Canada's Drug Price Paradox 2007
Canadians pay much more than Americans for drugs because government policies in Canada distort the market for prescription medicines. Canadian government policies insulate generic drug companies and pharmacy retailers from normal market forces that would put downward pressure on prices for generic drugs.
This study compares prices for generic and brand-name drugs in Canada and the United States for the year 2006. Differences between the economics and public policy of the two countries theoretically explain the observed variation in prices for identical drugs. This study estimates the effect on total retail-drug expenditures from price distortions caused by Canadian public policies.