit for quality verification by the FDA at import/manufacture.

Until the FDA's concerns are addressed I do not support the re-importing of drugs as the quality of manufacture cannot be verified. Sure on the major brand name drugs there is very little risk, but there can be a LOT of risk if this practice is mainstreamed and major pharmacies start re-importing to save money.

Those that forget history are doomed to repeat it. If re-importation had been allowed in the US during the Thalidomide problems of the 60's there would have likely been cases of the associated birth defects in the US as the consumers would have re-imported the drug even though it was not approved in the US. The FDA's caution should not be dismissed.

 

[SuperTool]

Originally posted by: rahvin

Originally posted by: sandorski

The early 60's called, they want their mistake back.

Similar situations have occured with drugs in the US.

Name a mistake in the US? Give me this big list of drugs that were approved in the US for use and weren't in other countries and found to cause major health problems?

The fact is the US FDA has the strongest track record of any drug approval administration in the world. The issue isn't that the FDA is trying to protect drug companies its that the FDA has very legitimate concerns that if re-importing is allowed the FDA's ability to control the quality of drugs will be compromised and people will die. You and people like you choose to ignore their valid concerns and focus only on the negatives that result from their concerns. "But think of the old people" you scream while the FDA considers that if they do allow re-importation that their ability to inspect and verify the quality of drugs will be gone as companies lower the quality of their drugs and re-import them directly to the consumer rather than submit for quality verification by the FDA at import/manufacture.

Until the FDA's concerns are addressed I do not support the re-importing of drugs as the quality of manufacture cannot be verified. Sure on the major brand name drugs there is very little risk, but there can be a LOT of risk if this practice is mainstreamed and major pharmacies start re-importing to save money.

Those that forget history are doomed to repeat it. If re-importation had been allowed in the US during the Thalidomide problems of the 60's there would have likely been cases of the associated birth defects in the US as the consumers would have re-imported the drug even though it was not approved in the US. The FDA's caution should not be dismissed.

So to seniors who can't afford medicine in the US, you answer is it's better they go without medicine than get it from Canada?

 

[Lucky]

Originally posted by: rahvin

Originally posted by: sandorski

Originally posted by: Mrburns2007
What kills me is that the FDA yaks on about drug safety as if Canada is a third world country.

Speaking of which, yesterday or the day before a US official and Canadian official gave a joint news conference concerning this issue. The US official brought up the safety issue making some allegations about it. Well, the news conference went downhill from there with the US and Canadian officials getting into a shouting match. An official release from the Canadian government stated that some allegations of Safety had been raised, but that investigations had turned up that the allegations were baseless. It seems that if the US wants to make such allegations, then they should take Public action(Court/legal) to demonstrate whether these allegations have merit or not. Simply making allegations is not Proof of anything.

Court? Try history, the drug is called Thalidomide, it was approved in Canda and most of Europe but hadn't made it through approval in the US. Google it if you don't know what it is.

You mean the Thalidomide that was approved for sale in the U.S. 5 years ago? No, I understand what you mean.

However, your response to his post seems to center around drugs not approved for sale in the US. However, from what I've read these are not the main concerns that US officials have floated in the media. The concerns our government is alleging deal with safety of approved drugs when it comes to purity, distribution, and shipping. And it's not like the US has a golden track record in the area, there was a HUGE recall of some fake (cholesterol?) drugs that made their way into our tightly controlled distribution system this year.

 

[rjain]

To clarify what I think is being said: This kind of importation bypasses the FDA. Prescription and drug approval will become irrelevant.

 

[sandorski]

Originally posted by: rahvin

Originally posted by: sandorski

The early 60's called, they want their mistake back.

Similar situations have occured with drugs in the US.

Name a mistake in the US? Give me this big list of drugs that were approved in the US for use and weren't in other countries and found to cause major health problems?

The fact is the US FDA has the strongest track record of any drug approval administration in the world. The issue isn't that the FDA is trying to protect drug companies its that the FDA has very legitimate concerns that if re-importing is allowed the FDA's ability to control the quality of drugs will be compromised and people will die. You and people like you choose to ignore their valid concerns and focus only on the negatives that result from their concerns. "But think of the old people" you scream while the FDA considers that if they do allow re-importation that their ability to inspect and verify the quality of drugs will be gone as companies lower the quality of their drugs and re-import them directly to the consumer rather than submit for quality verification by the FDA at import/manufacture.

Until the FDA's concerns are addressed I do not support the re-importing of drugs as the quality of manufacture cannot be verified. Sure on the major brand name drugs there is very little risk, but there can be a LOT of risk if this practice is mainstreamed and major pharmacies start re-importing to save money.

Those that forget history are doomed to repeat it. If re-importation had been allowed in the US during the Thalidomide problems of the 60's there would have likely been cases of the associated birth defects in the US as the consumers would have re-imported the drug even though it was not approved in the US. The FDA's caution should not be dismissed.

