It is perceived that the provincial drug plans firmly control prices, but although they buy large quantities of drugs, as public agencies they are limited in their actions. The provincial drug plans are constantly in court, from the provincial courts all the way up to the supreme court, for trying to put downward pressure on prices. A private insurer would be able to face such challenges in the courts very easily. The large insurers in the United States have much more leeway in driving a hard bargain than the provincial drug plans. There are proposals in the United States that would forbid pharmaceutical firms from charging more than they charge in Canada.
Similar mechanisms are already in place in Canada.
Quebec requires that it be offered the lowest price offered to any other Canadian province. In Canada, prices of new patented medicines cannot exceed the highest price of other drugs in the same therapeutic class. Prices cannot increase faster than inflation as measured by the Consumer Price Index, and no drug, new or existing, may have a higher price than those in the international comparator countries. Provincial drug plans are constrained by their budgets and may delay listing cost-effective new drugs because they do not fit within the budget, even if they create savings elsewhere in the health care system. Many price comparisons made between the United States and Canada do not take into account discounts, rebates, and other initiatives that lower average selling prices well below listed ex-factory prices.