Seniors and Drug Prices in Canada and the United States, 2005

This report compares Canada-US price differences for the prescription drugs that are most important to Canadian seniors (aged 60 and older). This report analyzes prices for the drugs most commonly prescribed to Canadian seniors in 2007, and compares Canadian and American prices for brand name and generic prescription drugs separately.Previous research comparing drug prices in Canada and the United States confirmed that Canadian prices for brand-name drugs are lower than American prices but that generic drug prices are much higher in Canada. The earlier studies looked at drug prices across the entire consumer market. This study looks only at those drugs that are most important to consumers 65 years of age and over and finds that seniors also pay higher prices for generic drugs and lower prices for brand-name drugs in Canada than they do in the United States. In fact, the data show that Canadian seniors pay 64% more on average than Americans for generic versions of drugs that are among the most recommended by physicians for patients 65 years and older. Meanwhile, the prices for brand-name drugs most recommended for seniors are 36% lower on average in Canada than in the United States.

Because average Canadian incomes are lower than US incomes, it is not surprising that Canadian seniors pay less for branded drugs than Americans. However, higher generic drug prices are very surprising and indicate that Canadian seniors are paying too much for generic drugs. The lack of a competitive market for pharmaceuticals in Canada is the cause of inflated prices for generic drugs north of the border. As documented and explained in previous research, Canadian government policies have given special advantages to generic companies that have allowed them to establish individual product monopolies on retail pharmacy shelves through exclusive distribution agreements. This study confirms that the inflation of prices for generic drugs discovered by previous research applies just as much to seniors as it does to the rest of the consumer population in Canada.