MB pharmaceutical sector grapples with U.S. first sale declaration

As U.S. firms change how they import medicine, experts question whether Manitoba companies will lose profit and whether pharmaceutical imports will rise in price.

On paper, the province’s pharmaceutical exports have plummeted this year: a 92.5 per cent drop by the end of April, compared to the same time in 2025. A recent Manitoba Bureau of Statistics report clocks a $706 million decrease.

It comes as United States importers lean into a declaration practice that lowers their tariff payments and changes the way exports are valued.

However, volumes of pharmaceutical shipments from Manitoba likely haven’t changed much, according to Bioscience Association Manitoba. The impact on producers’ bottom lines — and future sales — is still being determined.

“We’re not quite sure of all the ins and outs of it just yet,” said Andrea Ladouceur, Bioscience Association Manitoba president.

American buyers are using the country’s “first sale declaration” requirement. Imports are declared at the manufacturer’s price; normally, costs such as transportation and warehousing would be included.

U.S. tariffs are impacting medicine imports globally. The lower the price of medicine entering the country, the lower the added tariff will be.

“If the tariffs are lower, the costs are lower, the price is lower for the patient,” Ladouceur said, calling it a “win” at a high level.

Canadian companies compete for U.S. sales internationally, including with countries selling medicine for cheaper prices at the manufacturer stage.

The first sale declaration devalues Canada’s geographic advantage, said Barry Prentice, a University of Manitoba supply chain management professor.

“In the case of Canada, of course, we don’t have much difference between the manufacturing price and the border price,” he said, comparing the distance to India’s.

U.S. importers will likely demand their Canadian suppliers, over time, restructure contracts so the first sale price is as low as possible, said Javad Feizabadi, a U of M supply chain professor.

“This gives rise to a squeeze on manufacturer-level margins that is not immediately visible in trade statistics,” Feizabadi wrote in a statement.

Manitoba’s pharmaceutical sector makes up roughly seven per cent of the province’s GDP. Some established manufacturers, including IVC Vita Health, don’t ship to the United States.

Bioscience Association Manitoba is watching how the first sale declaration will affect Canada’s competitiveness, Ladouceur said.

Meantime, she’s got her eye on the U.S.’s request for most-favoured nation pricing on pharmaceuticals.

In May 2025, U.S. President Donald Trump signed an executive order, calling for drug prices in the United States to lower by being tied to foreign drug prices.

“It has the potential to be quite damaging to the Canadian pricing of imported medicines or the ability to access medicine in Canada,” Ladouceur said.

Canada imports more than 80 per cent of its medicine and active ingredients, she added. International exporters may lower their prices in the U.S. and then raise them in other countries to upkeep revenue.

Ladouceur is heading to the BIO International Convention in San Diego with a Manitoba delegation next week. More than 21,000 lawmakers, companies and industry stakeholders registered for the event last year.

Ladouceur said she aims to build partnerships and strengthen supply chains. The delegation has upwards of 60 meetings over three days, she said.

Pharmaceutical exporters in Manitoba need to diversify their customer base, Feizabadi said. He encouraged businesses to invest in supply chain transparency tools and contract structures that “clearly delineate” multi-tier transaction prices.

Manitoba pharmaceutical exports fell 67.5 per cent — or $1.8 billion — in 2025 as customers tapped the first sale declaration.

Albert Friesen, chief executive of Medicure, called the recent declines “a surprise.”

Medicure doesn’t ship its therapeutics products from Canada into the United States. The Winnipeg-based company makes goods in the U.S. and other countries.

Friesen has been in the industry for decades; he said he hadn’t heard anything from peers about export volumes decreasing.

Total Manitoba exports between January and April have dropped 20.1 per cent year-over-year, to $5.9 billion, according to the Manitoba Bureau of Statics.

Once pharmaceutical exports are removed, the drop is 11.8 per cent.

gabrielle.piche@winnipegfreepress.com