The Los Angeles Times uncovered a price-gouging scam on our nation’s pharmaceutical consumers. Americans, eager to acquire price controlled brand-name drugs from Canada, have been filling there generic prescriptions up North as well. They’ve been overpaying by as much as 78 percent compared to what they could have purchased at the corner drugstore, according to a study by the Fraser Institute, on which the story relies. Canada’s complicated price control system, which also controls competition and provides an effective floor as well as a ceiling for prices, makes generic drugs a bad deal in Canada. The Fraser Institute study pegs the cost difference at 78 percent for the 100 most popular generic drugs. It has long been known among serious researchers, as opposed to bus hopping activists and politicians, that it’s unclear if the basket of drugs Americans actually purchase, due to an abundance of generics, costs more or less in the United States than it would in Canada.
One thing is clear: It’s the fierce competition of free market in the United States that produces both the innovation necessary for the cutting-edge drugs that Canada’s government price controls and the low, low prices for generic drugs that have lost patent protection.
Expensive Imports
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
