Generic drug deal hailed for price cuts of up to 40% for public, private plans

The pan-Canadian Pharmaceutical Alliance and the Canadian Generic Pharmaceutical Association have reached a deal aimed at reducing the prices for some generic drugs by as much as 40 per cent.

While the parties are touting significant savings for Canada’s public drug plans, they also say employers and patients will benefit from price reductions of 25 to 40 per cent, as of April 1, 2018, for 70 of the most commonly prescribed drugs in Canada. As part of the deal, the participating drug programs won’t pursue tendering over the five-year term.

“This is wonderful news, and we’re especially pleased that these discounts will continue to apply to employer-sponsored plans to the benefit of all working Canadians,” said Stephen Frank, president and chief executive officer of the Canadian Life and Health Insurance Association.

“This agreement will reduce costs in the system and help ensure that employers will be able to continue to afford their employee supplementary benefit plans,” he added.

More than 70 per cent of all prescriptions reimbursed under Canada’s public drug plans are generic drugs, a news release from the alliance noted.

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Previous joint efforts by the alliance, which negotiates prices for federal and provincial drug programs, and the Canadian Generic Pharmaceutical Association have already saved participating plans more than $1 billion over the past five years and continue to deliver savings of $250 million annually, according to the news release. The new joint plan will build on that to save a projected $385 million more in the first year and as much as $3 billion over the next five years through price reductions and the launch of new generic drugs.

Eric Hoskins, Ontario’s minister of health and long-term care, said the plan marks a significant milestone in the collaborative undertaken by provincial and territorial governments to reduce the cost of prescription drugs in Canada.

“With generic drugs currently comprising more than 70 per cent of all prescriptions reimbursed under public drug plans, this initiative is a major step forward in terms of increasing price stability, consistency and predictability,” said Hoskins, who also called for a national pharmacare strategy.

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“Canada is the only industrialized country with universal health care but no national pharmacare strategy. Pharmacare would provide a cohesive, national approach for drug coverage, while increasing affordability for governments and providing equitable access to medications for Canadians.”

For its part, the CLHIA, in a statement, congratulated the alliance and the generic drug association for their co-operation on the latest deal and said it believes partnership agreements between the government and the private sector are the best way of ensuring the affordability of prescription drugs. Ontario, meanwhile, already moved to introduce pharmacare coverage for youth under age 25. According to a news release from the provincial government on Monday, the number of prescriptions filled since the program’s launch on Jan. 1 has exceeded 950,000.

The latest deal between the alliance and the generic drug association effectively adds a lower tier to its current framework for generic drug prices. Under the current setup, prices for certain molecules are as low as 15 per cent of the brand-name equivalent. Under the new deal, prices for a limited number of molecules will be as low as 10 per cent of the brand equivalent, while a number of additional drugs will fall under the 18 per cent tier as of April 1. As an example of the price cuts, the drug quetiapine, which treats certain mental-health conditions, will fall under the 10 per cent tier as of April 1. Currently, it falls under the 18 per cent tier.

To see the list of drugs affected, see the Saskatchewan formulary’s website.