Rafi Mohammed

Cheap Drugs from Canada Won’t Reduce U.S. Drug Prices

Posted on February 12th, 2016 (0 Comments)

A common proposed remedy for high U.S. pharmaceutical prices is to import cheap drugs from Canada. It’s a nice fantasy to believe the remedy to this major issue is as simple as trucking discount pills over the border.

For clarity, this is not a political piece as both Democrats and Republicans have advocated this remedy. Here’s why this strategy won’t work: Suppose you are the head of pricing for a major pharma company and observe low-priced drugs targeted to Canada are now being used in the U.S.. As a result, your company’s profits are declining.  What would you do? Of course, you’ll do everything in your power to curb this importation.

For more insight on this important issue, please check out my latest piece for the Harvard Business Review. For latest updates on key issues, follow me on Twitter @cultureofprofit.

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