Generic drugs often cheaper in U.S.

WASHINGTON – Many U.S. consumers have been buying generic drugs from Canada, not realizing that generics – unlike brand-name medications – are usually quite a bit less expensive at home.

U.S. consumers might be wasting more than $100 million a year on Canadian generics, according to one Canadian analyst, although no firm figures exist on how much Americans are overpaying.

U.S. residents know that brand-name drugs are less expensive in Canada because the government controls prices there. But many don’t realize that Canadian policies have the opposite effect on prices for generic drugs.

Earlier this year, the institute released a study of the 100 top-selling generic drugs. It found that Canadian prices were, on average, 78 percent higher than in the United States.

The study, by Brett Skinner, director of pharmaceutical and health policy research for the Fraser Institute in Toronto, estimated that Canadians could save $2 billion to $5 billion annually if their generic market was as competitive as it is here. The study accounted for exchange rate differences, and the potential savings are in Canadian dollars.

Canadian drug-approval regulations make it difficult for foreign generic competitors to enter the market, Skinner said, and the reimbursement policies of Canada’s provincial governments act to keep prices artificially high.