If You Live....

[Guest guest]

Greetings: The article you are about to read was published in the

National Post. It is one of the major daily papers in Canada. Recently

if you live near the American border you may have seen an advertisement

on the cable channels showing two buses. One is going north and one is

coming south. The bus going north is American seniors crossing the

border to buy less expensive medications. The bus coming south is

supposed to contain Canadians crossing the border to seek the latest

treatments because the Canadian health system is poorly run. In reality

the ad is paid for by American Drug Companies as I understand it.

Monday, April 17, 2000

Indulging in 'different kind of drug trip'

Americans buy in Canada

Brad Evenson

National Post

Barbara Childress has been " on the bus " -- as she and the other seniors

at her Ithaca, N.Y., retirement home call it -- ever since her doctor

prescribed Celebrex for the arthritis burning in her elbows and neck

last November.

" The kids used to say 'on the bus' in the Sixties, " chuckles Mrs.

Childress, 71, a retired English poetry professor. " But that was a

different kind of drug trip. "

The pharmacy where Mrs. Childress used to shop in Ithaca charges $93 for

a month's supply of Celebrex. A new anti-inflammatory drug sometimes

called " super Aspirin, " Celebrex has rapidly become a best-seller.

But the small pharmacy in Iberville, Que., she visits charges much less

for the drug: $59. After she stocks up on blood pressure drugs and what

she calls " my old lady pills " --estrogen replacement therapy -- the

monthly savings come to $80.

This cross-border traffic is a thorny issue for pharmaceutical

companies, which face criticism for prices up to 70% higher than in

Canada.

Last week, the Maine Legislature passed a bill to take effect next year

that would establish a price board, similar to Canada's Patented

Medicines Prices Review Board. This board would mandate that all drugs

sold in the northern state should cost no more than in Canada.

The Vermont State Senate recently passed a similar bill, which describes

fair pricing for drugs.

" People in New England are sick and tired of paying a 60 to 80% premium

for drugs made in America, " says Shumlin, president pro tem of the

Vermont Senate. Hillary Clinton, running for New York senator, has

proposed state drug plans that buy directly from Canada. And last week,

a report commissioned by Bill Clinton, the U.S. president, found that

more than 33 million Medicare clients do not have drug coverage.

Most Canadians tend to complain about the price of medicines, but the

U.S. situation has led many to wonder, why are drugs so much cheaper

here.

While some American legislators have accused drug companies of dumping

products in Canada, the opposite is true; prices are higher in the U.S.

than anywhere else. " Much of this is simply that Canada is not as rich

a market as the U.S., " says Decter, chairman of the Canadian

Institute for Health Information. " We will not pay what Americans are

willing to pay. "

Demand for pharmaceuticals in the U.S. outstrips that of any other

country, comprising roughly 40% of the world market, compared with 26%

for continental Europe.

With only 10% of the U.S. population, Canada represents only 1.8% of the

pharmaceutical market, about half the per capita spending of American

consumers.

" Costs are also lower in Canada for many pharmaceutical companies, " says

Mr. Decter.

For example, high-profile U.S. magazines such as Cosmopolitan and Better

Homes & Gardens are filled with glossy, full-page ads for such

prescription drugs as Viagra,

Celebrex and Paxil. But direct-to-consumer advertising is illegal in

Canada, which cuts these promotional expenses dramatically.

Despite the U.S. impression, Canada is by no means the bargain basement

of the international drug store.

If Mrs. Childress lived in Australia, she could buy a month's supply of

Celebrex for a mere $38.40, a savings of $240 a year for arthritis

sufferers.

Prices are also lower in several European Union countries, as well as

Mexico, which is rapidly becoming a destination for U.S. shoppers.

Drug prices in Canada are also influenced by two other key factors. The

most potent is the power wielded by provincial drug plans.

For example, 1.2 million Ontario seniors get their drugs free as part of

the Ontario Drug Benefit Plan, which has 2.2 million members overall,

the largest single plan in North America.

