News Releases

Generics Table Five-Point Plan for Drug-Cost Savings

Ottawa, November 4, 2003 – Canadian generic drug makers today unveiled a five-point plan to save Canada's health-care system hundreds of millions of dollars annually in the cost of prescription medicines.

Representatives of the Canadian Generic Pharmaceutical Association (CGPA) told the House of Commons Standing Committee on Health that the current legal and regulatory regime for generic drug makers in Canada is preventing the industry from making its full contribution to the country's health-care system and its economy.

Representatives of the Canadian Generic Pharmaceutical Association (CGPA) told the House of Commons Standing Committee on Health that generic drug makers make a greater contribution to affordable health care than any other industry, but that the current legal and regulatory regime limits its contribution and threatens its very existence.

“Today, Canadians and their elected representatives face fundamental questions about the affordability and sustainability of publicly funded health care,” said CGPA Vice-Chair Allan Oberman. “Even as these questions become more urgent, Canada's generic drug makers are fighting for survival in a legal and regulatory environment that limits their ability to provide cost-saving medicines to Canadians and restricts the industry's growth, investment and job creation in Canada.”

Oberman said that, after 50 years of the generic pharmaceutical industry's presence in Canada, the time has come to reach a new deal with Canadians and their governments that will save the health-care system billions of dollars while securing the future of the country's generic drug makers.

“The proposals we have outlined today will achieve two important results,” said Jim Keon, President of the CGPA. “They will substantially reduce Canada's prescription drug expenditures, and they will create a climate where generic pharmaceutical makers can increase their investment in the Canadian economy.”

The CGPA's five-point plan for health-care savings

Proposal One: Eliminating the Automatic Injunction under the Patented Medicines (Notice of Compliance) Regulations of Canada's Patent Act to stop legal battles that keep generic drugs off the market even after original 20-year patents expire.

Proposal Two: Increasing resources at Health Canada to reduce the time needed to properly review generic pharmaceutical products.

Proposal Three: Shortening the time it takes for the provinces to add generic drugs to their drug-plan formularies after they have been approved by Health Canada.

Proposal Four: Instituting Off-Formulary Interchangeability in Ontario to allow easier access to less-costly prescription drugs for employer-sponsored drug plans and those Ontarians who pay for prescriptions out-of-pocket.

Proposal Five: Eliminating Quebec's 15-year rule to take full advantage of the cost savings from generic drugs.

During his remarks to the Committee, Oberman pointed to data from IMS HEALTH, the leading source for prescription drug sales data, which shows that between 1997 and 2003, spending on prescription drugs in Canada rose from $6.8 billion to approximately $14 billion.

Most health-care experts believe it is a trend that will continue to grow as the population ages, as expensive, new medicines replace existing ones, and as drug treatments form a larger part of patient care.

“As prescription drug expenditures continue to consume an ever-increasing share of health-care dollars, the demand for high quality, low-cost prescription drugs will increase,” he said. “The question is: Will Canada's generic drug makers be allowed to meet that demand, deliver billions of dollars in savings, and make their full contribution to the country's health-care system and its economy?”

Quick Facts About Prescription Drug Spending in Canada (source: IMS HEALTH)

• Generic drugs fill 40.4% of all prescriptions in Canada, yet generics account for only 14.2% of Canada's $13.9 billion annual prescription drug expenditure.
• The average cost of a brand-name prescription has increased by 76% from $31.52 in 1992 to $55.56 in 2002. During the same period of time, the average cost of a generic prescription increased from about $16.35 to $21.57, or 32%.
• The 28 top-selling generic drugs common to both countries are priced, on average, 28% less in Canada than in the United Sates.

About the Canadian Generic Pharmaceutical Association

The Canadian Generic Pharmaceutical Association represents Canada's generic drug industry – a dynamic group of companies that specialize in the production of high quality, affordable generic drugs and fine chemicals and in conducting the clinical trials required for government approval of generic drugs. It plays an important role in helping control overall health-care costs by keeping the cost of medications down: generic drugs are priced, on average, 45% less than their brand-name equivalents.

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