Why Are Drugs So Expensive In Canada?

No, we are not referring to the joint you smoke before you order a pizza and binge watch Netflix on a Saturday night, or the white powder that guy from school snorts at a party to “sober himself up”.

We are referring to prescription drugs – the ones that keep your diabetic sister’s blood sugar levels manageable, the ones that help your depressed and anxious coworker get through the day, or even just the ones that prevent the girl next door from having an unwanted pregnancy.

These prescription drugs are outrageously expensive in our country, despite our “amazing Canadian healthcare”, and it’s a serious problem – one that we should not have and one that we need to look into fixing.

The first step to fixing the issue is being educated on it. Below, we will outline a few root causes of why drugs are so expensive in Canada.

The Facts

  • Canada has the 2nd highest costs for prescription drugs for common conditions when compared to 9 other affluent countries with universal healthcare.
  • That means Canada has the 2nd highest medication cost globally.
  • Of the study, which was published in the Canadian Medical Association Journal, Canada was the only of the 9 countries that lacked universal coverage of outpatient prescription medication as part of its hospital and medical care.
  • Canada has 19-31% higher prices than Europe, USA, Australia, and New Zealand.
  • It is estimated that 1 in 10 Canadians cannot or choose to not fill their prescriptions because of the out of pocket costs to them.
  • Canada is the only country in the would that has universal healthcare but no universal drug coverage.
  • Canada has the fastest rising drug costs; more than a 10% increase each year.
  • Approximately 1/3 of working Canadians do not have employer funded prescription drug coverage.
  • Drug coverage in Canada is a mix between public and private insurers.

Canada’s Drug Problem

It is clear that Canada’s main problem is the idea that we have universal healthcare but no universal prescription coverage. In fact, Canada is the only country with universal healthcare that doesn’t have universal pharmacare.

Say what?

But that isn’t our only problem, and that wouldn’t even be a problem if our prescription medications weren’t so outrageously expensive. If prescriptions were a reasonable and affordable price, many Canadians probably wouldn’t even criticize the lack of universal drug coverage. Unfortunately, that’s not the case.

Why, though, are our drugs so much more costly when compared to countries with similar healthcare systems to ours?

There are a few specific reasons, which we will take a look at below, including: drug patents, misinformed prescribing, and a poor drug purchasing system.

Drug Patents

Drugs involve intellectual property; this means they can be patented.

Having a patent on a drug means that no other producer or company can compete with your product until the patent expires. In Canada, these drug patents typically last 20 years.

That means for 20 years, there will only be one version of the drug available, and only one company will supply it, giving them a monopoly on the product.

This is a dangerous and unfair situation, as these drug companies coming out with new drugs, especially ones that are widely needed, can really charge extreme prices and they will still make sales as consumers needing the drug will have no other option.

It is only when the patent expires that other companies can then begin to replicate and produce generic versions of the drug. These generic versions of expensive name brand drugs produce the same results and have the same side-effects, as they are made from close to the same formula, but typically come at a much cheaper price.

Misinformed Prescribing

Doctor’s typically rely on the drug companies to educate them on the new drugs available and how they can benefit the patients.

This is no doubt a conflict of interest, as drug companies will always favour their own products, despite whether they are actually the best option available or the cheapest.

Often times, these drug company representatives will even stoop so low as to avoid informing Doctors of potential negative side effects or risks of their medications, as to make their drug appear superior.

Not only this, but they will even try to promote totally irrelevant benefits, such as a diabetes medication also helping with weight loss, which was the case during a hidden camera study done at a medical conference in Vancouver two years ago. This is known as off-label promotion, and despite the fact that it involves promoting benefits of the drug that have not even been approved by Health Canada, it is incredibly common.

As a result, the Doctor’s often go on to prescribe these marketed drugs to their patients without first researching if they truly are the right option for the patient or if there are other potential options that may be more effective and more affordable.

Patients are then stuck purchasing an over priced prescription, or worse they are unable to afford their prescription, when in fact there is most likely a cheaper option available that would do the same job.

This is an issue that needs to be addressed in multiple ways, not just the recovery side of prescription and other drug addiction treatment in BC.

First, drug companies need to act more objectively and morally, as there is more at stake than just a few dollars of profit.

Second, Doctors need to take the initiative to do their own research, so they are then able to provide patients with the most suitable prescription for their needs, both medically and financially.

