Why Are Canadians Over-Paying for Pharmaceuticals?

Introduction
The lives of a lot of Canadians are highly dependent on the prescription drugs that they take. Pharmaceuticals have become a part of almost everyone’s day-to-day life. However, over the past thirty years or so there have been dramatic increases in both the demand for drugs and their cost. On February 28, 2013, Steve Morgan published his article entitled “Canadians Are Over-Paying for Pharmaceuticals Year After Year” in the Huffington Post. He addressed the cons of a multi-payer system and talked about how a single-payer system would be beneficial to the Canadian health care system. This paper will address the reasons for which Canadians are paying an excessive amount for pharmaceuticals. Comparisons with various countries abroad and strategies to reduce drug costs will also be discussed.

Canada’s Drug Expenditures and Our Ranking on an International Scale
Most drugs have allowed people to live longer and better lives, which is why we have become so dependent on them (Armstrong 51) However the rising costs of drugs are preventing a lot of Canadians from seeking the treatment that they need (CBC). In Canada, total government drug plans cover approximately forty-six per cent of total prescription drug costs (Armstrong 52). In 2013 Canada’s total drug expenditure reached to $34.5 billion or sixteen per cent out of our total health budget compared to $33.0 billion in 2012 (NHET 2). Since 1985, drug expenditure has increased from $160.01 per capita compared to $955.44 per capita in 2012 (CIHI 3). The breakdown of drug expenditure in Canada is as follows: prescription drug spending makes up to eighty-four per cent of total drug expenditure, while spending on non-prescription drugs reached to about $5.3 billion in 2012 (CI...

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...er year (Ventola 1). In Canada DTCPA is not completely illegal, it allows pharmaceutical companies to mention only a drug’s name, price, and quantity (CHSRF 1). “Reminder ads” are the advertisements that tell consumers to “ask their doctor” and they usually only promote the drug name (CHSRF 1). It is claimed by the pharmaceutical industry that drug advertisements are meant to simply educate the public by raising awareness of newer therapies, which as a result will improve the overall health of the country (CHSRF 1). The problem with any kind of direct-consumer advertising is that it only stimulates the sales of new drugs that have been recently released into the market that are also more expensive than pre-existing medications on the market. Another problem with new drugs released into the market is that they are not necessarily any better than existing medications.