Pharmaceutical drugs prices - Why do Canadians get a much better deal than we do?

Are US insurance companies and hospitals etc. just lousy bargainers? Why specifically do the Canadians get such a good deal that US pharmacies can import and re-sell the drugs and still make money?

Senate OKs buying Canadian drugs - Vote may cut costs for U.S. pharmacists; obstacles remain

This question has been asked many times before if you check the archives. Canada is a different country and I’d guess the price difference has a lot to do with their socialized medicine system. That said, it’s also what the drug companies have established as the ideal price to maximize sales for their drug.

You think the drugs are a bargain in Canada, you should see some of the deals we get here in San Diego when we go across the border and buy in Tijuana. It is called the ‘grey market’.

You are even allowed to do it legally, as long as you have a US perscription for the drug (they don’t care if you have one in Mexico unless you are trying to get pain killers or other addictive medication).

It’s simple. The pharmaceutical companies use the US to pay for their R&D. We are the worlds “richest” country you know.

Kudos to the Senate. But it will die a horrible death in commitee. Thank you house pubbies.

Countries with public healthcare system tends to haggle with pharmaceutical companies about the price of their drugs. I’m not sure if it’s the main reason for the drug’s price being lower in Canada as compared to the US, but it probably plays a part.

And concerning US insurance companies and hospitals not being good bargainers : I doubt an hospital would be able to argue over the price of drugs with a pharmaceutical company. An hospital would be only one buyer amongst many. Insurance companies probably could (and I would suspect they actually do so), but contrarily to countries with socialized healthcare, there are several insurance companies, while in such countries, there’s essentially only one potential buyer : the government.
It could for instance decice that a costly drug will only be prescribed/distributed by specialists in hospitals to limit unecessary prescription (say, like for this very costly drug which is the only one effective for people suffering from chronical and very violent headaches, but could end up being prescribed and reimbursed/paid for by the public healthcare system to people who just have your average ordinary headache). The pharmaceutical company might prefer to lower the drug’s price to avoid this, expecting to make more money this way.

Or if a company makes a lot of money with a well-known but not effective drug (or less effective than others, more recent drugs), and the government intends to stop reimbursing it, the pharmaceutical company could bargain and offer to lower the price of this drug or of other drugs which are commercially less important.

These were two examples out of my head, but with a public healthcare system, the government (or the organization in charge of the healthcare system, if it’s not the governement directly) has a lot of potential leverage, and can exert a lot of pressure on drug companies.
Also, but this wouldn’t apply to develloped countries, the company can chose to sell its drugs for a lower price in a given country because said country is quite poor, and, facing the possissibility that people won’t buy the drug because they plainly can’t afford it, it expects to make more money by selling more drugs for a lower price

Change the product to something else, let’s say muffins.

You make really good muffins, and have no problem selling them locally for one dollar each.

You decide to expand your business to the neighboring town, but soon realise that your product is not selling at the same price.

What do you do?

Dismiss that new market and move on, or adjust your price accordingly and sign up new customers…

The pharmaceutical companies know which choice to make.

Whether the proposed bill is a good idea is a debate (a great one, if you get my meaning) that we will not be having in this forum.

Aww, crap. That was evil, killjoy me who said that, of course, not my sweet innocent girlfriend. Carry on.