Drug-running isn’t just for Columbian dealers anymore; it’s for your grandmothers too. Our elderly generation of pill-poppers has given rise to a novel demand for cross-border drugs—not for a quick recreational high, but cheap glaucoma treatment instead. Driving across the border (or in this case, taking the retirement-home bus) may offer a thrill-seeking way to beat the lofty prices of pharmaceutical medicines. Yet, whether it’s at a foreign superstore or just the local general shop, the American standard of high prices has become a tremendous obstacle to getting simple treatment for the sick.

In the United States, unaffordable drugs prices limit the accessibility of necessary treatments. For the elderly especially, prescription meds can become a major expense. "Oh yeah, they are expensive," describes Fritzie Blanc, a widowed 85-year-old Texas resident on Medicaid. Even after choosing generic drugs and receiving discounts from Medicaid, she pays over $3000 a year for medication. That’s 20% of the social security check that she is expected to live on. Her situation is not unfamiliar to many other consumers. By 2010, annual prescription drug spending per elderly American is projected to increase to $2,810—a hard price to pay just to stay healthy.

High costs force patients to look elsewhere for cheaper meds. Other countries, such as Canada, have created an alternative market for the same medicine at a much lower price. In fact, our neighbors to the north offer the same prescription pills for less than one-third the cost. Many consumers have already turned to Canada to take advantage of these savings. According to one study, 7% of American buyers get their medication from Canada. This figure doesn’t seem too surprising when you check out the price differences between pharmaceutical drugs in the two countries

Take the pill Nexium as an example. Walgreens, the biggest drugstore chain in the US, sells a monthly supply (thirty pills) of Nexium for $162. Meanwhile, a highly frequented online pharmacy, CanadaPharmacyOnline.com, offers a similar amount of the drug for only $80 (including shipping). The price for Zocor from your local pharmacy is $150 for thirty tablets; online they are just $43. This prices difference equates to over 300% —a yearly savings of $1248 for just one medicine. For almost all treatable illnesses, Canadian pharmacies consistently provide better prices to consumers.

So what’s the cause of such price differentiation? Like many other countries, Canada has a governmental organization that enforces price controls; this department seeks to maintain the cost of pharmaceutical drugs at reasonable prices. In contrast, the US lacks such a price control system.

Canada’s Patented Medicine Prices Review Board (PMPRB) implements these price controls with three major restrictions on pharmaceutical companies. First, for most new patented drugs, the cost may not exceed the highest cost of other existing drugs already in use to treat the same disease. Second, for any breakthrough drugs, not already in existence, the cost will be the median price of the drug established in other countries. And third, the price increase of the drug after its release cannot exceed the rate of inflation. By regulating the industry in this way, the Canadian PMPRB keeps drug prices affordable, while the United States remains one of the only developed countries in the world without price restrictions on pharmaceutical medications.

Surprisingly, despite Canada’s nationalized healthcare, the national government does not cover the cost of any prescription drugs. Instead, many provincial governments take responsibility for subsidizing costs. These regional governments mollify costs for the typical consumer in two major ways. First and most obviously, the government gives money to help pay for medications. Secondly, the government creates "preferential lists" of drugs that are proven efficient and cost-effective. By strictly subsidizing these approved medications, the government creates an incentive for pharmaceutical companies to decrease their prices in order to ensure placement on the preferential list. This adds a competitive market for drug prices and limits consumer exploitation. Tom Brogan, a former Canadian civil servant who helped write the Canadian price control law explains, in the case of a new drug, companies will price "below products already listed to encourage provincial officials to include their drug." This competition creates even lower prices.