The American pharmaceutical industry is currently Canadian pharmacy struggling with its Canadian counterparts. Reason? First, the latter managed to win a significant share of the market first. This trend continues thanks to lower prices, and Canadian pharmacies are adding new customers like never before. U.S. pharmaceutical companies have gone on the offensive, criticizing their Canadian counterparts for unfair trading practices.
The origins of this conflict can be traced back to the early 1990s, when the U.S. industry lobbied for tax exemptions for cross-border trade with Canada and Mexico. The result was the North American Free Trade Agreement or NAFTA. Thanks to NAFTA, trade between the three North American countries (the United States, Canada and Mexico) began to develop. NAFTA allowed the free flow of goods across borders without the introduction of conventional cross-border tariffs.
American industry has benefited enormously because it can now subcontract production in these countries and resell finished products to them. Thus, production costs fell and profits began to flow. American pharmacies, whose main competitor at the time was Europe, also benefited, as most of their research centers were located in Canada and the work was performed at much lower prices.
The joy of American pharmaceutical companies was short-lived, as many Canadian companies began to sell medicines to American consumers at discounted prices. This was done when Canadian companies realized that cheaper R’D and production costs could be used to deliver cheaper drugs to consumers. In addition, drug prices in Canada are strictly regulated by the state. On average, a U.S. buyer can save between $50 and $200 a month by buying drugs across the border. In the spirit of competitive capitalism, Canadian companies have begun selling medicines directly to U.S. consumers in border states and other ways, such as the Internet and telephone, to customers in other regions.
In the United States, it is illegal to import prescription drugs from Canada. However, the importation of medicines for a maximum of 3 months for personal use is allowed.
Interestingly, most of the branded drugs sold in Canada and the United States are manufactured in the same factories. Canada imports a lot of raw materials and finished products from the United States. So it’s possible that most Americans will reimport American drugs.
With the growth of profits, Canadian pharmaceutical companies began to turn to other marketing methods, including online sales and mail delivery. The U.S. model of differentiated pricing at the retail level and for large customers, such as insurance companies, means that the actual price of the drug sold may be unknown. Thus, the main segment of customers who applied to Canadian pharmacies is either uninsured persons or states whose negotiating power has been limited by various regulations. Thus, these buyers pay, at least indirectly, subsidies provided to the insured. That’s why they end up paying more for medicines in their country.
In the long run, however, increased purchases in Canada may actually lead to an increase in retail prices in northern Canada. One phenomenon that is already happening is that sooner or later Canadian medicines may also become expensive compared to their American counterparts. But for now, it seems, Canadian pharmacies are on the right track.
So what makes Canadian pharmacies so attractive to American buyers? The answer is quite simple and comes down to one word: prices. Pharmacies based in Canada say they offer prices that more than outweigh the ability to buy drugs from U.S. retailers. These pharmacies sell virtually all medicines sold by suppliers in the United States and can deliver them anywhere in America. The situation is that U.S. hospital funds encourage American citizens to purchase prescription drugs from Canada.
This is the main reason why Canadian pharmacies have managed to attract many American customers, and the list of customers continues to grow. Up to 3,000 prescriptions were allegedly prescribed per day. Drugs imported from Canada can cost 60 to 80 percent cheaper than medicines purchased in the United States. Canadian pharmacies also sell medicines to over-the-counter patients in these cases if the patient is in contact with a doctor online. Prescriptions will be issued online or over the phone, and medicines will be delivered to you at night by courier.
Some pharmacies also offer the option of buying low-cost medicines in Asia and Europe or in any other country with the lowest possible price and can send them to you at no additional cost. In any case, prices will always be much cheaper than American pharmacies. The entire U.S. pharmaceutical industry is at odds with its Canadian counterparts and wants to control this trade to survive with healthy profits.