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Medicare drug plan locks in high prices (3)

Creating cheaper costs: can Canada?

As the prices of drugs soared and demand increased, more and more people began looking elsewhere for their medicines. The same companies that sell prescription drugs in the U.S. also sell them in other countries around the world, including Canada. The U.S. is the only industrialized country with no regulations limiting drug prices, so the same pills are much more expensive here. As a result, by the summer of 2004, at least 1 million people living in the U.S. were filling their prescriptions in neighboring Canada, at a considerable savings.
Even though Washington was threatening to make it illegal, and even though the U.S. drug companies were threatening to cut off their Canadian distributors, senior groups started chartering buses to go buy their medicines in Canada. Even with the cost of the trip factored in, it was still considerably cheaper. Soon cities, towns and even states were trying to make arrangements for their residents to buy cheaper medicines from Canada. The city of Springfield, Mass., for example, arranged for its 3,000 public employees to get cheaper drugs from Canada. “We can save anywhere from $4 million to $9 million on an annual basis if I get everybody enrolled and everybody goes to Canada,” Springfield Mayor Michael Albano told Morley Safer (“60 Minutes,” Aug. 22, 2004).
But when the state of Vermont in the summer of 2004 tried to import prescription drugs for its residents, the Food and Drug Administration barred the way.
         
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