OBJECTIVES : To address high prescription drug costs, the United States (US) has proposed parallel importation of patented drugs from Canada, which are sold at lower costs. The objective of this review is to assess the implications of the proposed US “import-from-Canada” legislation, using both prior Canada-US and European Union (EU) parallel trade examples.

METHODS : A targeted literature review (TLR) was conducted in relevant databases (EMBASE, Medline, Cochrane, PubMED, PAIS Index, and CINAHL) to identify articles relating to Canada-US parallel trade within the last 20 years (supplemented by a hand-search for EU examples).

RESULTS : Overall, 489 articles were identified from the primary search related to Canada-US parallel trade of drugs, leading to 13 articles for analysis after title-abstract and full-text reviews. This search was supplemented by 40 articles related to EU parallel trade through hand-searching. The articles were extracted for: countries involved, relevant legislation/policies, and key findings (e.g. net policy benefits/harms, supporting evidence, etc.) using SWOT framework for analysis. It is important to note that most literature (62%) on this topic was based on opinions versus qualitative or quantitative evidence. Few articles (n=4) reported hypothesized benefits of parallel trade. Claimed benefits included: lowered drug costs, rise in virtual pharmacies, and diminished price-differentiated markets. However, several articles (n=9) identified negative factors, such as: unsustainability of reduced drug prices, threat in profitability of US pharmaceutical companies, arbitragers gaining profit (i.e. insignificant consumer savings), limited drug supply, and increased counterfeit drugs. This is reflective of outcomes observed in the EU, where parallel trade resulted in high profits for arbitragers and drug shortages in source countries.

CONCLUSIONS : Parallel trade from Canada is unlikely to result in lowered drug costs to American consumers. As Canada implements new dramatic drug price controls (i.e. Patented Medicine Prices Review Board [PMPRB]), manufacturer response to the US legislation may be exacerbated.