The prospect of Americans raiding Canadian pharmacies for cheaper prescription drugs is raising the spectre of drug shortages north of the border.

On Wednesday, U.S. President Donald Trump's administration said it would create a system to allow Americans to import cheaper Canadian drugs legally. The policy change would reverse previous decisions by past administrations by allowing American states and pharmacies to buy more affordable medicines north of the border. Washington offered no estimate of when this new policy would start.

Ten U.S. states have passed or proposed laws to allow pharmaceutical imports, but those laws have no teeth without U.S. federal approval.

Reacting to the news, Health Minister Ginette Petitpas Taylor said ensuring Canadians continue to have access to the medicines they need "is one of our top priorities." She said her department is in touch with U.S. officials to learn more about the proposed changes to American drug policy.

We could export every pill, every vial of insulin ... and the U.S. would still have a problem. - Health policy academic Joel Lexchin

"(We) will be working closely with health experts to better understand the implications for Canadians and will ensure there are no adverse effects on the supply or cost of prescription drugs in Canada," the minister said in a media statement.

If Trump's plan becomes a reality, it could be the largest change in U.S. health care policy since Obamacare. But while it could be good news for Americans struggling to afford prescriptions, concerns remain about the risk of drug shortages in Canada.

Documents show Canada opposed to U.S. drug run

The Reuters news agency uncovered Canadian government documents earlier this month showing Ottawa opposes any American plan to lower its drug prices through accessing Canadian supply.

"Canada does not support actions that could adversely affect the supply of prescription drugs in Canada and potentially raise costs of prescription drugs for Canadians," says an April briefing note for Canadian officials Reuters obtained under freedom of information laws.

The document instructs Canadian officials to say that "importing drugs from Canada is probably not your silver bullet."

The documents also cite a 2010 study which estimates that if 10 per cent of American prescriptions were filled across the border, Canada's drug supply would run out in 224 days.

'Fundamentally the wrong approach'

Joel Lexchin, a professor emeritus at York University's School of Health Policy and Management, echoed the briefing note's arguments.

"We could export every pill, every vial of insulin in this country," Lexchin said. "And the U.S. would still have a problem."

America's problem, he said, is that it doesn't exercise any price controls, making it "unique" among industrialized countries.

"This is fundamentally the wrong approach that the U.S. is taking," Lexchin said. "That just won't work."

“If they’re importing large quantities of brand name drugs that’s where we could potentially see a problem,” said Lexchin. “California’s got more people than all of Canada. If California wants to import, as I said, there goes the entire drug supply, potentially, of Canada.” <a href="https://t.co/D3APa5cUiB">pic.twitter.com/D3APa5cUiB</a> —@PnPCBC

Lexchin said Canadian drugs are cheaper because the government regulates the price of generic and brand-name medication. The prices of cheaper generic drugs, which account for most prescriptions, are set through deals with drug companies at the provincial and national levels.

But prices are far higher for brand-name drugs that treat more complex illnesses like cancer and hepatitis C. Canada regulates brand-name drugs through the Patented Medicine Prices Review Board. The board establishes the maximum price at which a drug can be sold, minus inflation. Then the Pan-Canadian Pharmaceutical Alliance steps in and bargains to get the brand-name drug sold at even lower prices.

A 'sad solution'

Marc-André Gagnon, a pharmaceutical policy researcher at Carleton University, said allowing Americans to buy Canadian drugs would be a "sad solution" to their price problem.

But Gagnon said he doesn't anticipate there would be massive shortages in the Canadian drug supply in the longer term.

"There is a lot of fear-mongering by drug companies," he said. "These concerns for me (are) a bit blown up out of proportion."

Gagnon said that, in the long term, the Canadian market would respond to demand increases from its southern neighbour, creating new jobs in the pharmaceutical industry in the process.

"Maybe there are good sides in this proposal as well," he said.