The Canadian Price Is Right For Medicare Part D Negotiations

In passing the Inflation Reduction Act (IRA), we as Americans finally said: ‘enough is enough’ on the astronomical prices of drugs in Medicare. Drug price negotiations between the government and Medicare used to be banned. Removing the ban, the IRA has cracked open the door to negotiating for those drug products for which we spend the most money each year. Starting in 2026 there will be 10 negotiated drug prices. But what is the “right price” for those drugs?

Well, for so many years, Americans have looked to Canada for lower drug prices, by trotting across the border, finding online pharmacies, through their self-insured pharmacy benefit options, and “Canadian pharmacy storefronts,” really offices where people can find assistance buying lower cost drug from Canada. So, this is really what Americans should get in terms of pricing.

Canada’s entire population is about 38 million people. In contrast, about 63 million Americans are enrolled in Medicare. That population should carry a huge negotiating heft. So why shouldn’t we obtain the Canadian price through tough negotiations? Current Canadian prices per dosage unit are an average of 63.61% lower than average Medicare Part D prices per dosage unit in 2020. For a deeper dive, see PharmacyChecker’s new report.