Mr. Speaker, recent data indicate that sales to the U.S. have decreased significantly from their 2004 peak. While there are initiatives underway in the U.S. that may potentially increase the volume of sales in the future, these are not yet in effect or finalized. Pre-emptive action is not required at this time, and it would be more prudent to assess the final version of any U.S. initiative before making a determination on a course of action.
Cross-border drug sales, CBDS, have been occurring for some time now, via both “foot traffic” and mail order. Health Canada has monitored CBDS levels and U.S. legislative activity in this regard since approximately 2002, assessing potential risks to Canada's drug supply. CBDS from Canada to the U.S. via mail order rose steadily from the beginning of 2000 until it peaked in 2004 at approximately $850M. Latest estimates of annual mail-order sales are about $173M, approximately 20% of the 2004 peak. Primary factors explaining the decline include: the implementation of U.S. Medicare Part D (seniors’ prescription drug benefit); supply restrictions to Canadian-based Internet pharmacies by the drug industry; and the surge (until recently) in the value of the Canadian dollar (relative to its 2003-2004 value).
Foot traffic, which existed prior to Internet commerce, remained steady at approximately $500M annually from 2004 to 2008. While the same factors as listed above would be expected to have reduced foot traffic, more recent data are not available.
Recent events in the U.S., such as the newly re-introduced bill seeking to legalize the bulk import of drugs, may have the potential to increase American demand for Canadian drugs if implemented successfully. The primary concern from some stakeholders has been with the potential impact on the Canadian drug supply and prices. This has led to renewed calls for possible Government of Canada interventions that could be used to address future drug supply issues in Canada. However, export prohibitions at this time are not consistent with Canada’s international trade obligations unless they fit within recognized exceptions, namely to protect human health or to prevent/relieve critical shortages.
This Government is committed to the health and safety of Canadians and would explore all available options in the event that Canadian supplies were jeopardized. Even if the U.S. legalizes bulk imports, actual implementation would take longer than a year, allowing time to prepare for any concern with the potential impact of bulk imports.
Health Canada officials, in co-operation with their colleagues at the Canadian Embassy in Washington, continue to monitor the export of drugs to the U.S., as well as the progress of U.S. legislation. Current CBDS levels, which are actually declining, do not warrant government intervention. As the American initiatives pass through the U.S. legislative process and evolve, Government of Canada officials will continue to assess them and formulate appropriate policy responses based on those assessments.