E-drug: US subsidizes drug prices in Canada?
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For a variety of reasons (which I won't go into) this has been thrown
up as a topic on another email list I subscribe to.
I smell a red herring - and I've probably read past discussions about
this on edrug - but I'm not that knowledgeable about any exposition
that such a relationship is not true. My general understanding is
that the Canadian federal government establishes a ceiling market
price, provincial governments establish formularies that define
what products will be reimbursable or covered (and at what cost),
and other entities (eg, hospital purchasing groups) entertain bids
for contract prices.
I don't understand why US HMOs, for example, don't exert similar
effective price restraints - but it seems to me that medication
prices in the US are higher because there has never been a
concerted effort to create a mechanism to control them - and the
companies sell at any price they choose.
Is this even remotely on the right track?
Thanks.