Drug prices are often cheaper in Canada, sometimes quite a bit cheaper. That is partly because Canadians are poorer, which is one reason why they also pay less for automobiles and computer software. But Canada also controls the prices of pharmaceuticals. That inspired Congress to pass a law in 2000 permitting drugs from American manufacturers to be reimported back to the U.S. from Canada at Canadian prices. That law never went into effect because the Department of Health and Human Services could not certify that mass reimportation would reduce costs without compromising safety. The FDA, which is part of HHS, said it would not be able to assure that reimported drugs would meet U.S. safety and labeling standards--or any other nation's standards, for that matter.

Earlier this year, the U.S. Senate passed another drug reimportation bill with even less safety protection, but the House of Representatives declined to go along. Reimportation is still an issue and a new bill will probably be introduced in 2003. In the meantime, AARP, along with some managed-care organizations and large pharmacies, have said they will tolerate or even encourage consumers to purchase drugs from Canada.

Consumers should understand how reimportation would work if it were actually put in place, because it would be a classic example of unintended consequences. In the short run, reimporation would do almost the opposite of what its supporters expect. In the long run, reimportation could curtail the very research success that has made our pharmaceuticals the envy of the world.

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