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Importing And Marketing Canadian Patented Pharmaceuticals In The United States

1232 words - 5 pages

Introduction:This paper researches the various aspects of importing Canadian Pharmaceuticals to the United States. Much has been written on this subject in the last year due to high cost of drugs, and healthcare generally in the United States. There has been a number of congressional bills that would facilitate the importation of Canadian drugs into the United States.The driving force behind this subject is the difference in prices between certain drugs sold in Canada versus the United States. The price difference is based on the different types of price regulation in the two countries. American patented medicine costs are the highest in the world1. Canada requires, among other things, that prices for medications be" no higher than the median of the price for the same drug charged in seven other countries: Britain, France, Germany, Italy, Sweden, Switzerland and the United States1." This results in the difference in prices for these controlled medications to be, on average, 69% lower North of the border1.This price driving force creates a massive opportunity that will be explored in this paper.Market Size, growth potential and Current Import Levels:With the aging of the baby boomer generation, the advance of medications, and the general increase in disposable income for many, the demand for life-enhancing pharmaceuticals creates a vast market. Estimates are that the total market is in the $50 Billion dollar range2 and is growing with the average age of the population.Although importation on a grand scale is not possible, as will be discussed, small-scale importation is a vast market and growing rapidly. According to one website, "as many as 1 million Americans purchase between $500 million and $1 billion dollars worth of Canada-origin medicines."Native Competition:Of course, the vast difference between the total domestic market of $50+ billion and Canadian imports of $1 billion is American is native competition. The goal of the Federal Drug Administration is to create a "closed" distribution system. The purpose of the closed market is ostensibly to ensure the integrity of the medicines. In this way, the FDA can control where and how drugs are made, protect the distribution and finally, ensure the consumer gets the proper treatment.This control requirement by the FDA, and the American free market system, create a monopolistic price structure for some drugs. Because there is little price control in the United States, prices for patented medicines can be very high. A drug developer/manufacturer may try to exploit the market for the drug during the protected term, typically 14-20 years4.Trade Barriers:Per the Pfizer website, Lipitor, made by Pfizer, is the number one prescribed drug in world5.A quick, informal check for prices on websites found the following data. These were the first four websites found, advertising LipitorPrices of Lipitor, 90 10 mg Tablets6,7,8,9Origin Country Seller PriceUnited States Walgreens.com $225.09United States...

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