This study looks at retail prices of three patented
prescription drugs in three American and three Canadian areas
along the border between Canada and the United States. Although
finding that Canadian prices are significantly lower than
American prices, it also finds significant differences in prices
within each of these areas, as well as between areas in the same
country. Given these domestic price differences, a shopper can
save almost as much money by bargain hunting within his own area
as by crossing the border.
The study finds that differences among services offered by
individual pharmacies explain some of the price differences. It
also indicates that income differentials among regions within one
country may also explain price differences.
In an attempt to understand the consequences of subsidies to
pharmaceutical consumption on prices for those who pay out of
pocket, the paper looks at current government benefits to
patients who use prescription drugs. It finds that Canadian
patients do not necessarily have easier access to prescription
drugs, and that the effect of these programs on market prices is
This research shows that there is no such thing as one Canadian
or one American price for prescription drugs. Because of this,
policy-makers who seek to equalize Canadian and American
pharmaceutical prices face an impossible task.