Prescription drug prices for single-source brand name drugs in the United States are significantly higher than in Canada and other countries, many of which have price controls. Prices for generically available drugs tend to be higher in Canada. The price differential for brand-name drugs between the two countries has led Americans to purchase upward of US$1 billion in drugs per year from Canadian pharmacies. Pharmaceutical companies argue that the prices they set are necessary in order to continue to fund research. Only 11% of drug candidates that enter clinical trials are successful and receive approval for sale. The large cost of conducting clinicals trials for unsuccessful candidates must be recovered from the sales of successful drugs, otherwise the discovery and development of new pharmaceutical drugs would be unsustainable.
The AARP has published a series of studies suggesting that prescription drug prices are rising significantly faster than general inflation.[3] Others have criticized the methodology used as overstating drug price inflation. Prescription drug prices, in particular as part of Medicare, have become a political issue in the United States. Critics argue that there is no reason for American consumers to subsidize the low drug prices in other first-world nations. It is claimed by the drug companies and Food and Drug Administration regulators that there is danger to consumers in using drugs from Canada.[citation needed] There is scepticism, based on how much actual risk is involved.
Both houses of Congress have passed legislation to permit imports; but the Bush Administration and the FDA are opposed. The anticipated Medicare reforms, expected to pass, include prescription drug coverage under Medicare, and there is some interest in Congress in permitting imports under FDA regulation.
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