Summary: As the public debate about health care costs intensifies, congressional attention has focused on ways to curb the upward spiral of prescription drug prices. The last Congress saw 11 bills introduced that would have constrained drug prices, yet none of these was enacted. Some of these bills would have created a federal board, modeled after Canada's Patented Medicine Prices Review Board, to monitor prescription drug pricing. A September 1992 GAO report (GAO/HRD-92-110) found that manufacturers charge less for many drugs in Canada than in the United States and that the Canadian approach to regulating drug prices contributes to this price differential. This report (1) describes the purpose and the structure of Canada's Patented Medicine Prices Review Board as well as its guidelines and procedures, especially those used to determine if a drug price is excessive, and (2) summarizes the evidence about the effects of the Board's actions in Canada on the prices of new drugs, on price increases for existing drugs, and on pharmaceutical research and development.
