- within Food, Drugs, Healthcare and Life Sciences topic(s)
- in United States
- with readers working within the Pharmaceuticals & BioTech industries
- within Tax and Environment topic(s)
The United States faces significantly higher pharmaceutical prices compared to other developed nations, with brand-name drugs averaging more than three times the costs found abroad. This disparity in pharmaceutical prices between the United States and other countries creates an opportunity for parallel trade. Parallel trade refers to the import of products into one country from another where the same products are sold at a lower price. This Article explores the potential for parallel trade of pharmaceutical products between the United States and Canada, with Florida taking the lead through its newly approved Section 804 Importation Program ("SIP") proposal. To analyze the potential of Florida's SIP, this Article first outlines the historical and legal barriers to parallel trade in the United States, including the evolution of U.S. Food and Drug Administration regulations and key developments in patent law, such as the Supreme Court's adoption of international patent exhaustion in Impression Products v. Lexmark. It then examines Florida's SIP proposal in detail, including the projected savings, logistical framework, and pricing structures. Florida anticipates substantial cost savings through the program; however, the extent of the program's success is highly contingent on external factors, particularly the Canadian government's willingness to permit large-scale exports without compromising its own drug supply. This Article also examines whether Florida should have broadened its pool of importation countries beyond Canada to reduce potential supply constraints and other risks. It then evaluates the broader policy implications of parallel trade, both within Florida and across the United States. Ultimately, the Article concludes that while Florida's SIP initiative is promising in theory and may serve as a model for other states, numerous variables could limit its long-term effectiveness.
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