Federal
Analysis on generic savings from 2007 to 2012
Generic prescription medicines play a key role in controlling health-care costs in Canada. Generic prescription drugs are used to fill 60-percent of all prescriptions, yet account for only 24.5-percent of the $22-billion spent annually on prescription drugs in Canada.
Generic prescription medicines are essential for the sustainability of public, employer and union-sponsored drug benefit plans upon which the vast majority of Canadians rely.
The following methodology was employed by the Canadian Generic Pharmaceutical Association (CGPA) to calculate the savings from the use of generic prescription medicines from 2007 to 2011:
- CGPA purchased the annual Canadian sales data from IMS Brogan and reviewed the brand-name and generic pharmaceutical product sales from September 2007 to the 12 months ending December 2011.
- For each year, CGPA calculated the average annual price difference (discount) between generic prescription medicines and the brand-name versions.
- CGPA used the average price differential for each year and the • annual sales of generic medicines to calculate annual savings from 2007 to the 12 months ending December 2011.
Over the past five years (2007 to the 12 months ending December 2011) the use of generic
prescription medicines saved Canada’s health-care system (both public and private sector
drug purchasers) a total of $25.7-billion.
The ongoing sustainability of drug benefit plans in Canada is highly dependent on the use
of generic prescription medicines. Canada faces demographic changes that will increase
the pressure on publicly and privately funded health-care services. Therefore, policies to
increase the use of generic prescription medicines in Canada are key to ensuring the ongoing
sustainability of drug benefit plans and broader health-care services.
These policies include:
- Intellectual property regimes that are fair and balanced
for all stakeholders, including payers and generic
pharmaceutical manufacturers.
- Timely national (Health Canada) review and approval
of new generic pharmaceutical products.
- Timely (e.g. monthly) listing of generic pharmaceutical
products on provincial drug plan formularies following
Health Canada approval.
- Changes to the design of both public and private
sector drug benefit plans to ensure maximization of
cost-saving generic medicines.
- Careful, unbiased, clinical evaluation of the costeffectiveness
of new, patented medicines to ensure
they provide therapeutic improvement to patients and
not just higher costs.
