Why Are Drug Prices Higher in US than Canada

Drugs prices are higher in the USA than they are in Canada because there are no price controls on Rx medication in the US like there is in Canada. Health Canada is the Canadian equivalent of the US FDA, and when it comes to the costs connected to prescription meds they take much more of a ‘hands-on’ approach to limiting the price of Rx drugs in Canada. In the US it’s very much hands-off with the FDA and allowing it to be entirely free market means pharmaceutical manufacturers are free to set prices for their drugs as they please.

It's important to remember that it is often hundred of thousands of dollars that go into the R&D (research and development) of the drugs that tend to be the most expensive when it comes to OOP (out-of-pocket) costs for people when they pay for the medication at their pharmacy. That doesn’t appease anyone when it comes to their understanding of why are drug prices higher in US than Canada though. Plus, there’s plenty more than just the lack of price caps on drugs behind the high drug prices in the US.

Another factor that doesn’t get talked about as much is all of the mouths that need to be fed in the pharma industry in the states. Using that analogy here is very vague we’ll admit, but what it means is that there are many pharmacy middlemen in America who all add to the price of prescription drugs as they go through them between the manufacturers and the wholesaler or wholesaler and the pharmacy at the end of the chain. Not surprisingly there’s even more to why are drug prices higher in US than Canada, and it’s a reality that is not going to change anytime soon.

Advertising Adding to It

Adding to why are drug prices higher in US than Canada is the fact that those same big pharma manufacturers located in the USA spend huge amount of money on D2C (direct-to-consumer) advertising and if you’ve spent any extended period of time in the States you’ve likely seen how much frequent it is to see ads on TV and elsewhere promoting Rx medications. That in itself is not a bad thing, but the cost of that advertising is rolled into the high prices paid for the drugs by people at the pharmacies.

The net part of why are drug prices higher in the US than Canada is also rolled into the prices Americans pay for expensive Rx medication. You may have noticed how ready and willing Americans are to sue each other over absolutely anything and everything, and pharma manufacturers are facing civil litigation fairly often. Legal protection is another part of why you pay more for Rx drugs in America.