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Statement from Canadian Generic Pharmaceutical Association (CGPA) Regarding PMPRB Report “Generic Drugs in Canada, 2013”

Toronto, December 11, 2014 – The following is a statement from Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA), regarding the report “Generic Drugs in Canada, 2013”, released today by the Patented Medicine Prices Review Board (PMPRB).

“The pricing information contained in the report “Generic Drugs in Canada, 2013” released today by the Patented Medicine Prices Review Board (PMPRB) does not reflect current prices for generic prescription medicines in Canada.

The data used to compare international prices of generic prescription medicines in today’s report is from the first quarter of 2013, prior to the massive reductions to retail or reimbursed prices of generic drugs implemented through various provincial reforms and, most notably, across Canada through the National Pricing Framework agreement reached between the Council of the Federation (CoF) and CGPA. In fact, data from the report released today informed the discussions that occurred last year between CoF and CGPA, which resulted in the CoF/CGPA National Pricing Framework.

As part of the CoF/CGPA National Framework, beginning in April 1, 2013 prices of the top-selling generic prescription medicines are being reduced by nearly 50 percent in some Canadian jurisdictions. To date, prices of generic drugs that make up approximately 30 percent of all generic drug sales in Canada have been cut to 18 percent of the equivalent brand-name price. Further price reductions to additional top-selling generic prescription medicines will be implemented in April 2015 and April 2016.

CGPA and its member companies look forward to continuing to work with Canada’s provinces and territories to successfully implement the National Pricing Framework.

As a result of provincial drug plan reforms and the CoF/CGPA National Pricing Framework, the utilization of generic prescription medicines is increasing while total spending on generic drugs is actually declining. In 2010, generic drugs were dispensed to fill 58 percent of all prescriptions. In 2014 that figure increased to 67 percent. During the same period of time, spending on generic prescription medicines declined from $5.7-billion to $5.2-billion.

From 2006 to 2013, retail or reimbursed prices of generic prescription medicines in Canada have plunged more than 90 percent. As the PMPRB report notes, the available data sources are estimated factory-gate prices and do not necessarily reflect the net revenue to manufacturers.

Generic medicines are dispensed to fill fully 67 percent of all prescriptions yet account for only 23 percent of the $23-billion Canadians spend annually on prescription medicines. In Canada, generic prescription drugs save Canada’s health-care system approximately $13-billion annually.

Today’s PMPRB report reveals that Australia, which is the country with the most similar barriers and costs to market entry to Canada’s of all comparator countries, also had generic prices that are more than 30 percent higher than in Canada, even prior to the massive price cuts being implemented nationally as of April 2013.

The report also shows that New Zealand, a country that employs a tendering model for prescription drugs, had the fewest number of comparator products of all countries, pointing to fewer treatment choices for prescribers and patients.

Now that prices have been dramatically reduced, changes must be made to take full advantage of the available savings. In the United States, for example, generic prescription medicines are dispensed to fill 86 percent of all prescriptions. If the use of generic drugs in Canada matched levels in the United States, Canada’s health-care system would have saved an estimated additional $6.6-billion in 2013. For every one percent increase in the use of generic drugs, Canadians save an additional $330-million.”

About the Canadian Generic Pharmaceutical Association
The Canadian Generic Pharmaceutical Association (CGPA) represents Canada’s generic pharmaceutical industry. The industry plays an important role in controlling health-care costs in Canada. Generic drugs are dispensed to fill 67 per cent of all prescriptions but account for only 23 percent of the $23-billion Canadians spend annually on prescription medicines.

For more information, please contact

Jeff Connell
Vice President, Corporate Affairs
Canadian Generic Pharmaceutical Association (CGPA)
Tel: (416) 223-2333
Mobile: (647) 274-3379
Email: jeff@canadiangenerics.ca
Website: www.canadiangenerics.ca