Healthy Skepticism Library item: 18363

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Taylor L
Quebec to slash generic drug prices
Pharma Times 2010 July 1
http://www.pharmatimes.com/WorldNews/article.aspx?id=18125

Full text:

Quebec is set to become Canada’s second province to cut the prices of generic drugs, by a forecast 25%.

The province’s regulations require it to pay the lowest generic prices available in Canada; therefore, following the 25% price cut implemented in Ontario, Quebec is obliged to reduce prices by a similar level, Health Minister Yves Bolduc said yesterday.

Pharmacy owners responded angrily, claiming that they had not been consulted before the decision was announced nor that any assistance had been offered similar to the C$224 million annual investment in pharmacies pledged by the Ontario government in return for the cuts, and industry spokesmen suggested that “a re-assessment” of investment projects by generic drugmakers in Quebec was now likely.

Discussions between drugmakers, pharmacy owners and health officials on the price cuts are expected to take place in the third quarter of the year.

From today (July 1), the province of Ontario has eliminated the C$750 million professional allowance fees – paid by generic drugmakers to pharmacies to stock their products – on government-purchased drugs, and they will be phased out over three years for people who buy their medications out-of-pocket.

Earlier this month, Health Minister Deb Matthews said that the price of generic drugs for all Ontarians would fall from July 1 and that for people who pay cash, the percentage of a branded drug’s price which they pay for the generic version would go down from about 65% to 50%. Ms Matthews has written to all Canada’s provincial health ministers, urging them to agree a nationally coordinated strategy to get prices down.

Meantime, the Health Council of Canada has published a public discussion paper examining “the complex reasons” why Canadians pay some of the highest prices of the world for generic drugs and “the long-standing lack of transparency about how prices are set.”

Through their own health plans, Canada’s provincial governments have traditionally set the price for generics, but their pricing policies have – consciously or otherwise – produced a system that does not get the best price for the taxpayer or for private-sector employers, according to the Council.

The Council’s discussion paper offers the following the following six basic suggestions for improvement: – drug insurance plans could revisit their maximum reimbursement prices, given that “a body of evidence” suggests that Canadian prices are too high; – reimbursement prices could be set at the pharmacy level; – the use of alternative and competing distribution channels could be encouraged; – using the pharmacist to provide additional paid services would moderate the impact of reducing generic drug prices and benefit the healthcare system; – drug plans, including employer-sponsored plans, could use tiered formularies to encourage their beneficiaries to use low-cost drugs; and – provincial and territorial drug plans could ensure that newly approved drugs are listed on their formularies in a timely manner.

“The current way governments and others set generic prices leaves ‘too much money’ with manufacturers, distributors and retailers that otherwise could create savings for the taxpayer or be used in other areas of healthcare,” it says, but adds that it is encouraged by the recent provincial initiatives to tackle generic prices which, according to some estimates, could save taxpayers, consumers and businesses as much as C$800 million a year.