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Prescription Drug Prices in Canada and the United States, Part 1: A Comparative Survey

Type: Research Studies
Date Published: September 1, 2000
Research Topics:
This study compares the prices of prescription drugs in Canada and the United States. The measure used is the replacement cost, at Canadian prices, of drugs consumed by the average American pharmacy or consumer. The sample was selected from the drugs consumed in the largest quantities in the United States. This ensures that the study captured non-patented as well as patented drugs. Other studies that compare drug prices across borders use price indices, which overwhelmingly reflect the prices of patented drugs.

The study finds that prescription drug prices are lower in Canada than in the United States. However, there is considerable variance among the price differences. A certain number of drugs are more expensive in Canada than in the United States. In all cases, these drugs are generic drugs. Indeed, if American consumers paid Canadian prices for generic drugs, they would pay higher prices than they do now.

As well, patented drugs have a smaller Canadian discount than branded, non-patented drugs. This is interesting because Canada has a price regulator, the Patented Medicine Prices Review Board, which controls patented drug prices but not non-patented drug prices.

The fact that generic drug prices are often higher in Canada than the United States and that branded non-patented drugs have a greater Canadian discount than patented drugs invites a closer examination of the effects of Canada's drug-price control regime.
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