Why is it that Canada, with its socialized health care, has such high drug prices?

[CTyankee]

I was confronted with this by someone arguing against health care that is provided to their citizens by every other nation in the world. I did not know this about Canada.

I think this guy was coached on what to say by a RWinger who wanted to "prove" how bad such a health care system can be.

For some reason, I was not informed about Canada's system of drug provision to its people. I thought they had what Germany, France, Italy etc all had.

First, why is this the case with Canada and what is their government doing about it?

I want to know what to tell this guy when I see him again in a couple of weeks...

[Maeve]

1. Umm...they have lower prices than we do

https://www.ft.com/content/e92dbf94-d9a2-11e9-8f9b-77216ebe1f17

Quinn Nystrom is carrying the thing that saves her life in two large brown bags. The 32-year-old from Minnesota is one of a busload of diabetics who have made the journey from the US to a pharmacy in Canada to stock up on vital supplies of the drug insulin. Only minutes’ drive from the border, they are paying a tenth of what they would at home.

Outside the pharmacy in Windsor, Ontario, a crowd has gathered to show solidarity. Nystrom, who is wearing a grey T-shirt bearing the words “Insulin is a human right”, launches into an impromptu speech. The diabetes activist seethes as she tells them how, as a consequence of soaring drug prices, one in four American diabetics now rations their use of insulin.

“We know that our purchase today in this Canadian pharmacy was not a charity. Right?” she tells the onlookers. “We know that [the drugmakers] made a profit, though far less profit than they do from Americans. But what they’re doing to Americans is price-gouging us and they are holding us hostage. And people are dying. People are being forced to go to emergency rooms. People are having their legs amputated. They are going blind. They are having heart disease, liver damage. When does it stop?”

[politicaljunkie41910]

13. The reason drug prices are so high is because companies spend a lot of money in research before a

drug ever gets to market. Many drugs never make it to market though pharmaceutical companies spend a lot of money on research and development; so none of the cost involved in research and development on those products is never recouped. Also the people doing the research and development are doctors and scientists, and they get paid good money for doing the research and they don't come cheap.

So once a new drug makes it to market, drug companies have an exclusive right to market those drugs for a limited amount of time. I believe that timeline is 7 years in the U.S. So the drug companies are trying to recoup years and years of research costs on their successful drugs which do make it to market, in that timeline. The cost of any particular drug that makes it to market, also includes the costs expended by the pharmaceutical companies on those drugs that never make it to market. It's part of their overhead costs and it gets passed on to the costs of the other successful drugs.

In the US, once that 7 year exclusive right for the Drug Maker/Inventor to market it's product ends, the drug becomes a 'generic' drug which all pharmaceutical companies in the U.S. can now manufacture. I don't know what the rules are in other countries, but this is my understanding of how it works in the U.S.

[wasupaloopa]

16. You forgot advertising.

Once research costs are recouped and the patent expires than generics with lower cost appear.

[octoberlib]

17. My cousin was a VP for a big pharma company and they spent less than 12% of their

budget on research.

[politicaljunkie41910]

21. So what did they spend the other 88% on?

I'm not trying to make light of this topic, my original response was just a quick response to try and address an important topic. I have a lot of family members in the medical field (i.e. doctors, nurses, dentists, and a whole lot of X-Ray techs. etc) and I am an Accountant and I have a son who is a Pharmaceutical Rep. This is only natural since a lot of people associate with people they work with. We have these conversations all the time particularly when we have gatherings because someone usually has someone who is sick and need some medication for a sick child or parent, or who can't afford to go to see a doctor, or who doesn't have insurance, so the topic comes up often. Someone in the crowd (of all these medical professionals usually has some samples, at home or at their office) because someone tells them they will get back to them, so the discussion almost always comes up.

I can't comment definitively on your 12% amount, so I'll take you at your cousin' word; though as an accountant, I would say that for most businesses, their personnel (and personnel related expenses i.e. salaries, payroll taxes, insurance, etc) are usually one of their largest cost items, if not the largest followed by the cost of facilities, equipment, supplies, utilities, etc.

