[Karsus]

The drug companies do not have to sell in Canada, but since they do it shows that they can make a profit at such prices. The question is why the same drugs are so much cheaper in Canada. It has to be more than a goverment subsidy.

[badfreeper]

Actually, there is no subsidy. There are 3 major reasons why prescriptions are cheaper in Canada.

1) Longer exclusivity period. IIRC, drug companies in Canada have 17 years before others can market generic equivalents vs 10.5 in the US. They can spread out their R&D recoupment over a longer period.

2) Price caps. Drugs are capped at a price which is the average that the medication is sold for in industrialized countries. Keeps prices lower, but it's not a subsidy.

3) Advertising restrictions. Probably most significant. Since drug companies are severely limited in what they can say in ads, they spend a only tiny tiny fraction of the multi-billions they do for promotion in the US.

I think the market might be a factor as well. Americans, per capita, use about twice the amount of prescription drugs as Canadians.