Why are Drugs from Canada Cheaper ?

There are several reasons why drugs from Canada are cheaper as compare to USA.

Why Are Drugs from Canada Cheaper

Prescription medicines are too much costly in the USA but if you buy drugs from Canada they are much cheaper. You will get near about 30-80% discount. One of the examples is Lipitor (atorvastatin), is a medicine used to lower cholesterol level was sold at $86 for 30 days’ supply in the USA whereas in Canada it will cost you $51.

There are many reasons why drugs from Canada are cheaper and process is very complex, still I will explain you a few facts about this.

One of the main reasons is Canadian government regulates prescription drug prices. The governing body of Canada, Patented Medicine Prices Review Board (PMPRB). This body has extended patent protection for prescription medicines in late 19-80s. Because of this wholesale price of drugs is much lower.

Another reason is Canadian provinces, like Quebec and Ontario has their own formulary. This puts extra pressure on the use of new and expensive medicines. They have the power to negotiate prices directly with pharmaceutical companies and they have to agree with Canadian provinces.

According to one survey US drug companies spent $4.8 billion every year on advertising prescription medicines. Only USA and New Zealand are two countries allowing direct to consumer advertising for prescription medicines also. Due to high Medicines expenditure on advertising, price of product increases by multiple folds.

USA is a worldwide leader in research and development of innovative medicines. Many private organizations are investing huge amount of money in research and development. Because of this they are selling drugs at high prices to recover from huge investment. Government does not have control on this investment and pricing.

Another most important factor is standard of living between these two nations. On an average Americans’ standard of living is higher by 20-30% as compared to Canadian standard of living. This affects the cost of brand medicine set by pharmaceutical companies. Many Canadians cannot pay this high price so drug companies have to sell at a lower price in Canada.

Canadian drug companies can sell drugs at a lower cost because the production cost is much lower as compared to USA. As a result they still can make good profit. Another interesting reason is Americans most often suing on health care provider or drug companies because of any reason and cost is much higher. But Canadians very rarely sue on drug companies and even if they sue cost is not too much.  

Although Americans are paying a high price, the major advantage they can access newest treatments very well as compared to Canadians.