August 3, 2019

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.

Copyright Eric S. Margolis 2019

This post is in: Canada, USA


  1. Zeeshan7 says:

    Very interesting article. So long as big pharma is based on profit, they cannot be trusted. Many lower-cost and better quality alternatives are blocked from entering the consumer market for the sake of profit over human beings.

  2. clara mcnee says:

    Eric to read that you once believed in de-regulation was very sad for me because I’ve always admired your intellect and writing. How could ‘anyone’ think that de-regulation is good for a society/civilization especially when one knows that governments/corporations are not really in the business of solely making lives better? Governments/Corporations are in the ‘money’ business and we, the taxpaying, hard working, voter are really just consumers. Look at the mess and the lives effected by de-regulation. However, you were ‘right on; when you were against the Iraq invasion and you enlightened all those who would listen which is to your credit.
    Right wingers and hard right wingers are unhealthy for country/state/province and especially the people. To see some right wingers ‘finally’ see the light (as they get older) is good but right now it is looking like it could be too late for them and for the rest of us who they effected with their ‘selfish, immoral, unethical’ views. The U.S. had two mass shootings yesterday. The chaos from the top is starting to spiral (trickle) downwards.

    • I’ve always wondered whom regulation benefits, and I’ve seen corporations being the ones who influence the government on certain regulatory laws that drive away fair competition.

  3. Way back, when I was in Grade 11 (about 55 years ago), I wrote an essay for one of my English classes. I don’t recall the title, but the thesis was that by curing diseases with medicine, we may be doing the human race a great disservice. I received good marks for it, but, the only comment was that the ‘topic was very interesting’. The same could be said about big pharma’s R&D programs.
    As long as Canadians have sufficient drugs, we should be happy to include Americans in our list of customers. It’s when we have shortages that problems will occur. I have a similar concern about selling Americans our water; what happens when it runs out for Canadians? I do not expect Americans to let us ‘turn off the tap’. They have shown their ability to honour an agreement is questionable at best.
    Bernie has the right idea, but, is too old for the job. He should side with one of upcoming ‘radical’ Democrats and act as a mentor. The American system is too one sided, and socialism, is given a ‘black’ mark. There are items that the government should be looking after. America should join the 21st century.
    The nations health, and education being at the forefront. I suspect the American politicians do not want an educated populace. Those dumb, uneducated ‘Billy Jim Bobs’ think that it is better to die than to accept socialised medicine. Due to socialised medicine and health care, Cuba has a lower infant mortality rate than the US.
    “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.” If American companies hold the patent for insulin, it looks like they were the ‘pirates’. Insulin was discovered and developed through Government of Canada funding and In 1923 they granted Banting a lifetime annuity to continue his work. In my opinion, there is a responsibility to the people rather than the board members. This is more particular if the medication is life changing.
    The governments could help solve the problem by restricting patents to 5 or 10 years depending on the importance of the drug to national interests. Watch big pharma howl. If this doesn’t allow the R&D to be undertaken due to lack of funds, look to the thesis of my Grade 11 essay.
    The reason drug prices in the US are among the highest in the world is because of profiteering by unscrupulous individuals. When the interest of the population is at stake, governments should step in and provide direction for these profiteers. Tax those that can afford it and cut out military spending to provide the funds is necessary.

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