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Drugs prices are higher in the USA as a result of the US not having price controls on Rx medication like there are in Canada. The US FDA’s equivalent in Canada is Health Canada, and as it relates to the costs connected to prescription meds they are much more proactive in limiting the price of Rx drugs in Canada. In the US it’s the opposite and the FDA allows it to be entirely free market when it comes to pricing. Pharmaceutical manufacturers are free to set prices for their drugs as they please.
Let’s keep in mind that hundreds of thousands of dollars go into the R&D (research and development) of the drugs that are the priciest when it comes to OOP (out-of-pocket) costs for people paying for the medication at their pharmacy. That’s no consolation for anyone struggling to understand why are drug prices higher in US than Canada though. And you’ll find there’s plenty more than just the lack of price caps on drugs factoring into high drug prices in the US.
Plus, there are plenty of people looking for their cut in the pharma industry in the states. What we mean by cut is that there are many pharmacy middlemen in America who bump up 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. We can move on now to the fact there’s even more to why are drug prices higher in US than Canada. Unfortunately, this isn’t something that is going to change anytime soon.
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.
Another contributor into why are drug prices higher in the US than Canada is also part of the reason Americans pay more for expensive Rx medication. There’s a thousand examples all the time of how ready and willing Americans are to sue each other at the drop of a hat, and pharma manufacturers are forced to defend themselves in civil litigation fairly often. Legal protection is another part of why you pay more for Rx drugs in America.