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  • Print publication year: 2007
  • Online publication date: July 2009

7 - Conclusion: How to Right the Trade Imbalance


On October 21, 2003, a group of senior citizens from the U.S. state of Minnesota traveled to Canada, where they planned to commit a crime – to purchase prescription drugs. In the United States, it is illegal to reimport drugs from abroad. But the price of prescription drugs in the United States has risen dramatically in recent years. So, instead of buying their medications at home, they bought their medicines at a licensed pharmacy in Winnipeg, Canada, where prescription drug prices are significantly lower. The next day, the seniors took the bus home. As the bus steered back onto U.S. territory, U.S. FDA agents boarded the bus and confronted the wily seniors. Although the agents didn't confiscate the medicines, they used their position of authority to dissuade the seniors from making future trips.

The United States does not regulate the price of drugs or subsidize drug costs for many Americans. Drug prices are high and rising. Thus, many Americans buy their drugs on the Internet or, like the crafty seniors, buy drugs abroad. They travel to countries where governments purchase drugs for their citizens or regulate the price of medicines. But U.S. pharmaceutical manufacturers argue that when governments, such as Canada, use their monopsony power to drive down the cost of drugs, these governments distort the market for drugs. These pharmaceutical manufacturers claim that the United States is the only country where they can charge market rates for the drugs they research, develop, and test.

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