This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 OTTAWA 003709 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD ECON SOCI TBIO CA SIPDIS
SUBJECT: OTTAWA REQUESTS GUIDANCE ON LEGISLATION ADDRESSING 
CROSS-BORDER DRUG TRADE 
 
REF: A. OTTAWA 3482 
     ¶B. OTTAWA 1803 
 
¶1.  (SBU) Summary and action request:  The U.S. 
pharmaceutical industry has repeatedly asked for Embassy 
support for Canadian legislation to ban bulk exports of drugs 
from Canada, in anticipation of Congressional action to 
legalize bulk imports into the United States.  A Canadian 
drug export ban, pre-emptive or reactive, raises NAFTA 
national treatment issues and is not necessarily in our 
interest at a time when we are trying to develop systematic 
policy responses to avian flu or other potential pandemics. 
Action request:  While the legislation will not progress 
until Parliament returns, Post requests USG guidance on how 
to respond to inquiries about our position on this 
legislation. Post believes that USG should remain neutral on 
this issue and requests guidance supporting that position. 
End Summary. 
 
¶2.  (U) Bill C-83, "An Act to amend the Food and Drugs Act 
(drug import restrictions)" had the dubious honor of being 
the last legislation to be tabled before Parliament was 
dissolved at the end of November.  Stakeholders generally see 
the introduction of the legislation as a political ploy, 
allowing the Health Minister to take credit for action 
without committing much political capital.  The issue has 
played no role in the political campaign so far, and one 
industry contact describes it as "more of a shield than a 
weapon".  Because it was introduced but not passed before the 
government fell, it will need to be re-introduced after the 
January 23 elections. 
 
 
The mechanism:  shortage-based restrictions 
------------------------------------------- 
¶3.  (SBU) Bill C-83 gives the Health Minister the authority 
to prohibit "...export of a drug or class of drugs if the 
Minister is of the opinion that there is a shortage or likely 
shortage of a drug or class of drugs (in Canada)."  The bill 
attracted minimal press coverage and seems to have 
disappointed most major stakeholders, many of whom (including 
internet pharmacies and the pharmaceutical industry, 
traditional adversaries) supported a pre-emptive bulk ban. 
The Canadian pharmaceutical industry dislikes C-83's approach 
because of its uncertainty and selectivity, while the 
internet pharmacy industry had hoped that the bill would 
specifically address "contrived shortages" (that is, 
counteract major drug companies' decisions to restrict sales 
to internet pharmacies.)  Patient and doctors' groups worry 
that the proposal to monitor for potential shortages is not 
workable, pointing out that once a shortage or even a threat 
of a shortage is evident, it may be impossible to react 
quickly enough. 
 
Other provisions 
---------------- 
¶4.  (SBU) The bill specifically excepts from any potential 
export restriction any "individual in Canada if the drug is 
for the use of the individual or an accompanying dependent 
and the quantity of the drug sold or exported....does not 
exceed the quantity required for a 90-day period."  This 
exception seems to leave the door open to Americans who 
physically cross the border to buy drugs in Canada.  Bill 
C-83 does not address Health Minister Dosanjh's personal 
campaign against co-signing (the practice of a Canadian 
doctor signing masses of American prescriptions with little 
or no contact with the patient).  However, Health Canada 
states that it is still assessing feedback on the co-signing 
issue.  Based on our consultations with stakeholders, we 
suspect that the feedback ranged from lukewarm to strongly 
opposed. 
 
 
Public reaction and potential anti-American rhetoric 
--------------------------------------------- ------- 
¶5.  (SBU) The cross-border drug trade is not, so far, an 
issue in Canada's current election campaign.  Anti-American 
rhetoric is popular at the moment, however, and it is 
possible, although not probable, that the cross-border drug 
trade issue could re-emerge. During President Bush's visit to 
Canada last year, press commentary treated suggestions that 
Canada might consider regulating prescription drug exports as 
U.S. "bullying" of Canada to enforce U.S. laws.  During the 
last round of attention to the issue, Health Minister Dosanjh 
told the House of Commons Health committee that "one faction 
(of U.S. politicians) wants to actually openly smash our 
pricing regime..." 
 
Action Request 
---------------- 
¶6.  (SBU) A number of Canadian stakeholders, as well as U.S. 
pharmaceutical manufacturers and their subsidiaries, continue 
to seek ways to stem the tide of low-priced drug re-exports 
to the United States.  Some are genuinely concerned about 
shortages and price pressures in Canada, while others may be 
hoping to short-circuit pending U.S. legislation to legalize 
bulk exports of price-controlled drugs from Canada, which 
could disrupt the traditional regulatory segmentation of the 
two markets that allows pharmaceutical companies to maintain 
large price differentials in the two countries. However, in 
our view an export ban could raise NAFTA national treatment 
concerns down the road.  It is also a potentially 
complicating factor in future efforts to develop effective 
North American responses to potential pandemics or other 
heath crises, especially as there is no mirroring U.S. 
legislation.  As such, we do not believe it is in our 
long-term national interest to promote the potential use of 
export bans, and we recommend maintaining USG neutrality on 
this issue.  Action Request:  We request guidance from 
Washington agencies and recommend that the guidance be to 
remain neutral on the issue. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS