By Patrick Klosek
With the 2020 presidential election on the horizon, few issues have garnered as much public attention as the country’s flawed healthcare system. Although there is significant disagreement regarding how to address the ongoing health crisis, Americans of diverse political backgrounds do agree on one thing—healthcare costs are too high. In an effort to address this concern, Democrats and Republicans alike have proposed ways to remedy the issue. In a recent statement, President Trump urged U.S. Health Secretary Alex Azar to open the gate for the importation of prescription medications into the United States from Canada. On the other side of the political aisle, Democrats, such as presidential candidate Bernie Sanders, have backed legislation that would see the importation of prescription medications that have received FDA approval. The ubiquitous nature of this issue suggests that it could see legislative action, possibly as early as next year.
Our healthcare system is quintessentially American in that it exists in a free market. Insurance providers compete with one another for the business of employers and private citizens alike. Intuitively, one would expect the competitive nature of the free market to drive healthcare costs down. However, data collected by the National Center for Health Statistics shows that per capita healthcare expenditures have been steadily increasing—from $7,690 in 2009 to $9,860 in 2016. Furthermore, the privatized, market-driven American healthcare system has left some 30.1 million Americans uninsured.[1]This amounts to a building crisis that is threatening the wallets and well-being of millions.
The Canadian healthcare system is a publicly funded entity that is made up of 13 provincial and territorial health insurance providers. Canada’s federal and provincial governments are responsible for regulating and operating the system that provides comprehensive healthcare to Canada’s 37 million citizens. Amongst its many responsibilities, the Canadian federal government sets minimum standards for provincial insurance plans, provides funding for these programs, and negotiates with pharmaceutical companies. One result of this framework is a significant decrease in prescription drug prices. Some medications are as much as 40-60% cheaper in Canada than they are in the United States.
In 2003, Congress passed the Medical Modernization Act which allowed U.S. states to import any Canadian drugs that were approved by Health and Human Services (HHS). Although this program sounds like the solution that many Americans have been searching for, few drugs have actually received the HHS secretary’s approval. As a result, several states—including Vermont, Maine, and Florida—have been working to establish their own programs through which to import prescription medications from Canada. These programs have been slow to develop and small in scope. Unsurprisingly, they have been met with significant pushback from the pharmaceutical industry. A Maine law (passed in 2014) that allowed residents to purchase drugs from foreign distributors such as CanaRx was overturned after suit was filed by various pharmaceutical manufacturers. Opponents suggest that these programs would increase the likelihood of counterfeit medication being sold to American consumers, of infringement upon American intellectual property rights, and of the consumption of federally non-compliant medications.
While the Canadian government has been able to keep the costs of prescription medications low through negotiations with pharmaceutical manufacturers, there is no telling how relaxed regulations on imports could affect their ability to maintain low prices. It is possible that with the United States’ emergence into the Canadian pharmaceutical market, the Canadian federal government could lose bargaining power in its price negotiations. Regardless, importing low-cost pharmaceuticals from Canada would address the issue of inflated domestic prices, but expensive medication is only a symptom of America’s failing healthcare system—not the cause. The free market model has given power to insurance companies; evidenced by their astronomical profits in the face of increasing consumer costs and the millions of Americans without insurance.
A more complete solution to America’s healthcare debacle would be to switch from a market-driven insurance system to a single payer system, mirroring Canada. A single payer healthcare system is one that removes all competition from the health insurance market, effectively operating as a public agency. This solitary insurance provider would be responsible for financing all healthcare costs, while still allowing people to choose their specific healthcare provider—whether choosing between hospitals, healthcare providers, or medications. From a public policy perspective, the switch to a single payer system could be revolutionary. The change would undoubtedly be complicated and imperfect. However, a singular, nationalized insurance provider has the potential to fill the 30 million person-wide gap in American healthcare coverage. Furthermore, by implementing a single payer system we would avoid all of the problems foreseen with drug importation. By negotiating with pharmaceutical manufacturers itself, the federal government could ensure that decreased drug prices do not lead to the production of noncompliant medications. Similarly, by avoiding importation, we would be avoiding concerns of the proliferation of counterfeit medications as well as intellectual property conflicts.
During such a divisive period of American history it is rare to find an issue that brings people together. We have found that issue in healthcare. In the short term, importing humanely priced pharmaceuticals from Canada could help those who cannot afford the treatment that they need. But while many Americans will have their eye on cheaper medication, they should be looking to Canada as an example of a more equitable system offering a long-term solution to the American healthcare crisis.
[1]National Center for Health Statistics, Gross Domestic Product, National Health Expenditures, Per Capita Amounts, Percent Distribution, and Average Annual Percent Change: United States, Selected Years 1960–2016, 2017 (https://www.cdc.gov/nchs/fastats/health-insurance.htm). This figure represents the number of uninsured Americans under the age of 65 at the time of interview.
Patrick Klosek is a 2L day student at Suffolk University Law School. Prior to attending law school, Patrick was a paralegal within the Consumer Protection Division of the Massachusetts Office of the Attorney General.
Sources
https://www.health.harvard.edu/blog/single-payer-healthcare-pluses-minuses-means-201606279835
https://www.worldometers.info/world-population/canada-population/
https://www.canada.ca/en/health-canada/services/canada-health-care-system.html
https://www.sanders.senate.gov/newsroom/press-releases/senate-backs-drug-importation
https://www.cdc.gov/nchs/fastats/health-insurance.htm
https://www.cdc.gov/nchs/hus/contents2017.htm?search=Health_expenditures
https://www.healthline.com/health-news/states-seek-to-import-medication-from-canada#1
https://www.thenation.com/article/why-are-canadas-prescription-drugs-so-much-cheaper-than-ours/
https://nashp.org/is-it-safe-and-cost-effective-to-import-drugs-from-canada/
https://www.nesri.org/programs/health-care-in-the-united-states
https://data.oecd.org/healthres/health-spending.htm#indicator-chart
https://www.nytimes.com/2019/07/28/us/politics/bernie-sanders-prescription-drug-prices.html
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHBL or Suffolk University Law School.