[politicaljunkie41910]

29. I'm not trying to be difficult. I'm trying to understand this from someone who knows the business

better than I do. As I stated earlier, I pick up a lot from family members many of whom are in the medical field, and their friends and associates are also in the medical fields and these discussions come up all the time between friends and family members who are also in various medical fields during conversations at holidays and birthday get togethers. Obviously, the people who are in the medical fields, who know more than I do about the business, and discuss this on a level that I can relate to as an Accountant since R&D is something I can relate to as part of my Accounting profession; although I acknowledge that in my attempt to simplify the discussion based on things I had been told by people in the business previously, some of my statements weren't 100% accurate.

[Blue_true]

24. Companies that do R&D get liberal leeway for writing off R&D costs.

R&D costs for a failed drug are not fully or in many cases partially supported by a successful drug's sales.

Drug companies, like any other company that files a patent get 20 years protection. Drug companies and other companies that require FDA approval have a somewhat more complicated path due to the reality that approval can take many years. The Hatch-Waxman Act was passed in 1984 to give companies that require FDA approval up to 5 additional years of patent protection. 3 Additional years can be gained if a drug is found to have a second beneficial impact, say that a heart drug was found to retard the onset of Alzheimer's disease and get approval for sale for that reason, 3 years get tacked onto the original patent duration of 20 years + any Hatch-Waxman Act years.

If a drug shows very promising results during early clinical trials, and lots of people can be helped by it's approval, the FDA will often expedite the approval process, this can result in a company getting all or most of the 20 year patent exclusivity that it applied for when filing the patent, as long as the company pays a maintenance fee at 3.5 years, 7.5 years and 11.5 years after the patent was granted.

Drugs that sell for absorbidant prices here in the USA sell for much less in Canada and other places, even though the very same company owns exclusive rights for the drug. This last point is why there is so much anger over drug prices here in the USA. If what you claimed was in fact true, prices for critical and vast need drugs would be more uniform worldwide, they are not, even for drugs that are made and sold under exclusive rights.

[kacekwl]

25. That's the "reason" the drug companies give but

A lot of research is done out of house by universities . I'm quite sure that their investment is recouped way before it goes to generic. Which by the way they are buying up generic companies to stall going generic by making slight changes to drugs to extend the patent. It a scam anyway you look at it.

[rampartc]

2. americans travel to canada to fill their prescriptions.

if the prices are high compared to mexico or panama, I am told that quality assurance is better.

[onetexan]

10. That's correct. Very few drugs are actually higher in Canada. The majority are lower, hence why

American seniors travel north to get lower priced prescriptions.

[Lochloosa]

3. At least they are trying to do something about it.

https://www.reuters.com/article/us-canada-budget-pharmaceuticals/canada-to-create-national-drug-agency-to-help-cut-cost-of-medicines-idUSKCN1R02LW

[Bev54]

4. It is up for debate right now

We are in the midst of an election and we are hoping that if we stay with a liberal government we will get drug coverage. It is not that our drugs are anywhere near the cost of drugs in the US, they are not, many Americans come to Canada to get their prescription drugs at a lower price. It is the so called new trade agreement that Trump wanted our drug prices to remain higher. We do not have a full system like that of Germany but we would like it and hope to get it, here is the thing though, we are so much closer to it than the US is, we can always improve but we sure as hell don't want to go the way of a US system.

[sinkingfeeling]

5. Really? Is that why bus loads of US citizen go to Canada to buy drugs?

Prescription drugs run 50-70% cheaper in Canada.

https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwiqycDV0YjlAhUFLa0KHXt-ACsQzPwBegQIARAC&url=https%3A%2F%2Fwww.pharmacychecker.com%2Faskpc%2Fis-medicine-in-canada-cheaper%2F&psig=AOvVaw3pOL3CPHBVaga5VZkYV-Gs&ust=1570485804969061

[Make7]

6. A Trump Administration plan to lower drug costs for Americans is to import them from Canada.

...

Azar announced a preliminary plan Wednesday to allow Americans to import certain lower-cost drugs from Canada. Insulin, biological drugs, controlled substances and intravenous drugs would not be included.

The plan relies on states to come up with proposals for safe importation and submit them for federal approval.

Under a second option, manufacturers could import versions of any FDA-approved drugs from foreign countries — including insulin — and sell them at a lower cost than the same U.S. versions. This appears to be a way drugmakers could avoid some of the contracts they have with drug middlemen, known as pharmacy benefit managers.

“The administration has reason to believe that manufacturers might use this pathway as an opportunity to offer Americans lower cost versions of their own drugs,” according to the plan announced Wednesday. “In recent years, multiple manufacturers have stated (either publicly or in statements to the administration) that they wanted to offer lower cost versions but could not readily do so because they were locked into contracts with other parties in the supply chain.”

