The
Economic Freedom
Network

Prescription Drug Prices in Canada and the United States --
Part 1: A Comparative Survey

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Findings

Overall findings

The results of the simple analysis for each drug are attached as Appendix 2 (wholesale) and Appendix 3 (retail), ranked by the percentage Canadian discount or premium. The calculation of the weighted average for each sample is shown in Appendix 4 (wholesale) and Appendix 5 (retail), where the samples are ranked according to their contribution to the weighted average. The findings are summarized in table 5.

Table 5: Analysis of Canadian (Discount) or Premium

	Median	Simple Average	Weighted Average	Range	Standard Deviation	Number of drugs more expensive in Canada
Wholesale	(45%)	(43%)	(42%)	(98%) to 350%	68%	2
Retail	(46%)	(24%)	(28%)	(95%) to 238%	76%	7

Note to table 5: Figures in parentheses indicate Canadian discount; figures without parentheses indicate Canadian premium.

The findings confirm that prescription drugs are cheaper in Canada than the United States. However, the most striking finding from this simple analysis is that there is a wide range of differences between the price of drugs in Canada and that in the United States. As well, we see that a number of drugs are more expensive in Canada than the United States, especially at the retail level.

Findings by Pharmacologic-
Therapeutic Classification

Table 6 (wholesale) and table 7 (retail) categorize the observations with respect to pharmacologic-therapeutic classification.

Table 6: Canadian (Discount) or Premium by Pharmacologic-Therapeutic Classification (Wholesale)

45 drugs	AU 0 drugs	BL 1 drug	CV 15 drugs	EL 3 drugs	GI 2 drugs	HO 5 drugs	IN 8 drugs	NS 11 drugs
Median	N/A	(68%)	(27%)	(92%)	(61%)	(81%)	(41%)	(49%)
Simple Average	N/A	N/A	(4%)	(91%)	(61%)	(82%)	(51%)	(54%)
Weighted Average	N/A	N/A	16%	(19%)	(61%)	(82%)	(50%)	(62%)
Range	N/A	N/A	(64%) to 350%	(95%) to (85%)	(68%) to (53%)	(94%) to (73%)	(98%) to (28%)	(96%) to 58%
Standard Dev.	N/A	N/A	99%	5%	10%	8%	24%	45%
Number of drugs priced higher in Canada	0	0	1	0	0	0	0	1

Table 7: Canadian (Discount) Premium by Pharmacologic-Therapeutic Classification (Retail)

45 drugs	AU 1 drug	BL 1 drug	CV 15 drugs	EL 3 drugs	GI 3 drugs	HO 5 drugs	IN 7 drugs	NS 10 drugs
Median	109%	(58%)	(30%)	(61%)	(56%)	(74%)	(53%)	(47%)
Simple Average	N/A	N/A	(1%)	(63%)	0%	(73%)	(17%)	(43%)
Weighted Average	N/A	N/A	9%	(64%)	(4%)	(75%)	(28%)	(43%)
Range	N/A	N/A	(51%) to 238%	(66%) to (60%)	(59%) to 115%	(80%) to (60%)	(95%) to 212%	(84%) to 20%
Standard Dev.	N/A	N/A	87%	3%	100%	6%	105%	34%
Number of drugs priced higher in Canada	1	0	2	0	1	0	1	2

Note to tables 6 and 7: Figures in parentheses indicate Canadian discount; figures without parentheses indicate Canadian premium.

All pharmacologic-therapeutic classes (except the cardiovascular drugs) have lower prices in Canada than the United States at the wholesale level. Except for hormones and substitutes, all classes demonstrate large ranges of price differences at both wholesale and retail levels. However, the sample sizes for many of the classes is very small, so statistical measures must not be considered definitive. At retail prices, the cardiovascular, gastrointestinal, anti-infective, and central nervous system subsets had at least one member whose Canadian price was higher. As well, the lone autonomic agent had a higher retail price in Canada. The results for the cardiovascular drugs are skewed because of one heavily weighted drug, Atenolol, which is vastly more expensive in Canada than in the United States.

Generic Drugs versus
Brand-Name Drugs

As shown in table 5, two drugs had higher wholesale prices in Canada than the United States, and seven had higher retail prices. All of these drugs were generic drugs. Indeed, these drugs comprise over one-third of the generics in the retail set.

Table 8 (wholesale) and table 9 (retail) show the simple statistical analysis of the samples, broken down by intellectual property classification.

Table 8: Canadian (Discount) or Premium by Intellectual Property Classification (Wholesale)

45 drugs	Exclusive 18 drugs	Branded only 7 drugs	Generic 20 drugs
Median	(39%)	(62%)	(74%)
Simple Average	(40%)	(56%)	(41%)
Weighted Average	(45%)	(63%)	(33%)
Range	(79%) to (2%)	(85%) to (28%)	(98%) to 350%
Standard Deviation	21%	20%	100%
Number of drugs priced higher in Canada	0	0	2

Table 9: Canadian (Discount) or Premium by Intellectual Property Classification (Retail)

45 drugs	Exclusive 20 drugs	Branded only 6 drugs	Generic 19 drugs
Median	(47%)	(64%)	(41%)
Simple Average	(46%)	(61%)	11%
Weighted Average	(35%)	(65%)	7%
Range	(79%) to (16%)	(80%) to (40%)	(95%) to 238%
Standard Deviation	17%	16%	106%
Number of drugs priced higher in Canada	0	0	7

Note to tables 8 and 9: Figures in parentheses indicate Canadian discount; figures without parentheses indicate Canadian premium.

All subsets but one are cheaper in Canada. Generic drugs, however, appear to be more expensive on average at the retail level. For both wholesale and retail prices, there are significant differences between subsets. The subset with the largest average discount is the branded-only subset. Canadian exclusive drugs enjoy less of a discount and generic drugs perhaps not at all. However, the range of generic price differences is much larger than it is for the other subsets. This wide dispersion of generic price differences is noteworthy, especially since the patented and branded-only subsets show almost the same, much smaller, variances in price differences. This difference in results between the wholesale and retail findings for generics is not easily explained. As noted above, retail prices are less prone to error from the collection of data, so the different findings may be due to inaccuracy in the wholesale prices.