Why are prescription drugs cheaper in Canada?
Educational information, not medical, legal or insurance advice.
The short answer
For the patented medicines the PMPRB compares, Canadian list prices are lower than U.S. list prices. Part of the reason is that Canada reviews the prices of patented medicines and its provinces negotiate together. But savings vary by drug, and generic drugs tend to cost less than brand-name drugs in the U.S. too.
A federal price review
The Patented Medicine Prices Review Board (PMPRB) is an independent body set up by Parliament in 1987. Its purpose is to protect and inform Canadians by making sure the prices of patented medicines sold in Canada are not excessive.
Patented medicines are those tied to an invention protected by a patent. The PMPRB does not review non-patented medicines. It also does not negotiate prices. Its job is to decide whether a price is excessive.
Provinces negotiate and decide what is covered
In Canada, the provinces and territories run their own public drug plans. Each one decides which new drugs are listed on its drug list for patients.
Working together, the provinces and territories use a group called the pan-Canadian Pharmaceutical Alliance (pCPA). It negotiates the price of selected approved drugs with the companies that make them, on behalf of publicly funded drug programs across Canada.
How the U.S. system differs
In the U.S., each Medicare drug plan chooses which drugs it offers and places them in tiers. Generally, a drug in a lower tier costs you less than a drug in a higher tier.
A 2022 law also gave Medicare the ability to negotiate directly with drug companies over the prices of certain high expenditure, single source drugs. The first 10 negotiated prices took effect on January 1, 2026.
What the numbers show
The PMPRB compares list prices across countries each year. In its 2024 report, U.S. list prices for the patented medicines compared were 264% higher than Canadian list prices. That was the largest gap among the countries compared.
There are important limits. These are list prices before any rebates or discounts. The report says neither list prices nor net prices are the true amount paid by insured Canadians or by public or private insurers, who often negotiate discounts.
The report also notes that Canadian list prices were among the highest in the OECD in 2024, ranking fifth of 31 countries. Canada is not low-priced compared with every country. The big gap is with the U.S.
Generics are a different story
Generic drugs have the same active ingredient as the brand-name drug. The FDA says generic medicines tend to cost less than their brand-name counterparts, and that most prescription drugs sold in the U.S. are generic. Health Canada says generics are usually available at a lower cost in Canada too.
The PMPRB's comparisons cover patented medicines, and it does not review non-patented medicines. For a generic you already take, the gap may be small. Prices differ drug by drug, so it is worth checking the ones you use.
What this means for you
Savings depend on the drug, the dose and the pharmacy. Some medicines may cost much less, and others may not. If you use Medicare drug coverage, also read how drugs from Canada fit with your deductible and ways to save before your deductible is met.
RxPriceLink is a referral service, not a pharmacy. We point you toward licensed partner pharmacies and show you the lowest price we find. A valid prescription is always required, and you decide what is right for you.
Keep reading
Local information for each state: Arizona · Florida · New York · Pennsylvania · Texas.
Sources
- PMPRB: Annual Report 2024 (mandate, price comparisons, list-price caveats, pCPA)
- Health Canada: Prescription drugs in Canada (provinces and territories, pCPA, PMPRB)
- Health Canada: Access to generic drugs in Canada
- CMS: Medicare Drug Price Negotiation Program, negotiated prices for 2026 (fact sheet)
- Medicare.gov: How do drug plans work? (formularies and tiers)
- FDA: Generic drug facts
- FDA: Generic drugs, questions and answers