Is Medicare a Match for Canadian Online Pharmacies?

Is Medicare a Match for Canadian Online Pharmacies?

Canadian online pharmacies have, for nearly two decades now, been supplying Canadian drugs to American patients who find themselves unable to afford the medication they are prescribed. The practice has become so widespread that there are now Canadian pharmacies, like Canada Pharmacy, specifically devoted to supplying prescription and over-the-counter drugs to American consumers. Canadian drugs match every safety and effectiveness standard expected in the U.S. and yet they are very often as much as 70% cheaper. 

The reason for this is simple. The Canadian government caps the price at which pharmaceutical companies may sell their drugs in Canada while the American government has no interventionist role whatsoever. Thus, pharmaceutical companies charge what they like in the U.S. – and they charge a lot. 

For the vast majority of Americans, the situation does not seem to be improving in any meaningful way. Citing the argument that high prices are necessary to fund research into new drugs, pharmaceutical companies defend their prices and have the broad support of the political establishment as a result. There is, in fact, broad consensus that something needs to be done about the high prices, but that comes with the caveat that it cannot be a government interventionist approach to cap them – it cannot be the Canadian system.

Unsurprisingly, this has left the majority of Americans out in the cold when it comes to having their desire for meaningful change heard (which is precisely why the cross-border medication trade from Canada is doing so well). However, there is one subsection of American society that do have something more of a defense against the rapaciousness of prescription medication prices. This group would be the over 65s, or more accurately those who qualify for Medicare. 

How Does Medicare Help Against High Drug Prices? 

Medicare is a health insurance program started under the Social Security Administration but now run by its own government branch. It is certainly widespread enough to require its own department, with almost 60 million Americans currently receiving medical aid from the service. This number includes the elderly, but also as many as eight million younger people with disabilities and terminal diseases. 

Medicare provides roughly half of the healthcare expenses of the those enrolled in the program while the remainder has to be covered by the usual means of private health insurance.  U.S. federal spending on Medicare is about $776.2 billion and it is undoubtedly a great help for many Americans struggling with high and rapidly rising prices of prescription drugs. 

Medicare also plays a role in price reduction policy, a role that has recently seen much attention paid to it. This is the Medicare price negotiations, which is a new government policy that sees the federal government negotiate the price of prescription drugs on behalf of Medicare beneficiaries. This policy is notable for being about as close the U.S. has gotten to a Canadian style intervention on the part of the government in prescription drug pricing. It is only partial, only affects a minority of Americans, and does not guarantee lower prices but, short of more fundamental change, it is undoubtedly a significant step.

Does it Compare to Canadian Drugs?

In terms of prices, no. Medicare is a system that benefits millions of Americans and can help reduce the high prices of prescription drugs, but there’s no way it can reduce them to cheaper than the prices of the same drugs purchased from Canadian online pharmacies. The prices in America are simply too high to begin with, and only more fundamental systemic change can bring the country into line with its northern neighbor.