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Retail Prices of Generic Drugs Reduced Dramatically in Canada

Focus for Public and Private Drug Plans Must Now Turn to Increased Generic Utilization

Toronto, December 15, 2010 – Now that retail prices for generic prescription medicines have been dramatically reduced across Canada, public and private drug plans must take advantage of these savings by increasing their use of cost-saving generics, Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA), said in response to new reports released today by the Patented Medicine Prices Review Board (PMPRB).

“The PMPRB’s reports are based on sales data from 2007, prior to the significant reductions in retail or reimbursed generic drug prices that have occurred in more than 90 percent of the Canadian market,” said Keon. “There is little value in publishing sales data that is three-years old.”

Keon pointed out that retail prices for the vast majority of generic prescription drugs are being cut in half in the provinces of Ontario and Quebec, which account for more than 60 percent of the Canadian pharmaceutical market. 

“As retail or reimbursed prices for generic prescription drugs are being dramatically reduced for both private and public payers across Canada, the potential savings through greater use of generic prescription have never been greater,” Keon said.
 
When Health Canada approves generic drugs as safe and effective as their brand-name equivalents, those who pay for prescription drugs in Canada are provided enormous cost savings. According to ims brogan, the leading source for prescription drug sales information, generic drugs are dispensed to fill fully 57 percent of all prescriptions in Canada, yet account for only 25 percent of the $23-billion spent annually on prescription drugs in Canada. Again according to ims brogan, the average price of a brand-name prescription is $67 while the average price of a generic prescription is $26.
 
“As these figures highlight, generic drugs are providing excellent value for Canadians, and those savings are increasing. In fact, generic drugs are the only component of Canadian health care where costs are actually decreasing.” said Keon. “As prices come down, the next step for ensuring the viability of drug benefit plans is examining drug utilization.”

The use of generic drugs by provincial drug plans in Canada is considerably higher than generic drug use by private sector payers. Data from ims brogan shows that generic drugs are dispensed to fill more than 60 percent of prescriptions paid for by public drug programs but only 47 percent of private sector prescriptions.

In the United States market, which is dominated by private payers, generic drugs are dispensed to fill fully 75 percent of all prescriptions. If generic utilization in Canada increased to levels in the United States, private sector payers would save an additional $1-billion in the first year alone.

“While the reasons for these discrepancies are not entirely clear, the benefits of understanding and overcoming them are obvious,” Keon said.

In June 2010, the Health Council of Canada released its report Generic Drug Pricing and Access in Canada: What are the Implications? The report offers several options for all payers to increase savings through more efficient use of generics including, developing appropriate prescribing incentives and protocols, creating more stringent interchangeability laws and adopting tiered formularies.

For more information, please contact:

Jeff Connell
Director of Public Affairs
Canadian Generic Pharmaceutical Association (CGPA)
Tel: (416) 223-2333
Mobile: (647) 274-3379
Email: jeff@canadiangenerics.ca

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	Retail Prices of Generic Drugs Reduced Dramatically in Canada
	Retail Prices of Generic Drugs Reduced Dramatically in Canada