Blah blah. Most of the Drugs being bought on the Internet from Canada were manufactured and are approved of in the US. All the Prescriptions being filled by Canadian Internet pharmacies are written by US Doctors. So you found 1 drug that was approved outside the US that turned into a major fiasco 40+ years ago, good for you. If these allegations are made, then there must be proof of something, no? Then prove them(rhetorical question, the US government made the allegation, so they should prove it).

I seem to recall a drug Phen Phen approved by the FDA for use in combo with another drug(don't recall the name) for weight loss that was subsequently removed when serious side effects appeared with its' use. This happened approx 10 years back.

However, I will concede that FDA approved drugs should be the only drugs that are exported from foreign countries into the US. If non approved drugs are being exported then they should be stated and something should be done to stop their importation to the US. So far that allegation hasn't specifically been made, though it may be a concern, until the allegation and proof is provided though it is impossible to make that arguement confidently.

So far, the unproven allegations and accusations are attempting to simply stop the inflow of cheap drugs and as such amount to nothing more than a PR campaign designed to protect the exhorbitantly high prices in the US.

 

[BaliBabyDoc]

Court? Try history, the drug is called Thalidomide, it was approved in Canda and most of Europe but hadn't made it through approval in the US. Google it if you don't know what it is.

Actually the manufacturer (and US women) were BEGGING for thalidomide approval. My understanding is that a single woman's dogged determination prevented it from coming to market in the US. Thalidomide now has orphan drug approval for Kaposi sarcoma and possibly other indications but of course it has a black box warning.

Name a mistake in the US? Give me this big list of drugs that were approved in the US for use and weren't in other countries and found to cause major health problems?

Obviously the US is the world's biggest drug market so US drug companies typically seek approval here before worrying about other markets. In general these are effective therapies, unfortunately it was difficult to truly establish risk-benefit until we started the real big experiment; ie post drug approval . . . every person taking the drug becomes a test subject.

Baycol (cerivastatin): unfortunately the risk from fatal rhabdomyolysis is a touch higher than the high cholesterol

Lotronex ( alosetron ): irritable bowel sux . . . ischemic colitis sux A LOT more . . . essentially you go from having insecurity with your bowel habits to requiring the surgical removal of part of your intestines.

Rotashield: vaccine for rotavirus . . . turned a anti-diahrreal disease vaccine into another ischemic bowel threat . . . intussusception . . . essentially your intestines roll into themselves kinda like a partially inside-out sock.

One of the more intriguing executive orders of Reagan's early years was the removal of a Carter administration prohibition against US drug companies selling drugs overseas that failed to meet FDA-approval for US use. Highly profitable (b/c companies could recoup some of the development costs) while highly immoral (drugs fail FDA-approval b/c they sux).

 

[gogeeta13]

good thread. thanks for all the insight.

 

[dmcowen674]

Originally posted by: gogeeta13
good thread. thanks for all the insight.

What's that Song? You Ain't seen nothing yet.

Wait til the Medicare Entitlement kicks in, no one not on Medicare will be able to afford drugs in the U.S. The Canadian border will be hopping in a couple of years.

 

[preslove]

The problem with everyone talking about the cost of RnD resulting in the insanely high prices of US drugs is the simple fact that drug companies SPEND MORE MONEY ON MARKETING THAN R&D!!!!!!!!!!!!!!

 

[freegeeks]

people who are saying that in the US drugs are more expensive then Canada or Europe because the USA is doing all the r&d is talking out of his ass


until 1995 EU pharma companies were spending more on r&d then the USA companies. From 1998-1999 the USA have surpassed the EU companies. If we follow the logic of some people here that would mean until 1998 drugs should have been more expensive in Europe because the EU companies did the majority of the r&d. We all know that this is not true so this logic is just bs.

link

linky2

there are plenty of links about this. It's only in the recent years that the US pharma r&d budgets have surpassed the EU budgets. And even today it's more like a 60/40 situation when you compare US with EU budgets.
So the US is not providing the vast majority of r&d for the rest of the world like some US posters say


americans are just getting raped by their insurance companies who are big buddies with the pharmaceutical industry

 

[KenGr]

Originally posted by: freegeeks
people who are saying that in the US drugs are more expensive then Canada or Europe because the USA is doing all the r&d is talking out of his ass


until 1995 EU pharma companies were spending more on r&d then the USA companies. From 1998-1999 the USA have surpassed the EU companies. If we follow the logic of some people here that would mean until 1998 drugs should have been more expensive in Europe because the EU companies did the majority of the r&d. We all know that this is not true so this logic is just bs.

link

linky2

there are plenty of links about this. It's only in the recent years that the US pharma r&d budgets have surpassed the EU budgets. And even today it's more like a 60/40 situation when you compare US with EU budgets.
So the US is not providing the vast majority of r&d for the rest of the world like some US posters say


americans are just getting raped by their insurance companies who are big buddies with the pharmaceutical industry

This strikes me as a major misconception. It's not important that the drug companies are US or not. All large drug companies are multinational and depend on a world wide market. The European drug companies charge more in the US and recover their R&D disporportionately in the US just like US companies.

