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Drug Plans Responsible for Higher Prices

Canadians are paying up to ninety percent more for generic Canada drugs than citizens of the United States are, according to a new study by the Fraser Institute. The Institute claims that the reason for the inflated prices is entirely down to Canada drug plans run by the government which alter retail prices and fail to successfully pass discounts onto the consumer at Canadian pharmacies.

Mark Rovere, the Health Policy Studies Associate Director at Fraser Institute, says that if the government removed many of their current drug plan policies, the consumer would end up a lot better off buying them at Canadian pharmacies. “(It’s a) very competitive market place in the US, which has extremely pushed the prices of generic (drugs) down,” he says. “(It) suggests that Canada would be much better off if the Canadian government removed many of these policies… (With) the majority of public drug programs in Canada, the government reimburses the pharmacy directly, as opposed to reimbursing the patient or consumer. There’s no incentive for consumers to shop around for lower cost alternatives. Therefore, there isn’t an incentive for the actual retail pharmacy to compete on prices.”

On the other hand, however, the Fraser Institute study did find some light at the end of the tunnel, as despite the massive discrepancy in prices for generic drugs between Canada and the United States, things are improving – as back in 2007, Canadian generic drug prices were up to a hundred and seventeen percent higher than their US equivalents.

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