The announcement marked the latest shift by the Trump administration on the decades-old debate about formally allowing Americans to buy drugs from Canada, where prices are significantly lower.

...

https://khn.org/news/trump-administration-open-for-business-on-drug-imports-from-canada/

[CTyankee]

8. Trump is doing this???

Um, why?

[Archae]

15. To get re-elected.

You see, the Democrats will have "socialized medicine" and life-saving drugs as result will be "impossible to get."
(Total bullshit, I know.)

[Farmer-Rick]

7. Tell the guy Canada has better prices then the US

Recently Canada has had some drug price regulatory problems but new legislation should fix that problem.

Despite all that, Canada's prices have still been much lower than in the US.

[cwydro]

9. Whoever this person you were arguing with is a moron.

Drug prices are cheaper in Canada.

[Mariana]

11. Make RWers prove their ridiculous claims first.

If someone tells you something like "Canada, with its socialized health care, has such high drug prices" tell them to prove that Canada's drug prices are higher than those in the US. If they can do that, then concern yourself with asking why.

[Backseat Driver]

12. Maybe these will help you develop an answer???

This is from 2017 but perhaps you'd find some points to throw out to your skeptic RWinger.

https://www.thenation.com/article/why-are-canadas-prescription-drugs-so-much-cheaper-than-ours/

This one is from a Canadian site that talks about how Canada is seeking to lower drug costs:

https://www.canada.ca/en/health-canada/services/health-care-system/pharmaceuticals/costs-prices.html

[CTyankee]

18. thanks. Don't know if it'll help.

[Timewas]

14. Canadian Prescriptions

I get 2 prescriptions from Canada that cost me $120 a month with shipping, the same prescriptions here would run me in excess of $1000 a month...so no,their drugs are not expensive compared to the rip off here.

[CTyankee]

19. Sigh...I thought so but I just wanted to check with folks...

[Timewas]

20. Check prices

This site allows price checking


https://www.northwestpharmacy.com/

[Blue_true]

22. They have lower drug prices. If that was not the case, why would people be

crossing the border to buy pharmaceuticals there. The claim that was made to you was easily verifiable as false simply by checking ethical studies of drug prices between here and Canada that are online.

[CTyankee]

23. Oh, it was a casual conversation at a football game and I don't have a smart phone to do that.

Otherwise, I would have checked it.

[TheRealNorth]

26. First, verify the RW'rs claim before asking why they are higher

I presume RW'rs are either lying or misinformed by someone else lying (i.e. they saw it in one of Trump's tweets).

[liberal N proud]

27. Right wing lies

Like they are coming for your guns
All liberals are baby killers
And Canada has long waits to get health care.

None true and are such distortions from the right that they have perfected the propaganda for.

[Doremus]

28. What a crock. Canada's drug prices are far lower than ours. Don't you remember Bush Jr

pushing legislation to make it illegal for Americans to get their prescriptions filled in Canada?

Jebus we have short memories. No wonder the fucking gop gets away with murder.

https://www.chicagotribune.com/news/ct-xpm-2004-12-22-0412220358-story.html

[CTyankee]

33. Hey, I was just as surprised as you...I just wondered where he got that information and why

that seemed to be such a sticking point to him. He was one of those "I used to vote straight Democratic until 2016 types.

I have printed out some of the articles folks have supplied links to here and will present the information to him (he is a "hired cop" at the football stadium for the fall season where I have season tickets). I tole him I had traveled extensively in Europe as an art historian and had routinely asked people in the countries I visited if they would prefer our system of health care and what they say (NO). But wanted to check out the Canada claim, it was so absurd.

[imavoter]

30. I don't have the answer you are looking for

but the church I go to...well, anyway...

I end up in Canada here and there.

They always say to me when the issue of heath care anything in the US comes up.
"we hope you all get that worked out for yourselves, we have that solved."

I never hear them complain about it.

[roamer65]

31. A visit to a Canadian urgent care was much cheaper than here.

About ten years ago, it was $60 for the visit and $13 for antibiotic ear drops.

Those prices were in Canadian dollars and in a suburb of Toronto.

I didn’t get it reimbursed because it was so damn affordable.

[Fiendish Thingy]

32. They don't - any more questions/fallacies?

I've lived in BC for 7 years, and know what I'm talking about.