And third, patients need to be more inquisitive. Question your doctor; ask what your options are before being handed your prescription. Make your doctors accountable for the prescriptions they are providing you with.

A Poor Drug Purchasing System

Between the years of 2011 and 2015, employer-funded insurance plans wasted an astonishing $15 billion covering the costs of expensive drugs, despite them having cheaper and just as effective alternatives.

Drug purchasing in Canada is up to the provincial and territorial governments, as well as privately funded insurance companies, however the federal government has in place the PMPRB (Patented Medicine Prices Review Board).

The PMPRB was created for all of the right reasons: to review and limit the prices charged by pharmaceutical companies for their patented drugs. While this is a step in the right direction, it fails to limit the prices that wholesalers or pharmacies are allowed to charge, as they are not bound by the same regulations that the pharmaceutical companies are. It also does not limit the price that companies may charge for generic versions of previously patented drugs.

So despite this board being in place, the prices of prescription drugs has continued to rise.

One positive movement towards lowering these prices was the creation of Pan-Canadian Pharmaceutical Alliance in 2010, which allows the provincial and territorial governments to work together for greater bargaining power and to negotiate lower prices on medications.

Drugs Aren’t The Only Problem

Not only are prescription drugs at an all time high price, but treatments are also reaching an almost unattainable cost.

Many Canadians who seek treatment for a multitude of reasons, such as mental health, addiction, etc. are unable to afford the treatments they need.

One therapy sessions can run someone between $50-240 depending on what province they are in. Sometimes these sessions may be covered by an employer funded health coverage plan, but for those who do not have this coverage this can be a steep price to pay.

Even more so, rehab programs can cost thousands of dollars, even for shorter programs ranging from 2-4 weeks; long term programs even more so. Those facing addiction problems often do not have the funds necessary to cover the cost of rehab.

When Canadians in need cannot afford these treatments they are left to suffer as their conditions worsen, which not only affects them but also everyone around them.

How This Affects Canadians

These situations really only have negative effects on Canadians.

Many Canadians have to make sacrifices in other aspects of their lives, such as cutting costs on other living costs like groceries or utilities, meaning they are going hungry or cold, in order to afford a prescription they need.

Some Canadians are cutting back on their prescriptions in order to balance the costs by only taking portions of their required dosages, or taking them less frequently than what is prescribed.

Some Canadians are forgoing filling their prescriptions all together because they simply cannot afford them.

And other Canadians yet, who struggle through their day-to-day lives because of crippling mental health issues or addiction problems, more often than not go without the proper treatment they need to get better.

This is not okay.

It hurts those needing the drugs or the treatments, and it hurts those around them who rely on them or who care about them.

For these reasons, Canadians are not as healthy as they could be. Illnesses are lingering, medical conditions are regressing, and in the worst case scenarios, people are even dying; all because in a country that boasts of their world renown healthcare, people cannot afford the necessary medications they need to keep up a healthy and happy quality of life.

Proposed Solutions

While there is no one way to go about this, as we as individuals have little control over such government matters, there are small steps we can take to help save ourselves money on our prescriptions and inspire change in the system.

Have meaningful discussions with your doctor. Do not be afraid to speak up and question the prescriptions they are writing for you. Ask what your options are and discuss alternatives that may be just as effective but more affordable.

If you are a doctor, don’t buy into everything that drug companies tell you. Ensure they are educating you fully on their product, including the negative side effects, not just the benefits, and don’t believe all of the off-label promoting they try to sell. Only use a drug for what Health Canada has approved it for. And don’t hesitate to do your own research.

And finally, if you are a representative for one of these large drug companies trying to sell your product at a medical conference; act morally and ethically and remember that peoples health is at stake, not the dollar signs your company will see.

References

  1. http://www.cbc.ca/news/health/canada-medication-costs-cmaj-study-1.4156266
  2. http://ufcw.ca/index.php?option=com_content&view=article&id=31831:by-the-numbers-the-high-cost-of-prescription-drugs&catid=9924&Itemid=98&lang=en
  3. https://www.drugfacts.ca/treatment-centers/bc-drug-treatment-centers/
  4. http://www.cbc.ca/fifth/episodes/2016-2017/the-high-cost-of-phamaceuticals-canadas-drug-problem
  5. https://tvo.org/article/current-affairs/the-next-ontario/why-drugs-are-so-expensive-in-canada

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