Summary

Drug manufacturers typically charge wholesalers more in the United States than in Canada. In studying prices for 121 widely dispensed drugs sold in both countries, GAO found that these drugs would cost 32 percent more in the United States than in Canada if a common prescription of each drug were purchased at its factory price. Differences between U.S. and Canadian drug prices can be explained largely by two factors that are unique to Canada: (1) federal regulations designed to restrain prices on patented drugs and (2) provincial drug benefit plans that pay for drugs for a large segment of the population. Differences in costs, whether of research, production, or distribution, are not a major factor in explaining differences in drug manufacturers' prices.