In fact, the U.S. government is currently considering a staggering 200 percent tariff on drugs that are exported from Canada! Such a bold move could take effect as early as August 1. Former President Donald Trump was a major proponent of this idea to lessen the nation’s dependence on foreign markets. It takes the growing security worries seriously and tackles them. In fact, Canada only produces around five percent of the pharmaceuticals that the United States brings in from other countries. This proposed tariff has the potential to be immensely damaging for both countries.
If it gets put into practice, Canadian drug manufacturers would experience higher production costs and risk creating domestic drug shortages. These proposed tariffs will only drive up checkup costs to Canadians. This revenue boost would be a direct hit on patients who rely on low-cost, generic drugs. Jim Keon, at the time the head of the Canadian Generic Pharmaceutical Association, predicted a coming fiscal crisis. He argues it would do incalculable damage to Canada’s single-tier healthcare.
Implications for Canadian Healthcare
The introduction of such tariffs is an especially perplexing move for a country that has prided itself on affordable, readily available medications. With healthcare dollars already stretched thin, any additional costs risk diverting precious public health resources.
“This is going to raise up health care costs in Canada. We know health care dollars are scarce in Canada, and we certainly don’t want B.C. PharmaCare to pay more for generic medication.” – Jim Keon
Without tariffs, Canadian companies will find it hard to make the case to keep production in the country. This is particularly the case if export potential to the U.S. suddenly disappears. Further, if companies start to see the U.S. market as less accessible, they will reduce investment in Canadian pharmaceutical manufacturing. This fear of harmful, reduced investment frightens the cabal.
Risks of Drug Shortages and Discontinued Products
As tariffs increase U.S. prices, this could create circumstances where some drugs will be difficult to find or even withdrawn from the market. Canadian pharmaceutical manufacturers have expressed concern over their capacity to continue producing key drugs in such an economically unfavorable environment.
Drug shortages are ringing alarm bells all over Canada and the U.S. The U.S. would need to quadruple its Canadian imports to fulfill even half of the U.S.’s medication needs. Without proper oversight and coordination, these changes will result in major repercussions for patients trying to access the treatments they need in either country.
Canada’s Role in U.S. Pharmaceutical Supply
Despite the looming tariffs, Keon asserts that Canada should not be viewed as a country that would withhold medications from the U.S. Moving forward, he promotes ensuring a reliable and secure supply chain between the two countries.
“Canadian companies are trusted colleagues; Canada isn’t going to threaten to withhold medications going into the U.S., and so if you are concerned about security supply, having Canada within the tent as part of the production supply of medicines to Americans makes a lot of sense.” – Jim Keon
The prevailing political climate creates confusion about the future of cross-border pharmaceutical trade. As these conversations proceed, stakeholders need to be mindful of the everchanging landscape of international trade and the imperative to provide affordable healthcare to all their citizens.