Since it buys in bulk, it can demand much lower prices than smaller,

U.S. health-maintenance organizations (HMOs) can exact on behalf of a

few thousand members, let alone uninsured persons.

For example, an Illinois resident who goes to Windy City Drugs or

Rexall's on the outskirts of Chicago pays about $46 for a month's supply

of the popular sedative Ativan. The Illinois state drug plan pays about

$36 for the same bottle of pills.

However, an Ottawa resident who fills the same prescription at Shopper's

Drug Mart pays $15.44. The Ontario drug plan pays the manufacturer just

a fraction of

these prices -- $1.42 for 30 pills.

Provincial drug plans are a powerful market force. They cover most

Canadian seniors, who consume the vast majority of medical goods.

In B.C., for example, manufacturers of such products as the hypothyroid

pill Synthroid -- the most-dispensed drug in Canada -- must accept the

price paid for generic products if they wish to be covered by the

provincial plan.

By contrast, American HMO's are often less aggressive when negotiating

drug prices than Canadian drug plans, because new drugs can shorten

private-hospital stays, which are a much greater expense to an HMO than

a pricey drug. Since Canada's hospitals are public and care is free at

source, this cost-benefit equation is not the same.

Secondly, Canada relies on the Patented Medicines Prices Review Board to

regulate the price of prescription drugs that hold patents.

The federal board sets the maximum introductory price of new drugs --

basing it on the price paid in seven other industrialized countries --

and limits the annual increase in drug prices to the rate of inflation.

Although only a portion of drugs sold in Canada hold patents, this model

has caught the attention of legislators in the New England states.

The controversy has raised the ire of drug companies, which have

launched publicity campaigns that link Canada's low prices to its system

of public medicine.

" The story is not just about prices -- it is also about government

controls, " says an Internet site run by a U.S. group called Citizens for

Better Medicare.

The campaign points out that Canadians may pay less for drugs, but they

also wait longer for hospital care, and that access to new, breakthrough

drugs is slower than in the U.S.

The campaign is aimed at people like Mrs. Childress, but she's not

buying it. " Are they saying, if your [provincial] government paid more

for drugs, it would have more to spend on hospitals? " she asks.

" Or are they saying, Canada should adopt the U.S. system, the most

dysfunctional medical system in the industrialized world? "

THE COST OF DRUGS:

We compare the costs of some common prescription drugs when they were

bought over the Internet (through Drugstore.com, one of the cheaper U.S.

online

pharmacies) against a local Shoppers Drug Mart. These costs then were

compared to the price paid by The Ontario Drug Benefit Plan, most of

whose 2.2 million clients pay nothing for their drugs (all prices in

Canadian dollars):

DRUG Internet Shoppers Drug Mart

ODBP

Synthroid (1mg x 30 pills) $12.04 $15.00

$15.36

Premarin (1.25mg x 30) $31.05 $16.50

$ 6.49

Lipitor (20mg x 30) $114.88

$78.49 $60.00

Paxil (20mg x 30) $95.57

$65.64 $47.70

Vasotec (10mg x 30) $44.75 $42.67

$28.80

Norvasc(5mg x 30) $51.24

$54.73 $38.40

Celebrex (200mg x 30) $95.61 $59.25

n/a

Ativan (1mg x 30) $46.05

$15.44 $ 1.42

Zoloft (50mg x 30) $89.44

$65.97 $48.00

Zoroc (10mg x 30) $84.75

$72.00 $53.40

Coumadin (1mg x 30) $24.32 $22.73

$ 8.49

Triphasil (21 days) $35.97

$25.30 $11.50

Lanoxin (0.05mg/ML) $44.35

$23.46 n/a

Be Blest, D.

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" Life is a succession of lessons which must be lived to be understood. "

~ Helen Keller ~

" There are no mistakes, no coincidences.

All events are blessings given to us to learn from. "

~ Kubler-Ross ~

These are my three treasures

Compassion, frugality and humility.

Being compassionate one has courage,

Being frugal one has abundance.

Being humble one becomes the chief of all vessels.

~ Lao Tzu ~

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