Rising healthcare costs in the United States are rising up on the national agenda. As a result, more and more of us are looking towards our northern neighbors.
By virtually every measure, drug prices are cheaper in Canada than in the US by a considerable margin.
At a point where one in four Americans now say that they struggle to afford medication, virtually no Canadians report the same problem.
So why are prescription drugs cheaper in Canada, but not in the United States? Read on to find out.
Why Are Prescription Drugs Cheaper in Canada When the Drug Companies Are the Same?
One of the main reasons that cheap prescription drugs are the norm in Canada is because of the strong regulations that set limits on prices. Even cheap pet prescription drugs are affordable because of an entity known as the Patented Medicine Prices Review Board (PMPRB).
This national-level board of experts guarantees cheap prescription drugs across Canada. They work directly with pharmaceutical companies to negotiate prices.
If they deem a drug price to be unaffordable for consumers, they will forbid it from being allowed to enter the Canadian market. The board even goes as far as to check the average pricing for the drug in question in different countries around the world. This is to ensure that Canadians are not being price gouged.
This same price control mechanism can, however, work to the benefit of American consumers. US consumers looking to buy drugs from Canada can check prescription drug prices across the border. This way, they can see if they can also take advantage of Canadian price controls.
Simply ordering certain drugs from across the border can allow Americans to access prescription drugs for cheap. This is all thanks to Canadian regulations.
A Healthcare System That is Not Focused on Profit
The Patented Medicine Prices Review Board is largely responsible for cheap prescription drugs from Canada. But that’s not the whole story. The entire structure and ethos of the Canadian healthcare system have the consumer in mind, rather than corporate profits.
A full 86.2% of Canadians report that they would much rather pay higher taxes to ensure universal healthcare for all that ever switch to a for-profit system. In Canada, drug manufacturers only negotiate prices with the government.
Insurance providers and lobbyists do not play any role in the setting of prices and are forbidden by law to do so. The government’s role in negotiations is to ensure universal access to a drug on their nationalized healthcare system.
In the US, insurance companies, pharma companies, and lobbyists all play a role in setting prices. They will place business considerations at the forefront.
Lobbying on behalf of drug and insurance companies in the US plays a major role in the current spiraling cost of drug prices. In Canada, such arrangements are simply not able to occur.
Will US Drug Prices Fall?
The answer to why are prescription drugs cheaper in Canada is, in fact, rather straightforward. Consumers come first in Canada’s drug market, and the government fights on their behalf.
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