Drugs like any other commodity are priced through a very complex analysis of marginal cost, total cost, market size, price demand relationships in each market, etc. Proposed changes in drug importation laws will reduce the cost of some drugs in the US but will raise the prices in some other markets and make them unavailable in other markets. It is also possible that some drugs will disappear if adequate volume cannot be achieved at "world prices".

 

[freegeeks]

Originally posted by: KenGr

Originally posted by: freegeeks
people who are saying that in the US drugs are more expensive then Canada or Europe because the USA is doing all the r&d is talking out of his ass


until 1995 EU pharma companies were spending more on r&d then the USA companies. From 1998-1999 the USA have surpassed the EU companies. If we follow the logic of some people here that would mean until 1998 drugs should have been more expensive in Europe because the EU companies did the majority of the r&d. We all know that this is not true so this logic is just bs.

link

linky2

there are plenty of links about this. It's only in the recent years that the US pharma r&d budgets have surpassed the EU budgets. And even today it's more like a 60/40 situation when you compare US with EU budgets.
So the US is not providing the vast majority of r&d for the rest of the world like some US posters say


americans are just getting raped by their insurance companies who are big buddies with the pharmaceutical industry

This strikes me as a major misconception. It's not important that the drug companies are US or not. All large drug companies are multinational and depend on a world wide market. The European drug companies charge more in the US and recover their R&D disporportionately in the US just like US companies.

Drugs like any other commodity are priced through a very complex analysis of marginal cost, total cost, market size, price demand relationships in each market, etc. Proposed changes in drug importation laws will reduce the cost of some drugs in the US but will raise the prices in some other markets and make them unavailable in other markets. It is also possible that some drugs will disappear if adequate volume cannot be achieved at "world prices".

you are totally right. I just wanted to show that r&d costs have little to do with the difference in price for the consumer (unlike some people here who say that the vast majority of r&d is done in the USA). We come to the same conclusion that the US customer is raped because r&d cost has very little to do with the market prize. Pharma companies are asking much more in the USA because they can. Simple as that. And why can they do that. Because unlike countries with socialized healthcare where there is a govt. who is doing the negotations to get the best deal possible for its citizens, the private insurance companies are only interested in one thing, make a profit (and there is nothing wrong with that).

btw: even in countries with socialized healthcare the pharma companies are making a nice profit. They just have a bigger profit in the USA. There is no pharma company who is going to sell its product with a loss.

BTW: there is exactly the same thread in OT

maybe this one can be locked ????


linky

 

[rjain]

The US is PAYING for the R&D whether it's done in the US or not or by American companies or not. We SUBSIDIZE the research, even if we don't get that money back. The situation is even worse than if we had all the research here. At least then the money would come back economically close to the payer. Better than nothing.

Beware that simply stating a fact doesn't make it 100% of the truth. Your blinders are no justification for attacking the people who keep you healthy.

According to what you're saying, freegeeks, it's the people who don't use the drugs who are paying the balance for them in countries with socialized healthcare. Since the system isn't run for profit, you have to figure that it's running at a loss, no? Who is picking up the tab? Of course, it's the people who make good money, since 90% (yeah, they get some back, but it's at least 50%) of the differential in incomes goes to the people who can't do a job that their economy values.

I don't see why we need to lock a thread in a forum where the thread is on topic vs. a forum for threads that have no topical forum.

 

[Zebo]

Drugs like any other commodity are priced through a very complex analysis of marginal cost, total cost, market size, price demand relationships in each market, etc.

LOL kengr. No it's not any other commodity like I I have corn instead of beans tonight because beans are too high ...I think you're forgetting about patent rights and enforcement which grants monopoly powers for a specific amount of time (the are trying forever) which makes drugs quite different than "any other commodity". And since sometimes the specific drug essential to continue life it makes it even more of and extorsionous relationship which should have some price remedy or control. Canada and the EU weighs the intrests of the public/consumer vs. drugs companies and comes to a balance which I think is responsible behavior for a governemnt. We just let the company rape away, even protect them and enforce thier right to do so, while some go without. No suprise though the US governement is not to protect the many but rather the rich individual corps who lobby on the hill. Frankly I'm surprised we even have public utility commisions anymore. Why not let them charge what they want too?

 

[rjain]

You can still choose between Zantac or Prevacid just like you can choose between corn and beans.

 

[Ldir]

Originally posted by: sandorski
I seem to recall a drug Phen Phen approved by the FDA for use in combo with another drug(don't recall the name) for weight loss that was subsequently removed when serious side effects appeared with its' use. This happened approx 10 years back.

Two separate drugs. Fenfloramine + Phentermine = Fen Phen. Or maybe it was Phen Fen. Phentermine is still legal and on the market. (Spammers love it.) Fenfloramine was withdrawn.

The FDA approved another diet drug called Redux. If I remember right, it was withdrawn for having the same problem as the Fen Phen combination.

All spellings are best guesses.