Table of Contents
I. Why Are Prescription Drugs More Expensive in the U.S.?
II. Why Are Drugs Cheaper in Canada?
III. Can Americans Buy Drugs From Canada?
V. FAQ: How Can I Make Sure I’m Getting Genuine Savings When Ordering From a Canadian Pharmacy?
Prescription drugs are often cheaper in Canada because Canada has a more structured system for reviewing, monitoring, and negotiating medication prices. Before drugs reach patients, they go through Health Canada’s approval process, patented medicine price monitoring, and public drug plan negotiations that can help keep costs lower.
This article explains why Canadian drugs often cost less than U.S. medications, how Canada’s drug pricing system works, and what to check before ordering from a Canadian pharmacy.
Why Are Prescription Drugs More Expensive in the U.S.?
Prescription drugs cost more in the U.S. for several reasons, but a big one is how the system is set up. Drug prices are affected by factors such as competition, patents, advertising, and the fact that different federal programs may pay different prices for the same medication.
- Competition: When more companies make the same drug, prices usually have more room to come down. That is often what happens with generic drugs. Generic medications compete mainly on price, and their prices generally fall as more manufacturers enter the market. Brand-name drugs work differently. When a drug is protected by a patent or exclusivity period, the manufacturer has more pricing power because there may not be another version available yet.
- Advertising: Drug companies advertise directly to consumers, so patients ask their doctors about certain medications. From 2016 through 2018, Medicare Parts B and D and beneficiaries spent $560 billion on drugs. Of that amount, $324 billion was spent on drugs with direct-to-consumer advertising.
- Different federal programs: Government programs do not always pay the same price for prescription drugs. Some programs may have access to discounts, pricing rules, or purchasing arrangements that others do not. As a result, one federal program may pay much less for the same medication than another. [1]
The U.S. also spends more on prescription drugs than many other countries. According to the U.S. Government Accountability Office, estimated U.S. retail prices for 20 selected brand-name prescription drugs were more than 2 to 4 times higher than prices in Australia, Canada, and France in 2020. [1]
Why Are Drugs Cheaper in Canada?
Drugs are often cheaper in Canada because Canada has several systems that help review, monitor, and negotiate medication prices. These systems create more pricing oversight before many drugs reach public drug plans and patients.
The PMPRB Monitors Prices for Patented Medicines
The Patented Medicine Prices Review Board, or PMPRB, helps monitor the prices of patented medicines in Canada. When a patented medicine is first sold in Canada, the company responsible for it must send the PMPRB price and sales information within 30 days. After that, the company must keep filing updated information twice a year for each strength and dosage form of the medicine. [2]
The PMPRB uses this information to decide whether a patented medicine’s price needs a closer review. First, it compares the highest Canadian list price with the highest price for that medicine in certain other countries. If the Canadian list price is higher, the medicine may go through a more detailed review. [2]
The PMPRB also reviews patented medicine prices each year. This review examines how the Canadian price compares with international prices and whether it has increased more than expected, given inflation. [2]
If a medicine requires a more detailed review, PMPRB staff consider several factors. This can include how the medicine compares with similar treatments, its pricing history, scientific information, and other relevant details. After the review, staff may recommend closing the review or moving the matter to a formal hearing. [2]
In some cases, the company may agree to lower the price of the medicine or repay money earned from selling it at a higher price. [2]
Put simply, the PMPRB gives Canada another way to monitor patented drug prices. This provides a way for the prices of patented medicines to be formally reviewed rather than left completely unchecked.
The pCPA Negotiates Prices for Public Drug Plans
The pan-Canadian Pharmaceutical Alliance, or pCPA, negotiates drug prices on behalf of participating public drug plans. It was created to help achieve greater value for publicly funded drug programs and patients by using the combined negotiating power of participating jurisdictions. [3]
That combined approach matters. Instead of every public drug plan negotiating completely on its own, participating provinces, territories, and federal drug plans can work together through the pCPA process. [3]
As of April 2025, pCPA collective negotiations had produced $3.94 billion in annualized savings for brand-name drugs and $935 million in annualized savings for generic drugs. Together, that totals $4.87 billion in annualized savings. [3]
For patients, the basic takeaway is simple: Canada’s public drug plans often negotiate with greater collective weight behind them. That can help support lower prices for publicly funded drug programs. [3]
If you want to keep learning about the Canadian medication system and drug regulation, read our article Who Regulates Canadian Drugs?
Can Americans Buy Drugs From Canada?
Yes, Americans can buy medications from Canadian pharmacies, and many people look to Canada because prescription drugs may cost less than they do in the U.S. However, the safest option is to order from a legitimate Canadian pharmacy, not just the website offering the lowest price. Health Canada warns that some online pharmacies may appear trustworthy even when operating illegally. [4]
Fraudulent online pharmacies may sell drugs with the wrong ingredients, harmful ingredients, or no medicinal ingredients at all. These products may not work, may worsen your condition, or may cause a bad reaction. Some unsafe websites may also put your personal and banking information at risk. [4]
To learn how to tell whether a Canadian pharmacy is legitimate, read our article How to Stay Safe When Buying Canada Drugs.
If you’re ready to order more affordable medication from a Canadian pharmacy, read our article How to Buy Affordable Canada Drugs Online in 3 Easy Steps for a clear breakdown of the process from start to finish.
Conclusion
Canadian drugs are often cheaper because Canada has a more structured system for reviewing, monitoring, and negotiating medication prices before many prescriptions reach patients. These pricing checks help explain why the same or similar medications can cost less in Canada than in the U.S. If you’re new to Canadian pharmacies, read our comprehensive online Canadian pharmacy guide.
FAQ: How Can I Make Sure I’m Getting Genuine Savings When Ordering From a Canadian Pharmacy?
To make sure you are getting genuine savings from a Canadian pharmacy, look at both why the price may be lower and whether the final order cost is actually cheaper for your prescription.
Canadian drug prices may be lower because Canada has systems that monitor and negotiate medication prices. The Patented Medicine Prices Review Board (PMPRB) reviews pricing information for patented medicines and can flag prices that appear high compared with certain international prices. Public drug plans can also negotiate through the pan-Canadian Pharmaceutical Alliance (pCPA), which uses the combined purchasing power of participating provinces and territories to help secure better pricing. These systems help explain why medications may cost less in Canada than in the U.S.
Once you understand the broader pricing structure, compare the full cost of the same medication across more than one legitimate Canadian pharmacy before you order. Check the drug name, strength, dosage form, quantity, shipping fees, refill timing, and any service or processing fees. You can also calculate the price per pill by dividing the total medication cost by the number of pills in the order. This makes it easier to compare prices fairly, especially when pharmacies list different quantities.
You should also compare the Canadian pharmacy’s price with your local U.S. pharmacy price, insurance copay, or discount card price. This helps you confirm whether ordering from Canada actually lowers your out-of-pocket cost for that specific prescription.
Steps to check genuine savings from a Canadian pharmacy:
1. Compare the same medication name, strength, dosage form, and quantity.
2. Calculate the price per pill by dividing the total medication cost by the number of pills.
3. Check the full order cost, including shipping and any added fees.
4. Compare prices between a few legitimate Canadian pharmacies.
5. Compare the Canadian pharmacy price with your U.S. pharmacy, insurance copay, or discount card price.
DISCLAIMER: The content in this article is intended for informational purposes only. This website does not provide medical advice. In all circumstances, you should always seek the advice of your physician and/or other qualified health professionals(s) for drug, medical condition, or treatment advice. The content provided on this website is not a substitute for professional medical advice, diagnosis or treatment.