Published Online: Saturday, September 1, 2007

Canadian patients seeking to save money may soon be shopping at US-based pharmacies. A new study from researchers at the Fraser Institute in Vancouver, British Columbia, found that, on average, Canadians are paying twice as much as US residents for generic drugs. Although Canadian prices for brand name prescription drugs are averaging 51% lower than US prices, the study found that, for generics, patients north of the border pay 115% more than those in the United States.

?Canadians pay more for generic drugs because government policies shield generic-drug companies and pharmacy retailers from normal market forces that would naturally reduce prices,? the researchers said. This study estimates that, in 2006 alone, ?misguided government policies cost Canadians between $2.5 billion and $6.6 billion in unnecessary spending due to inflated prices for generic drugs.?

The researchers cited a number of specific Canadian government policies that contribute to higher generic-drug prices, including the fact that ?drug programs direct public reimbursement of prescriptions to pharmacies instead of consumers??a practice that ?insulates consumers from the cost, thereby removing incentives for comparative shopping that would put downward pressure on prices.?

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