Mr. Speaker, I am pleased to speak to this private member's bill. This is a very serious issue and the government takes the issue of security of supply of prescription drugs and the protection of the health of Canadians very seriously.
When, in late October, the member for St. Paul's introduced the bill, she mentioned concerns about the effect of the then recent and potentially future U.S. initiatives aimed at facilitating cross-border drug sales to the United States. These two initiatives were restricted to individual purchases rather than wholesale or bulk shipments.
As I will outline further, we have not seen any impact from these initiatives. In fact, total sales to the United States have declined.
The member referred specifically to a U.S. measure to allow Americans visiting Canada to return with up to a 90 day supply of prescription drugs for their own use. In other words, this provision affected personal physical imports only, so-called foot traffic.
Although the measure became law on October 4, 2006, it essentially endorsed the then current U.S. administration practice regarding personal imports.
Members should know that the value of foot traffic purchases of prescription drugs in Canada has remained constant in recent years.
There was another U.S. development last fall, also in October, but not specifically referred to by the member at that time.
The U.S. Customs and Border Protection Agency ended its approximately one year practice of selectively seizing individual prescription drug purchases sent by mail from Internet pharmacies in Canada. While such personal mail order imports continue to contravene U.S. law, they have been tolerated, enabling the Internet pharmacy business in the first place.
As with the measures for foot traffic, we have not noticed any increase in sales associated with this U.S. Customs decision. In fact, the latest information from Health Canada shows that Internet pharmacy sales to the U.S. dropped by an additional 20% in the last quarter of 2006, resulting in total 2006 annual sales of $211 million.
The overall sales have dropped by 75% from their peak of $850 million in 2004. Why the decline? Several factors are at play. These include: the introduction of the U.S. medicare act part D, which, for the first time, provides drug benefit coverage for millions of previously uninsured or underinsured seniors; actions by manufacturers to restrict the supply of drugs sold to Canadian pharmacies involved in cross-border drug sales; the higher Canadian dollar; and, U.S. residents pursuing imports from other countries have also contributed.
When Bill C-378 was introduced last October, the government's assessment of the situation was that the U.S. initiatives with respect to foot traffic and mail order seizures did not pose a threat to the Canadian drug supply. This assessment has been proven valid. In the case of foot traffic, that is because sales predate Internet commerce and have existed for about 20 years. They have never posed a concern with respect to Canada's drug supply and the volume of such sales has been stable in recent years at an estimated $500 million.
The halting by U.S. customs of selective seizures of drug imports did not really change anything either as such personal imports have already been tolerated for a number of years anyway.
The most recent statistics bear this out. Foot traffic remains stable and Internet pharmacy sales dropped by 50% in 2006 and likely have dropped significantly more due to the sharp appreciation of the Canadian dollar since the more recent statistics.
Over the past several years, officials with Health Canada and the Department of Foreign Affairs and International Trade have continuously monitored the value of cross-border drug sales to the United States and related developments in that country, including the U.S. measures in October. Let me assure the House that they will continue to do so.
In the meantime, the Americans face ongoing challenges posed by the world's highest priced prescription drugs, explaining their continued preoccupation with finding way to make drugs more affordable. That is why the idea of importing lower priced drugs from Canada and other countries continues to be a political issue in the United States.
Federal legislators and state and municipal governments continue to see imports as part of the solution. Individual Americans, especially those without drug coverage, are also looking to other countries for relief from high drug prices.
At the federal level, in previous sittings of the U.S. Congress, a number of bills have been proposed to legalize drug imports, including bulk imports, from Canada. These legislative proposals were not able to gain a lot of support or traction, primarily due to the Republican majority in Congress and opposition by the U.S. administration. This was the case despite the fact that some bills were sponsored by Republicans.
However, I should point out that while some individual Republicans have supported and even sponsored drug import legislation, the official Republican Party position remains steadfast in opposing drug imports and in accepting high U.S. prices.
As the members in this place know, the U.S. legislative environment has been affected somewhat by the Democratic win in both houses of Congress last November. In this context, it is important to note that legalizing drug importations from Canada and other countries has reportedly been among the legislative priorities for some leading Democrats.
As I just noted, some Republicans have supported drug importation. In January of this year, a bipartisan group of U.S. Congress and Senate lawmakers introduced a bill that would allow importation from other countries. The pharmaceutical market access and drug safety act of 2007 would legalize both bulk or wholesale, as well as individual retail imports, including transactions via Internet pharmacies.
A democratically controlled Congress does suggest a greater potential for U.S. legalization of bulk imports. However, the overall view of Congress is that the prospects of enactment of legislation giving a clear green light to drug imports is dim at best.
To illustrate the point, let us look at developments in the last few months. In the U.S., opposition to the legalization of drug imports remains strong in many quarters. The enactment of legislation to legalize drug imports, without provisions for major impediments to such imports, is unlikely. This is especially the case given the Bush administration's opposition to drug importation.
There is potential for legislative horse-trading after such a controversial bill is introduced in the U.S. Congress. The U.S. Senators “endorsed” drug importation in early May, but included a provision--and this is very important--to disallow such imports unless the Secretary of Health and Human Services first certifies that they “pose no additional risk to the public's health and safety”, and that they will significantly reduce costs to consumers.
Proponents of importation have labelled this amendment as a poison pill, and with good reason. All observers agree, including the bill's lead sponsor, Senator Dorgan, that it has effectively neutralized the bill's drug importation provisions. This is because the actualization of those provisions would now require U.S. administration support but the president, by virtue of his past opposition to drug importation, is not expected to offer that support.
Even if the provisions were to be put into force, the administrative burden included in the bill, which is 140 pages long, is so onerous that its implementation would be significantly slowed. Its extensive administration and oversight regime includes requirements for inspections of exporting facilities and multiple procedural requirements of both exporters and importers. This suggests that there would be very slow uptake in the provisions.
I could go on but the bottom line--