At the same time, the Canadian government often infringes on U.S. and companies' rights to drugs they manufacture by requiring "compulsory licensing" of those medications. If the drug maker doesn't agree to sell its wares at Ottawa's set prices, "Canada reserves the right to ignore the drug patent and allow its domestic firms to produce a generic equivalent," Goodman writes.
Meanwhile, since there is no such requirement or price control on generic drugs, Canadian companies are free to charge what they wish.
The result, says consulting firm Palmer D'Angelo, is that Canadians routinely pay more than twice as much as Americans do for the most-used generic medications.
That is a finding supported by the U.S. Food and Drug Administration, Goodman observed. In some cases, the FDA found Canadians paid 2 to 3 times more than Americans.
In the end, though Americans pay top dollar for name-brand medications, they pay nearly bottom-dollar for the most popular generic medicines, Goodman found.
Free trade principles could resolve the problem, he notes.
"For starters, we should insist that other countries respect patent rights, including the right of the patent holder to refuse to sell," Goodman says. Countries like Canada "want Americans to fund development of new drugs, while their own country pays only the marginal cost of producing the pills. This must stop."
Also, he says, drug makers should negotiate their own contracts, terms of sale, etc.
And finally, "other countries need to open their markets to American producers of generic and OTC drugs," he wrote.
"We should not allow regulation to function as protectionism under another name."
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