Canadian generic drug prices topped international levels in recent years: PMPRB

Past price-reduction policies and high generic drug use were not enough to align Canada with other countries

Canadian generic drug prices topped international levels in recent years: PMPRB
The most recent edition of the Generics360 report, published by the Patented Medicine Prices Review Board (PMPRB), has revealed that Canadians continued to pay more than most other OECD countries for generic drugs in 2016.

The study focused on data from the last quarter of 2016. It examined 605 generic drugs that made up 82.3% of all Canadian generic sales. Aside from comparing Canadian prices with the seven countries noted in the PMPRB’s regulations (PMPRB7) — France, Germany, Italy, Sweden, Switzerland, the UK and the US — it also looked at data from select OECD countries.

Relative to its peers, Canada’s generics market was strong during the period. Generic drug sales reached $5.5 billion in 2016, which translated to a per capita spending rate of $165. Generic drugs also accounted for 74% of the volume of drugs in the Canadian pharmaceutical market. Overall, it was the second-highest per capita spending and the third-highest rate of generic drug use among OECD countries.

The country also experienced reductions in generic prices due to the implementation of provincial and territorial policies. Between 2013 and 2016, the pan-Canadian Pharmaceutical Alliance (pCPA) brought the price of 18 of the most commonly used generic drugs to 18% of their brand-name equivalents. Average generic drug prices in Canada were also found to have declined by 50% from 2006 to 2016.

However, Canadian public drug plans could have paid even less. In the last quarter of 2016, generic drug prices in Canada were the seventh highest in the OECD. Compared to Canada, the PMPRB7’s average and median generic drug prices were 11% and 30% lower, respectively. Overall, public plans’ generic drug expenditures could have been reduced by nearly half a billion dollars — over 5% of total drug costs in fiscal year 2015-2016 — if higher-priced, top-selling generic drugs had been aligned with international levels.

The country’s international standing could soon change, thanks to a new five-year plan announced by the pCPA and the Canadian Generic Pharmaceutical Association (CGPA). Staring on April 1, prices for 70 different prescribed drugs will be reduced by 25% to 40%. Those reductions, along with the launch of new generic drugs, are expected to bring close to $3 billion in savings to the Canadian health system.

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