tariffs and healthcare in canada: the threat of rising drug prices, limited access and risks to medical research
6 minute read
when tariffs are imposed on products, they become more expensive for the buyer. these products can range from the building blocks needed to create research labs and medicines for testing and trials, down to the finished product itself.
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the discussion of tariffs has dominated the airwaves for the past few months, primarily due to president donald trump’s bold decision to impose new tariffs on goods entering the united states. the choice to abandon a deal already put in place by the leaders of both canada and the u.s. has made citizens on both sides of the border fearful for what could happen to the economy.
one area, medical supplies and pharmaceuticals, is at the forefront of the conversation for many because a sizeable portion of the canadian population—roughly 27 per cent—already cannot afford the medications or devices they need, leading many to fear how much further away from affordable they can become.
john adams, board chair of the best medicines coalition, has various interests in the tariff game from both a professional and personal perspective. his son has a rare inherited metabolic disease, and he has chronic conditions to contend with.
he notes that if essential medicines are included on the tariff list, the affordability problem will only worsen.
“the tariffs are not just going to affect people’s access to medication now because the costs are going to go up. it’s going to affect future medications as well,” he said.
future medications will be affected because research and development will also be stunted by economic issues faced by medical scientists when developing new therapies.
“(it’s) the absolute decimation of the research funding by the u.s. government for new therapies. it’s a world-class tragedy, in my opinion,” he continued.
how the tariffs work for medications
when tariffs are imposed on products, they become more expensive for the buyer. these products can range from the building blocks needed to create research labs and medicines for testing and trials, down to the finished product itself.
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from a to z, everything will become more expensive. for example, if a researcher needs to purchase a component of a medication from the u.s. and it costs more than it did prior to the new tariffs, those additional costs will trickle down.
because it costs more to produce a medication, more money will need to be invested in the research phase. if more money is required to conduct research, the finished product will then need to be sold at a higher price to recoup the initial investment, passing on the fees from each step of the process.
organizations such as the national institutes of health (nih) and the centers for disease control and prevention (cdc) are being “devastated,” according to john, along with other large organizations that provide funding for medical research.
“the scientific research enterprise, which america has been world-class and has been the world leader in many, many areas … the donald trump wrecking ball is being taken to it in an act of incredible stupidity,” said adams.
it’s not just research and the medications that will drive up prices. it’s the supply chain.
shelita dattani, senior vice president of pharmacy affairs and strategic engagement at the neighbourhood pharmacy association of canada, notes that all the other aspects of getting medications to people in need will add to the strain.
“if there are supply challenges, if there are costs, whatever they are, like a transportation cost increase, we’re instead of passing those costs on like others may do in the supply chain, manufacturers may pass them on to wholesalers,” she said.
canadians also rely heavily on foreign organizations to inspect products as well as ingredients, such as the food and drug administration (fda). however, as adams notes, those organizations are also being “decimated” in the united states, and canada lacks the same infrastructure to conduct those inspections independently.
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“without that, canada’s kind of on a boat without a paddle when it comes to inspections at that point,” he said. “and that’s something we need to negotiate with like-minded other countries to build up capacity to do those inspections. australia, japan, south korea, taiwan, and of course, the uk, the european union and switzerland. we actually need to very rapidly build up a replacement for the loss of fda inspections.”
what happens when tariffs are imposed on medications
the consequences of these tariff actions will only exacerbate already existing problems within the healthcare system.
dattani notes that it’s not just prices that will be a problem. drug shortages are also a high possibility.
“we could see our drug prices go up. we could see disruptions to our already sensitive drug supply,” she said. “we’ve already had shortages, and we could see increased shortages. i’m not saying that we’re seeing them, but it’s just a risk, right?”
she also notes that it’s really on the back of the pharmacies to take the brunt of it all because they’re the last stop before the patient, and absorbing costs is their ethical responsibility to ensure that canadians still have access to the medications that uphold their quality of life while living with chronic or long-term diseases.
“we get kind of squeezed in the middle there because we’re not like any typical retail business, our customers are patients,” she said. “we will, in many circumstances, be waiving those costs and absorbing them ourselves. it’s almost like an ethical decision as well to ensure that patients can (get their medications) these people need their medications.”
while dattani notes that pharmacies will assume the responsibility of higher costs, patients can still be on the losing end of the deal due to the impact on services.
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“if we’re absorbing those costs in pharmacies, big, small, across the country, this could actually add risk to how sustainable all of our different pharmacies are, pharmacy members, other pharmacies, it could actually do damage to the frontline services pharmacies provide.”
she notes that if they’re taking on the additional economic burden of tariffs, they’ll be “working on really thin margins” and may not be able to serve all communities as well, stay open for as long, thus reducing accessibility, and hinder the action of public drug programs.
hoping for an ethical conclusion
at the time of writing, the tariffs imposed by the u.s. on other countries remain in effect. however, prime minister mark carney has dropped the retaliatory tariffs against the u.s. to almost zero in an effort to protect the canadian economy.
this political move is being hailed as a strategic approach that enables the strengthening of the canadian economy, while also giving leaders the time to pursue new trade deals with countries other than the u.s.
as it pertains to medications, there are still tariffs on certain u.s.-imported drugs and pharmaceutical products, which puts the country at risk of being slapped with heftier price tags and disrupted supply chains from our neighbours to the south.
still, even with the goal of making canada stronger and standing on its own two feet, tariffs come with more downsides than potential benefits.
“we’d love to see more innovation across the country, so i think that you see lots of dialogue around that already in terms of more canadian-led options. there’s always a desire to see our domestic capacity increasing,” said dattani. “the right option is that we have targeted investments from our government and domestic innovation in manufacturing and in research in canada that doesn’t risk any harm to patients or providers. so, tariffs are not the way to get there.”
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the conversation surrounding changes that need to be made continues to evolve as country leaders make new decisions regarding tariffs, and individuals like dattani and adams, as well as those most in need of medications and medical devices, hope that when all is said and done, the conclusion will be on the right side of history.
“we haven’t had a lot of dialogue around healthcare specifically in this election,” said dattani. “it’s been a very trade and tariff and economy and trump-focused election, but our job is to continue to keep it in the dialogue.”
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