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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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