Of course it’s worthwhile. Most drugs are relatively cheap to manufacture — the cost is in research, development, and regulatory hoops.
So if they have a way to differentiate markets, they can sell drugs at a price which pays for their development here, and can still make money by selling additional medication in other countries.
Good explanation. So which do you think is the more likely drug company response to us allowing reimportation and the extreme scenario where the entire United States gets all its drugs through Canada?
1. "Oh well, I guess we have no big R&D supporting market anymore. So I guess we'll stop all R&D, fire all our scientists, and just make money selling the drugs we already have made."
2. Take legal steps to effectively say "not for sale in Canada", at least for a certain tier of drugs, so that Canada (and, in turn, the U.S.) no longer is given those drugs at their price-controlled price. But continue selling them to the U.S. at the regular price (or slightly lower, now that we're not subsidizing Canada).
Seems a lot of people here assume that (1) is what would happen. Which, indeed, would be a shame.
However, if (2) is what happens, as I think is more realistic, then the only net effect (in what is, of course, an extreme case) would be that Canada would be deprived of drugs unless/until they give up their stupid price controls.
Seems to me that by 'not allowing' reimportation through Canada, we are effectively shielding Canada from feeling the costs of her price control laws, and at the same time (as many here have pointed out) subsidizing them with higher prices here. I'm not sure why Freepers would want to subsidize Canada's protectionist socialism and shield them from the negative effects of their socialism. Usually free markets (is not 'yes you can buy from Canadian outlets if you want' the free market answer?) are seen as the antidote to socialism, and I don't see why this should be an exception. The negative effect of a price control law is supposed to be that you don't get enough of the good in question, i.e. supply doesn't meet demand.
If we want Canada's socialist, free-rider policy to continue, by all means let's prohibit ourselves from arbitraging it. However, if we want them to actually experience the ill effects, let's pour it on the demand side. We'll see how long their price controls last when no pharm company is willing to sell any drugs to them anymore. Like you say, drug companies find it worthwhile to sell to Canada because it's additional marginal profit given the fact of the U.S. market. However, if Canada becomes, in effect, an extortionist, undercutting middleman ("you must sell to us for X, and also, we're gonna undersell to your prior market"), seems to me that pharm companies would stop finding the little arrangement so worthwhile.
Wouldn't they?