The cost of medicines and medical care is rising slowly but surely in United States, owing to high expenditure. The FDA and American legal system have imposed stringent measures towards health care market. Not withstanding medical insurance, the burden of buying drugs at high prices forces people to look for cheaper sources of the medications they need.
Re-importation of drugs exported to Canada from United States and drugs manufactured at a lower cost in Canada has had an effect on pricing of drugs. Production of drugs and their cost is regulated by certain restrictions and rules applied by Canadian government. Demand for such reasonably priced Canadian drugs has increased the world over. Many American citizens have shown an interest in purchasing drugs from across the border.
Food and Drugs Act of Canada, passed in 1920, was recently revised in 1985. This Act ensures that Canadian drugs are safe, and not sold as food or cosmetics. It is mandatory to declare chemical composition of all drugs on their labels. It also states that cures for diseases like cancer cannot be advertised.
The Canadian government has extremely stringent requirements with regards manufacturing of drugs. These requirements are similar to those in United States. Most generic drugs are manufactured in Canada under these strict laws. A greater part of Canadian drugs are cheaper than drugs of similar chemical composition in the US. Canada has a policy of restricting drug costs through its national health insurance system, which is something the US does not have.
Canada manufactures a limited proportion of standard prescription drugs for its own use. Shortfall is filled up by importing the remaining requirement from countries around the world. The Patented Medicine Prices Review Board keeps prices high, discouraging patented drug manufacturers from using price reductions as a cutthroat strategy. This permits companies that produce generic drugs to charge higher prices and protects them from any effects of price competition among brand-name competitors.