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The re-importation of drugs exported to Canada from the United States and drugs manufactured in Canada has recently become extremely popular. The cost of medicine and medical care is constantly on the rise in the United States, due to the high costs of entry to the health care market imposed by the FDA and the American legal system. Medical insurance not withstanding, the burden of buying medicines forces many people to look for cheaper sources of drugs. This demand in the market is the primary reason why Canadian drugs have risen in importance and many American citizens have shown an interest in purchasing drugs from across the border.

The Food and Drugs Act of Canada, passed in 1920, was recently revised in 1985. It ensures that Canadian products are safe, that their ingredients are disclosed, and that drugs are not sold as food or cosmetics. It also states that cures for diseases like cancer cannot be advertised.

The Canadian government has very strict requirements for manufacturing drugs. These requirements are very similar to those in the United States. Generic medications are manufactured in Canada under these stringent laws. A majority of Canadian drugs are cheaper than the same drugs are when sold in the US. Canada has a policy of controlling drug prices through its national health insurance system, something the US does not have.

Canada manufactures only a percentage of generic prescription drugs for its own use. Canada gets the remaining 40 percent from countries around the world. The Patented Medicine Prices Review Board keeps prices high, discouraging patented drug manufacturers from using price reductions as a competitive strategy. This allows companies that produce generic drugs to charge higher prices and protects them from any effects of price competition among brand-name competitors.