Why Are Drugs So Much Cheaper From Canada?

Prescription drugs are often less expensive in Canada because of government price controls and differences in how the market is regulated:

• Government Price Regulation: Canada sets national price ceilings on many prescription drugs, limiting how much manufacturers can charge. In the U.S., there is no equivalent federal cap—prices are negotiated between drug companies, PBMs, and insurers.
• Negotiated National Buying Power: Canada’s healthcare system negotiates centrally with drug manufacturers, while in the U.S. pricing is fragmented across thousands of health plans.
• Distribution Rules: Canadian law discourages practices like “spread pricing” that are common in the U.S. PBM market.
• Approval Standards: Canada does not approve a new drug for market unless it has been shown to be both clinically effective and cost-effective. This keeps unproven or overpriced drugs from driving up system costs.

How Self Fund Health Uses This

Through our partnership with CanaRx, certain high-cost specialty and brand medications can be filled from Canada (or other international sources) at a much lower price.

• For members: Medications filled through CanaRx are available at $0 cost.
• For employers: These fills bypass inflated U.S. prices, creating substantial savings.

Key takeaway: Drugs are cheaper in Canada because of government regulation, centralized pricing, and stricter approval standards. Self Fund Health leverages CanaRx to bring those proven, lower-cost options directly to members and employers.