Why Are Canadian Drugs Cheaper?

Why Are Canadian Drugs Cheaper?

Why Are Canadian Drugs Cheaper?

According to Industry Canada, a government department responsible for economic development, investment and R&D, pharmaceutical sales in Canada have a 3% share of the global market. This makes Canada the 9th largest market in the world for drugs. Prescription and non-prescription Canadian drugs are manufactured by branded and generic medicine companies. A major feature of the Canadian drugs market is that most of the prescription medicines are cheaper in the country than in the US. Since there is a stark difference in the prices of drugs in the two countries, many Americans prefer to buy their medicines from Canadian pharmacies. Cross-border internet pharmacy sales constitute a significant proportion of total drug sales in Canada. Reasons for Price Variation Between US and Canadian Drugs

According to an article in the Journal of Medicine, Americans continue to head to Canada to buy cheaper prescription drugs. The number of people crossing the border in person or ordering over phone, by fax or over the internet has continued to grow over the past few years. This is because the Canadian government has introduced several price control measures that allow the sale of prescription medicines, safely and at affordable prices. Several factors contribute to this variance in the cost of the US and the Canadian Drugs:

There is a ceiling or a cap on the amount that can be charged by the various drug companies from pharmacies and other distributors of Canadian drugs. This leads to a reduction in the wholesale cost of medication for most of the organizations in Canada. The prices are determined by Canada's Patented Medicine Prices Review Board and since drugstores pay less for many medications, they are in a position to sell them for less.

In the Canadian provinces of Ontario and Quebec, the drug formulary puts restrictions on the use of new and expensive medicines. The government provides the bulk of drugs to the higher users of these medicines, pharmaceutical companies generally negotiate and lower the prices of their products to get them on the formulary list.

The liability costs of Canadian pharmaceutical companies are lower than the US drug companies. The awards and damages in suits filed against Canadian healthcare providers or drug companies are in general a lot lower than in the US.

The standard of living in Canada is a bit lower than in the US and this affects the prices set by the Canadian drug companies.

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