Reimportation: The Solution to the High Cost of Prescription Drugs?

Abstract

This paper is about a provision in the recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003 allowing the reimportation of prescription drugs from Canada under specified conditions. This paper will examine the existing laws prior to the passage of the act, what the new legislation entails, and the likely effect of the legislation. This paper will also examine the underlying policy issues involved in reimportation generally, as well as the reasons why prescription drugs are priced as they are both in the U.S. and Canada. The paper will examine the safety and cost repercussions of a reimportation system, and will evaluate the benefits and risks of reimportation.