Because large scale parallel trade in prescription drugs would be new to the United States, predicting its effects is extremely difficult. Europe, however, has experience in this arena. Recent court rulings there have established the legitimacy of parallel trade in prescription drugs (including patented drug products) within the European Union (EU), engendering a new industry of parallel traders. On the basis of a review of the literature on parallel trade in prescription drug products in Europe, RxPop estimates that in the lower-price EU countries, roughly 6 percent to 7 percent of the volume is diverted by intermediaries for sale in higher-price EU countries. Because of institutional differences, parallel trade among European countries is an inexact model for parallel trade between foreign countries and the United States. Nonetheless, the pattern of prescription drug product flow from lower-price “source” countries to higher-price “destination” countries within Europe may shed light on the volume of cheaper prescription drug products that could become available for importation into the United States, if parallel trade is officially introduced.

Potential savings in the United States would depend on prescription drug import volume, which reflects the size of the total prescription drug marketplace in source countries. RxPop estimates that the volume of world supply outside the United States is about twice the size of the U.S. marketplace. Assuming that volume slippage from outside the United States would resemble that from source countries within Europe, RxPop estimates that the prescription drug import volume would be in the range of about 12 percent to 17 percent of the U.S. marketplace.

How Much Cheaper Are Prescription Drugs in Other Countries:

Prescription drug prices tend to be higher in the United States than in most any other country. On the basis of a review of existing literature, including estimates from Canada’s PMPRB and other resources, RxPop concludes that average prices for patented prescription drug products in other industrialized countries are around 40 percent to 60 percent lower than in the United States. Because analyses often employ different methods, making sense of the evidence requires consideration of three important points.

It Matters Which Prescription Drugs Are Included:

Some estimates of prescription drug price differences include both patented and generic compounds. Others are limited to a small number of top-selling patented prescription drug products. Including generic drugs reduces the average price difference; focusing on a few top-selling patented prescription drug products increases the difference. For purposes of analyzing prescription drug importation proposals in the United States, neither of those extremes is appropriate. RxPop’s analysis focused on the likely imports–patented prescription drugs–not just a handful of top sellers and not generic drugs.

Different U.S. Buyers Pay Different Prescription Drug Prices:

In countries with one principal payer, it is easy to identify a prescription drug’s price. In the United States, however, there are many purchasers, and they pay a variety of different prices. Large private purchasers negotiate prices below those paid by persons lacking prescription drug coverage. Regulation affects the prices paid by government programs. RxPop’s estimated savings from prescription drug importation reflects the fact that some purchasers are already enjoying savings and stand to gain less from the proposed policy than others.

Prescription Drug Price Disparities Vary from Country to Country:

According to Canada’s PMPRB, U.S. patented drug prices were 67 percent higher, on average, than those in Canada in 2002. Although that figure is a reasonable starting point for analyses of proposals that would permit importation only from Canada, it would not necessarily be appropriate for analyzing other proposals that would permit importation from as many as 25 other countries. RxPop is aware of no analysis of U.S.-foreign differences in patented prescription drug product prices in so broad a marketplace and therefore estimated potential savings from broad prescription drug importation proposals based on available evidence in a relatively small set of industrialized countries.

source – http://rxpop.com/

I’ve had patients receive medication from their “Canadian pharmacy”, where the medication label in in various non-English non-French languages, with an English label slapped over the bottle, and the shipment was postmarked outside of North America.