Atlantic Canadians to Save $560-Million Through Unprecedented Three-Year Pan-Canadian Agreement on Generic Prescription Medicines
New Framework Provides More Predictable, Stable Environment for Payers and Manufacturers
CHARLOTTETOWN, Oct. 30, 2014 /CNW/ - Atlantic Canadians will save an estimated $560-million through an unprecedented three-year agreement reached between Canada's provinces and territories and the generic pharmaceutical industry, Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA), said today.
Mr. Keon made the comments while speaking at the Atlantic Summit on Healthcare and Drug Cost Sustainability in Charlottetown, which is being hosted by the Public Policy Forum and sponsored by the four Atlantic provincial governments.
"This national framework provides enormous additional savings to the health-care system without further jeopardizing the supply of cost-saving generic pharmaceutical products and the services provided by pharmacists in neighbourhood pharmacies across Canada," Keon said. "This agreement is an important benchmark in our efforts to establish a stable, predictable and sustainable environment for the development and production of cost-saving generic pharmaceutical products."
Over the term of the agreement, which has an effective date of April 1, 2014, 18 top-selling, high-volume generic prescription medicines will have their prices reduced to 18 percent of the price of the equivalent brand-name drugs across Canada. The first 10 generic products alone make up approximately 30 percent of the Canadian generic prescription drug market. The agreement also establishes pricing levels for the various types of generic pharmaceutical products in Canada, as well as new and future generic products. The savings will be shared among public and employer-sponsored drug benefit plans, as well as those Canadians who pay for their prescriptions out of pocket.
In Atlantic Canada, generic prescription medicines are dispensed to fill fully two-thirds all prescriptions yet account for only 28 percent of the $1.7-billion spent annually on prescription medicines. In Atlantic Canada, the average price of a brand-name prescription is about $99.00 while the average price of a generic prescription is less than $33.00. From 2006 to 2013, retail or reimbursed prices of generic medicines in Atlantic Canada have plunged more than 90 percent. These price reductions have saved an additional $400-million.
In reaching the agreement, CGPA and provincial and territorial governments reviewed international pricing data and compared various aspects of the Canadian market versus other countries, such as the legal and regulatory environment, drug patent systems, and other costs. While Canada is a relatively small market, the costs and barriers to entering this market are very high. The international data also showed that countries, such as New Zealand, that employ a tendering model for prescription drugs also have fewer products available for patients. In the end, the studies showed that 18 percent pricing in Canada for high-volume, multi-source generic drugs is not unreasonable.
"It is our hope that this agreement will help stabilize the pricing environment in Canada and ensure that cost-saving generic prescription medicines will continue to be available and, in future, manufacturers will be able to invest in developing and bringing new generic medicines to Canadians," said Keon.
Keon said that now that prices have been dramatically reduced, changes must be made to take full advantage of the available savings. In the United States, for example, generic prescription medicines are dispensed to fill 86 percent of all prescriptions. If the use of generic drugs in Atlantic Canada matched levels in the United States, the health-care system would have saved an estimated additional $443-million in 2013. For every one percent increase in the use of generic drugs, Atlantic Canadians save an additional $22-million
About the Canadian Generic Pharmaceutical Association
The Canadian Generic Pharmaceutical Association (CGPA) represents Canada's generic pharmaceutical industry. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to fill 67 per cent of all prescriptions but account for only 23 percent of the $23-billion Canadians spend annually on prescription medicines.
SOURCE: Canadian Generic Pharmaceutical Association
For further information: Jeff Connell, Vice President, Corporate Affairs, Canadian Generic Pharmaceutical Association (CGPA), Tel: (416) 223-2333, Mobile: (647) 274-3379, Email: [email protected], Website: www.canadiangenerics.ca
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