Prescription Drugs:

Companies Typically Charge More in the United States Than in Canada

T-HRD-93-5: Published: Feb 22, 1993. Publicly Released: Feb 22, 1993.

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GAO discussed prescription drug prices in the United States and Canada, focusing on: (1) the different prices manufacturers charge for the same drugs in the two countries; and (2) the factors associated with those differences. GAO noted that: (1) in general, manufacturers charged U.S. wholesalers more than Canadian wholesalers for identical drugs; (2) U.S. drug prices ranged from 44 percent lower to 967 percent higher than Canadian prices; (3) research, production, distribution, and marketing costs in the two countries did not substantially affect price differences; (4) prices were generally lower in Canada because Canadian regulations tended to restrain prices on patented drugs, and provincial benefit plans paid for drugs for large population segments at negotiated prices; and (5) the impact of federal drug price regulation to reduce or restrain drug prices in the United States may be significantly different from Canada's experience, since the U.S. market is ten times the size of the Canadian market.

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