Re-Importation - The killer of US pharma

The glorious days of high profit margins in the US are about to come falling down! Why?

By Anonymous (not verified) on Mar 13, 2009

The glorious days of high profit margins in the US are about to come falling down!

Why?

Has the pipeline finally dried up? Has the recession finally hit pharma? Are we leading much healthier lives? Well... no, none of the above, not really. Though they are not the unique drivers they certainly are key contributors to what could be the most historic impact on global pharma in the last 25 years.

And what it is?

Well, the title may give it away but US re-importation bill backed by Senator Byron Dorgan could revolutionise the way pharma does business in the US and has far-reaching impacts on the proposed exporting coutries such as the UK, Australia, Japan and significanly Canada. As the USA's biggest trading partner and nearest neighbour the Canadian pharma market would be over-ran by pharmacies and wholesalers from the US. It is predicted that if the state of California alone was to solely purchase cheaper drugs, upto 2/3rd's in some cases, from Canada then it would bleed the market dry in under a week such would be the demand.

Re-importation could see a government saving of upto $50bn. Which would severly damage the pharma industry. Pfizer, GSK and Eli Lilly have already took steps to shut off supply to Canada and other targeted coutries in preparation for the bill if passed, which co-incidently, seems very likely under this new administration. This may lead to a super clash of the titans which will see big pharma going head to head with the US government in the federal courts which could last for a considerably long time.

Of course the bill has not been passed yet so I may just be scare-mongering but it is worth sitting up and taking notice early on.

So you can remember the good times if they end soon ;-)