This study measures and analyzes the export trade in
prescription drugs between Canadian Internet pharmacies and
American consumers. It does not directly measure the additional
value of the cross-border drug trade that also occurs between
physical "brick-and-mortar" retail pharmacy locations and
pedestrian consumers, nor does it consider international flows in
the cross-border resale drug trade beyond Canada and the United
Using the most recent, detailed, and authoritative data sample
yet published on the subject, this study examines the total value
of the cross-border Internet drug trade between Canada and the
United States over time. The value of the trade is also measured
according to the location of the Internet pharmacy by province,
the therapeutic classification of the drugs being traded, and the
brand name or generic status within Canada of the drug products
being traded. The potential for future growth in the cross-border
prescription drug trade is examined.
This study also compares the patent status of the top-selling 500
cross-border Internet drugs in both Canada and the United States.
The implications and risks to Canada's international trading
relationships arising from findings about the cross-border patent
status of the drugs being traded will be discussed.
The public policies that make the trade possible, and the
economic incentives that drive it are explained. The business
responses available to drug companies are explained and the risks
to Canada's drug supply are assessed.
Finally, this paper documents the historical development of the
trade and the special-interest politics that are encouraging
This paper is divided into two sections. Section 1 describes and
explains the empirical findings about the cross-border Internet
drug trade between Canada and the U.S. and the economics driving
it. Section 2 describes the background to the cross-border
Internet drug trade as well as the special interests associated