Ontarians shocked to find some generic prices have risen

But, the new drug pricing rules weren’t meant to apply to all generic drugs. For example, older generic products that have been on the formulary for more than five years or products where there may no longer be a reference brand product on the market are not subject to pricing changes, explains Mike Sullivan, president of Cubic Health Inc. “There are also cases where some generics are single-source meaning that only one generic company may be making that product. As such, their products are not subject to new pricing rules and they effectively have the ability to increase prices if they see fit.”

Sullivan also points out that the cost to manufacturer some older generic products that are also very low volume (i.e. very infrequently prescribed) can be higher since there aren’t economies of scale. “Factors like this have contributed to increases in drug prices for some generics,” he says, adding that most of the top generic products that dominate generic volumes (venlafaxine, pantoprazole, lansoprazole, rabeprazole, ramipril,atorvastatin, etc.) have all seen price reductions.

Ivan Langrish, a spokesperson for the Minister of Health, was quoted in the Toronto Sun saying that the government price restraints apply only to generic drugs listed on the ODB formulary and some drugs that come in sprays or cream form may be exempted from the price controls because they cost more to manufacture. The price of ODB-listed generic drugs for private payers will gradually decrease to match that of the ODB by 2012.

Meanwhile, the seemingly erratic changes have created a lot of confusion in the marketplace and pharmacists are stuck trying to explain the price discrepancies to consumers.