NCPA - National Center for Policy Analysis

GENERIC DRUGS ARE SIGNIFICANTLY MORE EXPENSIVE IN CANADA THAN IN THE UNITED STATES

March 19, 2009

Are there differences between the prices for prescription drugs that are most important to Canadian seniors (aged 60 and older) and their counterparts in the United States?  According to the Fraser Institute, the answer is: Yes.

In 2007, Canadian seniors paid more than twice as much as their American counterparts paid for identical generic drugs, says Fraser.  Why?  The high price of generic medicines in Canada is the result of various ill-conceived public policies that shield retail pharmacies and generic drug companies from competitive market forces. 

Because of these policies, Canadians, in general, and seniors, in particular, are paying too much for generic drugs, says Fraser:

  • For seniors specifically, their more commonly prescribed generics cost101 percent more for identical drugs than in the United States.
  • In contrast, the less-often prescribed brand-name drugs averaged 57 percent lower in Canada than in the United States.
  • A similar analysis in 2006 found that, on average, generic prescriptions drugs cost 116 percent more and brand-name drugs 52 percent less.
  • Recent years have seen the price of generics rise and the price brand-names drop; in 2003, prices for identical brand-name drugs averaged 36 percent lower than United States prices, identical generics priced at only 64 percent higher.

The results of the Fraser study find that prices for senior's generic drugs are significantly higher than American prices for identical drugs.  These prices uniquely affect seniors because doctors are more likely to prescribe generics than brand-name drugs.

Further, the results serve to demonstrate that Canadian policies toward health care and prescriptions are not effective, says Fraser.

Source: Brett J. Skinner and Mark Rovere, "High costs for seniors: Generic drugs significantly more expensive in Canada than in the US," Fraser Forum, February 2009.

 

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