By Janice Harvey, RPh, CDE
With the rapidly changing trading relationship between Canada and the US, we have noticed an increase in the commitment of consumers to buy products that are made in Canada and to support local business. To that end, we’d like to address some questions about how the tariffs affect the Canadian pharmaceutical industry. We’ll also look at what we’re doing to make it easier for you to identify Canadian-made products in our pharmacy.
Priority #1: A Stable Supply of Quality Products
It likely isn’t a surprise that Canada’s pharmaceutical industry depends on supplies that are sourced internationally. While many products are manufactured in Canada, the resources to make these products come mostly from China and India. In terms of finished drug products, Canada imports about $30 billion of pharmaceuticals from global sources each year, with roughly 16 per cent of that coming from the United States. Neither Canada nor the US has the capacity to do all of its own drug manufacturing, so the effect of US tariffs will be felt on both sides of the border.
The US is Canada’s largest pharmaceutical customer. In 2023, $9.1 billion of Canada’s $46 billion pharmaceutical products crossed the border to our nearest neighbour. That’s almost 20 per cent of our production. Since the US tariffs will increase the cost of Canadian drug imports, Americans will immediately face a 25 per cent increase in drug costs. Tariffs jeopardize Canadian pharmaceutical exports, and as exports decrease, the tens of thousands of Canadians who work in pharmaceutical supply can expect to face job losses.
US tariffs will also increase the cost of supplies coming into the US (not just from Canada), so the cost of American-made drugs will rise, and so will the cost of those drugs as they are imported into Canada. The Canadian pharmaceutical sector operates under a controlled pricing model, which for many years has limited increases to drug costs even while operating costs for manufacturers and suppliers have increased. According to the Canadian Association for Pharmacy Distribution Management, “Manufacturers may not be able to pass on the cost increases in our price-regulated market. Some companies may choose to stop importing into Canada altogether.” If this happens, we can anticipate even more drug shortages.
This trade war has underscored some of the long-standing challenges in Canada’s pharmaceutical distribution system. There are no easy answers. Looking for new global suppliers takes time. Increasing domestic production is not as simple as it sounds. And focusing only on Canadian-made pharmaceutical products will lead to new supply challenges. We are working with our suppliers to ensure a stable inventory of both prescription and other medications for our patients and customers.
Priority #2: Supporting Canadian-Made Products
It’s not always easy to determine if a product is made in Canada. Under the Consumer Packaging and Labelling Act, there are two ways to identify Canadian products:
- Product of Canada – at least 98% of the costs of producing the item were incurred in Canada.
- Made in Canada – more than 51% (but less than 98%) of production costs were incurred in Canada, which means that some components of the product had to be imported from outside Canada.
When a product label indicates that it has been imported, then it is not made in Canada, even if it is imported by a Canadian company.
For national brand products, it’s not possible for us to look into the production processes for each product. In most cases, the national brands will not be Canadian products. However, many of our private-label (e.g., Option+, Savvy) products are made in Canada. To make it easy to identify those products, look for the “Made in Canada” sticker on our shelf labels. Please note that in some stores we have seen American grocery items labelled as Canadian, so we know that misinformation is out there. If we cannot guarantee accuracy of the “Made in Canada” claim, we will not add a sticker. Or if the country of origin changes, we will adjust our labels. We hope to make it easier to buy Canadian products, but it’s also important that we have a good supply of quality products in store.
We’re Part of the Community
All Medicine Shoppe Pharmacy locations are independently owned franchises. We all operate under the Medicine Shoppe Pharmacy name, yet each location is unique, as each owner has their own vision for the products and healthcare services they wish to offer. We take pride in providing exceptional clinical pharmacy services to our patients, but also in making the extra effort to find and secure the products you need, even with the growing number of manufacturing shortages that we encounter every day. Thank you for letting us be a part of your lives and a partner in your health. We value and appreciate your support.