Provinces reach deal to save on 6 generic drugs
Premiers say agreement will cut costs by $100M on common drugs
By Susan Lunn, CBC News
Posted: Jan 18, 2013 2:36 PM ET
Last Updated: Jan 18, 2013 3:38 PM ET
Provinces and territories will start paying less for six widely used generic drugs after April 1, under a new agreement reached by the Council of the Federation's Health Care Innovation Working Group.
It's the first tangible result to emerge from the group co-chaired by Saskatchewan Premier Brad Wall and Prince Edward Island Premier Robert Ghiz, which began work a year ago with the goal of finding ways the provinces could save health care dollars without federal help.
"Because provinces were not coming together to bulk purchase, Canadians were paying more for generic drugs than other people around the world. And that's why we need to work together wherever we can," Wall said in a joint interview with Ghiz airing Saturday on CBC Radio's The House with host Evan Solomon.
Provinces currently pay anywhere from 25 to 40 per cent of the brand-name price for the six medications, depending on what each jurisdiction negotiates with the generic-drug producer.
Using a more co-ordinated national approach, provinces will pay less — only 18 per cent — starting this April, saving provincial drug plans as much as $100 million. According to the premier's office, it could save $10 million in Saskatchewan alone.
Ghiz told Solomon while only some of the savings will be reinvested in health care, this deal will help the system in the long term.
"This is allowing us to find dollars so we can continue to make health care sustainable in our country," he said.
Generic industry disappointed by price cut
The six drugs covered in this agreement treat common ailments such as heart disease, depression and gastrointestinal conditions.
In other jurisdictions, generic drug purchases are put out to tender, which can lower prices further.
In an emailed statement, Jim Keon, the president of the Canadian Generic Pharmaceutical Association, said his organization was pleased that the provinces took the bulk-purchasing route instead.
"Tendering for generic drugs could result in drug shortages and delayed savings to Canada's health-care system," he wrote.
"We are, however, disappointed by the provincial governments' announcement of further cuts to retail or reimbursed prices for generic prescription medicines," he said, adding that generic prices already had been "dramatically reduced" across Canada in recent years.
"Some of these price reductions have not yet been fully implemented and the full impact not yet known," Keon said.
The Canadian Medical Association said Friday's agreement is a good first step, but more needs to be done.
"It doesn't really replace an overall pharmacare strategy for the country that would cover a very broad range of prescription drugs," said the CMA's chair, Dr. Anna Reid.
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