Trump wants to “equal” drug prices and lower them. Is Canada likely to be affected? – Nationwide

US President Donald Trump has launched a new initiative to lower prescription drug prices for Americans targeting foreign countries.

However, federal government and policy experts say the potential impacts (such as supply shortages and rising prices) from the executive order signed this week are unlikely to hit Canada.

“I don't think this is actually a direct threat to Canada,” said Michael Law, a professor at the University of British Columbia and Canadian research committee chair who has access to access to medicines.

Trump's orders call on the health department, led by Robert F. Kennedy Jr., to mediate a new price tag for the drug next month.

If they don't reach a deal with drug makers, Kennedy will be tasked with developing new rules that will tie together the prices the US will pay for drugs to lower the prices that other countries pay.

“We'll be equal,” Trump said at a press conference Monday. “The rest of the world has to pay a little more, and America is trying to pay less.”

In Canada, drug prices are overseen by a patented medical price review board. It tells Global News that it protects Canadian consumers by reviewing prices and making sure they are not “excessive.”

“If the price of a patented drug is found to be excessive by the Hearing Committee, the board has the power to reduce price cuts to a non-enormous level and implement that order,” the spokesperson said in an email. “The board can also order rights holders to offset excess revenue.”

The spokesman added that the review board will receive public prices for drugs sold in 11 “comparative” countries, including Germany, the UK, Australia and Sweden, which include factors to prices set in Canada.

“Since the US is not in the basket of these comparator countries, (the board) price reviews are not directly affected by changes in US prices,” the emailed statement said.

Regulatory bodies such as the patented Medical Price Review Board and the Pan-Canadian Drug Alliance are negotiating prices with drugmakers on behalf of provincial, territorial and federal health insurance plans, which is why Canada's drug costs are generally lower than in the US. Dozens of other countries have similar national regulators.

According to experts who spoke with the Associated Press after Trump's announcement, the US drug market operates primarily as a fragmented system in which companies negotiate with profit managers of individual insurance companies or pharmacies, commonly known as PBMS.

In countries with a single regulatory body, if regulators leave negotiations, pharmaceutical companies are likely to lose profits entirely and are more likely to accept lower prices than without trade.

In 2022, the US Congress passed a new law allowing Medicare to negotiate low prices for a small number of prescription drugs starting in 2026.

A 2024 report published by the RAND Research Organization found that US prices were 2.78 times higher than 33 comparable countries prices for all drugs, using data from 2022. This includes Canada, where drug prices were only 44% of US prices, according to the report.

Trump also conducted a federal investigation into their practices and threatened pharmaceutical companies opening US drug markets to introduce more imported drugs from overseas if prices were not reduced.

The law said it is likely that pharmaceutical companies will not allow it to happen nationwide.

“I think it's very unlikely that US brands will reduce their margins by sending huge amounts of drugs to Canada.

“It's very easy for a company to limit the scope of its activities.”

Canada also has no manufacturing capacity to meet domestic orders while meeting mass imports into the US, the law said.

Individual states have been trying to source cheap medicines from Canada for decades.

In 2024, Florida became the first state to acquire a drug import program approved by the US Food and Drug Administration (FDA) under federal law.

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However, more than a year later, the program has not yet begun, and no medicines have been imported from Canada to Florida.

Based on federal government requirements, state officials must first test drugs to make sure they are authentic and rerab them to comply with US standards.

Trump in April signed an executive order that cuts drug costs, particularly instructing Kennedy to “rationalize and improve” programs that allow the country to import drugs from Canada within 90 days.

Colorado says it expects its own Canadian drug import program to be approved soon by the FDA, and other states have also submitted applications.

Health Canada has said since the Florida program was approved, “we have taken all the necessary actions to protect the drug supply and to ensure Canadians have access to the prescription drugs they need.”

A spokesperson said the department has reminded them of its obligations under Canadian Food and Drug Control to prohibit the ban on the sale of certain drugs to the Canadian market outside of Canada.

“Health Canada is not reluctant to take immediate action to address any non-compliance violations,” the spokesperson said in an emailed statement.

Trump has also vowed to impose tariffs on foreign medicines.

Last month, the US Department of Commerce began an investigation into Section 232 on whether these imports pose a national security threat.

The department did not respond to questions from Global News about whether the FDA-approved state drug import programme conflicts with its investigation or future tariffs.

A spokesperson for the FDA spokesman told Global News in the background that he was “working on implementing an executive order related to drug imports.”

The majority of the medicines used in drugs sold in North America come from India and China. This means that tariffs on drugs could raise prices for Americans.

The law said that Indian and Chinese manufacturers facing tariffs could also pass these additional costs to Canadian customers, but only if those drugs are imported from the US

“India produces the majority of the medicines sold worldwide, especially in the case of generic drugs,” he said.

“If these drugs are imported directly from India to Canada, US tariffs have little effect on those products.”

-Includes files from Global's Katie Dangerfield and Associated Press