After Harry and Louise, meet Flo. Harry and Louise, you may remember, were fictional creations of the U.S. health insurance industry, a sympathetic couple who starred in some of the most devastatingly effective political ads ever. As Bill Clinton was promoting his ambitious 1994 healthcare plan, Harry and Louise were all over CNN, complaining that it was just a takeover bid by the kind of government bureaucracy Americans love to hate. It worked: the plan died, and for five years gun-shy politicians tiptoed around health care even as the number of Americans without insurance soared to a scandalous 44 million.
Now comes Flo, an equally fictional senior citizen who pushes the same buttons by complaining in a new ad about “big government in my medicine cabinet.” Flo’s puppet masters are from the U.S. drug industry, which smells the same kind of threat the insurance people stamped out five years ago. For the first time since then, leading politicians such as Bill Bradley are actually putting health care at the top of their agendas, daring to suggest that the richest country in the world at the height of its greatest prosperity might actually extend the benefits of its marvellous medical system to all its citizens.
The cutting edge of the debate is what to do about the high cost of prescription drugs in the United States—a drama in which Canada once again has a walk-on part.
That’s because prescription drugs are so much cheaper just across the border from the United States—across either border, in fact. U.S. media oudets are frill of reports about Americans, including seniors in organized bus tours, flocking to pharmacies just inside Canada and Mexico to load up on popular drugs at a fraction of the cost they pay at home. Prilosec, the best-selling prescription medicine for heartburn and ulcers, goes for $4.88 (Canadian) a pill in the United States, where it’s made, compared to just $2.17 in Canada— and $1.46 in Mexico. It’s the same for the 10 most popular drugs used by seniors: one survey shows they’re 81 per cent cheaper in Canada.
That’s because the United States is the only developed country that doesn’t control the price of prescription drugs. In Canada, the obscure Patented Medicine Prices Review Board generally keeps consumer costs from rising above the
median of seven other industrial countries, saving Canadians $2.2 billion a year off what they would pay for the same drugs in the United States. No wonder pressure is building among Americans to do something about it, and no wonder politicians are jumping to meet their complaints.
First in line is Clinton, who argues that no American should “be forced to get on the bus to Canada.” AÍ Gore, his vicepresident and would-be successor, staged a campaign event at a pharmacy to denounce the indignity of the border bus trip. Clinton wants to extend Medicare coverage for those 65 and over to prescription drugs. Two-thirds already have drug coverage, but it’s a canny political move because seniors are among the best-organized voting blocs. It does nothing, however, for the people most in need of help— those with no health insurance at all, including an astounding 11 million U.S. children.
Canadians love to gloat about inequities in the U.S. health system, but this one should give them no satisfaction. U.S. prescription drug prices are indeed high—for a host of reasons. One is the lack of government price controls. Another is that demand is soaring for new generations of drugs that are revolutionizing the treatment of disorders like depression, Alzheimer’s and allergies. American drug companies also make enormous profits: Fortune magazine estimates the pharmaceutical industry is the most profitable of all based on equity, revenue and assets. But they’re also the ones that come up with by far the largest number of breakthrough drugs— drugs the rest of the world snaps up at bargain prices.
The result is that Canadians, protected by price controls, are effectively being subsidized by American consumers. They pay the bulk of the cost of research, development and production of cutting-edge drugs—plus handsome profits for the companies that come up with them. We buy the same products for about half price.
Alan Sager, a health-policy expert at Boston University, calls this odd system “foreign aid” from U.S. consumers to people in other rich countries. Vermont Gov. Howard Dean, himself a doctor, sees his citizens dashing across the border to save money. “Right now,” he says, “somebody’s getting a free ride at our expense.” In fact, that somebody is Canadians. No wonder drugs are the next big batde in America’s health wars.
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