3 Reasons That Make Canadian Drugs Cheaper

3 Reasons That Make Canadian Drugs Cheaper

Demand for Canadian drugs has increased worldwide due to their low prices and high efficacy in curing health problems. More and more Americans are purchasing drugs from online Canadian pharmacies to cut down their medical expenses. According to a cross-sectional study, purchasing drugs from online pharmacies in Canada can result in significant savings. The study involved three leading online US drug chain pharmacies and 12 Canadian online pharmacies. It was found that 41 out of 44 brand name drugs were relatively less expensive in Canada. Moreover, the study revealed that nearly 24 percent per unit of drug can be saved by purchasing medicines from online Canadian pharmacies instead of online U.S. pharmacies. 3 Factors That Contribute Towards the Reduced Costs of Canadian Drugs There are several reasons that contribute towards the lower costs of Canadian drugs including: Exchange Rates: One of the key factors that keep the price of the Canadian drugs low is the difference in the value of the US and Canadian currency. The value of Canadian dollar is lower than the US dollar. So, it takes less US dollars to buy something from Canada. The favorable exchange rate makes the services and products including medicines in Canada cheaper. Price Cap: The US government has not implemented any stringent pricing policies to regulate the prices charged by pharmaceutical companies. This has allowed the pharmaceutical companies in the US to become more aggressive with their pricing policies. However, the Canadian government has put a cap (or maximum limit) on the amount the pharmaceutical companies can charge the drug distributors and the pharmacies. The Canadian government has established a quasi-judicial body in 1987, the Patented Medicine Prices Review Board (PMPRB). The agency reviews, set limits and regulates the prices of Canadian drugs. Moreover, each Canadian province is allowed to implement additional price control policies specific to the region. This reduces the wholesale costs of Canadian drugs by almost 5 percent. Since the Canadian pharmacies pay less for the drugs, they are able to sell them at a lower price. Advertising: The pharmaceutical companies in the US and New Zealand are allowed to advertise the prescription drugs directly to the consumers. The US medicine companies spend million of dollars on advertising their products. Moreover, these companies recover their advertising costs by charging more to the consumers. However, in Canada the pharmaceutical companies are restricted from advertising their products directly to the consumers. These companies do not spend thousands of dollars on advertising their drugs, which reduces their marketing costs. This allows them to sell Canadian drugs at much lower prices.

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