Thanks to “misguided” Canadian government policies, the prices for generics have risen so dramatically that they’re more expensive than the same drugs in the US, a new study from the Frasier Institute, an independent Canadian think tank, shows.

Generic prices in Canada were, on average, 115 percent higher than US prices. But Canadian brand-name drugs were about 51 percent cheaper than those in the US. “Canadians pay more for generic drugs because government policies shield generic drug companies and pharmacy retailers from normal market forces that would naturally reduce prices,” says Brett Skinner, The Fraser Institute’s director of health, pharmaceutical and insurance policy research.

As a result of the inflated generic prices, Canadians spent between $2.5 billion and $6.6 billion unnecessarily spending in 2006 alone. (That’s in Canadian dollars, folks. And 1 US$ equals about $1.06 in Canada). From 2003 to 2006, the total in unnecessary spending was estimated to be as high as $20 billion, or possibly more than $26 billion (Canadian dollars), according to the report.

Generic prices in Canada have risen compared with a similar study in 2005, Reuters reports. At that time, they were 78 percent more expensive in Canada than in the U.S., while Canadian brand-name drugs were 43 percent cheaper.

The new study showed that 44 percent of the retail scrips dispensed in 2006 were for generics, while 56 percent were for brand-name drugs. In the US, 63 percent of the scrips were for generics and 37 percent were for brand-name drugs.

Canadian programs direct public reimbursement of meds to pharmacies instead of consumers, insulating consumers from the cost, according to the report, and that provincial drug programs reimburse generics at a fixed percentage of the brand-name original drug, which discourages price wars.

“Since the U.S. market is not distorted by the kinds of government policies that exist in Canada, Americans benefit from dramatically lower prices for generic drugs,”