Quebec move on drug bids ‘one to watch’ as private plans expected to benefit

Quebec’s long-awaited move to ask drug manufacturers to bid for exclusive supply contracts for generic prescription drugs should help private benefit plans, according to an expert on drug pricing.

“I expect private plans to benefit [from this move],” says John-Paul Dowson, managing director at Roubaix Strategies Inc. That’s because, according to Dowson, Quebec law prevents selling drugs at different price points to public and private plans.

The comments follow a report in the Globe and Mail today that the Quebec government will centralize drug purchases under one bid for any generic drug that has at least three competing manufacturers. The chosen provider will receive a three-year exclusive contract with the government.

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Beyond the financial implications, there are other questions, Dowson notes. While the Globe story suggested Quebec’s move means pharmacists will no longer be able to offer a range of generic drugs, Dowson wonders whether the restriction will also apply to private plans. Will the changes restrict members of private plans to the one drug or will they be able to choose from several medications but only claim reimbursement according to the price of the generic product that won the exclusivity contract from the government?

Quebec has been considering the reform for many years and passed enabling legislation last June. It’s the first province in Canada to institute a bidding system for generic drugs at such a large scale.

According to the Globe, the Quebec Ministry of Health and Social Services also sent a letter on Tuesday informing the federal Competition Bureau of the matter. A source told the newspaper the government plans to start the bidding process this week. According to the Globe report, business analysts anticipate the province could save 25 per cent to 35 per cent on its $800-million bill for generic drugs if the system is successful.

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“Quebec has a unique pharmaceutical market, and this is one to watch,” says Dowson, adding that since the government is such a major player, the move will have significant implications for the industry.