Canada ponders a federal programme for pharmaceuticals

IN JULY Bernie Sanders hopped on a bus in Detroit with some Americans who have diabetes. They rode across the Canadian border to buy insulin at a tenth of the price they would pay at home. For Mr Sanders, who won the New Hampshire primary on February 11th, joining an “insulin caravan” had obvious appeal. He promises “Medicare for all”, suggesting that every American should enjoy the lavish public health spending that the elderly receive. He praises Canada for its tough negotiations with drug firms. “We should be doing what the Canadians do,” he declared.

Canadians have their doubts. Canada’s pharmaceutical prices are 25% higher than the average in the OECD, a club of 36 mainly rich countries. American prices are higher still, largely because the United States has powerful drug firms, no price-setting regulator and lots of citizens who receive health insurance through their employers and have little idea how much it costs. Unlike Canada, the United States also lets drugmakers advertise directly to consumers. As a share of GDP, Canada’s pharmaceutical spending is the fifth-highest in the OECD (see chart).