Cross-border drug-trafficking.

A report issued in February by the Vancouver-based Fraser Institute entitled "Price Controls, Patents, And Cross-Border Internet Pharmacies: Risks To Canada's Drug Supply And International Trading Relations," by Brett J. Skinner, concludes that cross-border Internet drug trade between Canada and the U.S. violates intellectual property rights of pharmaceutical companies. Almost half of the sales value for generic drugs from Canada come from drugs not yet offered as generics in the United States, suggesting they remain under active patent protection, says the report.

Moreover, the illegal sales also pose a threat to Canada's own drug supply. In some cases, only limited amounts of patented drugs are sent to Canada by American pharmaceutical companies for Canadian consumption. If those drugs are shipped back to the United States, Canadians lose access. "When the estimated potential individual and bulk demand from the United States for cross-border drugs is totaled, the number of American consumers that might compete for access to the Canadian drug supply is nearly four times [approximately 119 million] the size of Canada's entire population." Since Canada does prevent flexible pricing, drug makers look for the least costly option for selling the drugs--meaning they will cap their shipments to Canadians and ship more to the Internet market. The Fraser study found that, as of mid-2005, almost 70 percent of Canadian Internet pharmacy sales went to the United States.

Also, it turns out that Canada's socialist methods have not resulted in lower prices for those generic drugs that are legally available in both countries. Research indicates that 74 of the 100 most commonly prescribed generic products (in 2003) were priced higher in Canada, adjusting for currency equivalency.