Why Are Pharmaceuticals Cheaper in Canada?

Photo: Rob Byron/ Shutterstock.

That’s a great question. And one I actually pondered myself when I was trying to fill the prescription for my son’s strep throat. You know how much a 10-day supply cost me? $200! And that was with insurance. (I debated for a moment letting him suffer through it ... only kidding!)

Many of us have heard that pharmaceuticals are cheaper once you cross the border (the northern border, that is). And in many cases, it’s all too true. I know a few people who do all their pharmaceutical shopping online at Canadian pharmacies because, even with the cost of shipping, the prices are so much lower than in the United States. But why is that?

The reason behind the cost difference lies in two important words — price controls. In Canada, the government has set up the Patented Medicine Prices Review Board to ensure that pharmaceutical prices do not get excessive. They even have a law that says that the price of a breakthrough medication, the first of its kind, cannot exceed its median price around the world. A great example is the new cancer drug, Campath, which sells for $600 to $700 in countries like Sweden, Britain and France. Its U.S. price? A whopping $2,400. Now that’s a hard pill to swallow (well, not really, since Campath is given by intravenous injection, but you get the idea).

The United States is the only industrialized country that does not use price controls for pharmaceuticals. Why not? Some say that price controls limit drug companies’ abilities to innovate and also force consumers to choose from a limited supply of medications. In fact, in 2008, Pfizer said that having price controls on medications would reduce life spans. And not everyone in Canada agrees that they’ve written the holy grail of prescription drug processes either. William McArthur, a doctor in British Columbia, maintains that the Canadian government’s price controls and lengthy drug approval process can sometimes stifle a patient’s ability to get treated correctly. Still, many drugs available in the U.S. are, in fact, available for less money through Canadian channels.

So why aren’t we all running across the border to purchase our pharmaceuticals? Well, for one, it’s illegal. (You read that right.) The FDA says that buying drugs from other countries (purchased online or in person) leaves you open to all sorts of risks — expired meds, medication that is not the right strength, even counterfeit drugs. But some will argue that Canadian pharmacies (legit ones, that is, that have a pharmacy license number on their website) have to submit to the same rigorous drug regulation that pharmaceuticals undergo here in the U.S.

Perhaps because so many people will do it anyway, the FDA has made it possible for the U.S. consumer to import drugs from Canada without being prosecuted, as long as a number of stipulations are met (though it’s highly unlikely that the average Joe will meet them). To verify a pharmacy’s legitimacy, you can visit the VIPPS website or Canadian International Pharmacy Association’s website.