Los Angeles Times Examines Cost of Canadian Generic Prescription Drugs

The Los Angeles Times on Tuesday examined the prices of generic prescription drugs in Canada and the U.S. Various research shows that, while brand-name prescription drugs are usually cheaper in Canada than in the U.S., generics are usually more expensive in Canada than in the U.S., the Times reports. An HHS study of five popular generic medicines found that U.S. prices for generic drugs were about 32% lower than Canadian prices. In addition, a study released earlier this year by the Fraser Institute -- a Toronto-based public policy organization that opposes price controls on brand-name drugs -- found that Canadian prices were an average of 78% higher than U.S. prices for the 100 top-selling generic drugs and that Canadians could save $2 billion to $5 billion annually if the Canadian generic market was as competitive as the one in the U.S.

Brett Skinner, director of pharmaceutical and health policy research for the Fraser Institute, said U.S. generics are generally cheaper than Canadian generics because there is more competition in the generics market in the U.S. According to Skinner, it is difficult for foreign generic competitors to enter the Canadian market because of government drug-approval regulations. He said, "We have very few companies competing for sales -- two companies take up nearly 70% of the market for the top 100 drugs." The reimbursement policies in Canada's provinces also inflate prices, Skinner said. Many U.S. consumers are unaware that generics are more expensive in Canada, and they might be spending more than $100 million annually on Canadian generic drugs, Skinner estimates.

Tom McGinnis, director of pharmacy services for FDA, said, "We have a feeling that there is a lot of misconception that everything outside the United States is cheaper" (Alonso-Zaldivar, Los Angeles Times, 8/9).