CCGPA Statement Regarding PMPRB Analytical Snapshot Comparing International Generic Drug Prices

Toronto, August 29, 2013 Jim Keon, President of the Canadian Generic Pharmaceutical Association (CGPA), today made the following statement regarding the Analytical Snapshot comparing international generic drug prices released on August 28, 2013 by the Patented Medicine Prices Review Board (PMPRB):.

“The Analytical Snapshot comparing international generic drug prices released yesterday by the PMPRB does not reflect current reimbursed or retail prices of generic prescription medicines in Canada, or the differences in the pharmaceutical regulatory regimes and marketing practices between various countries.

Data used for the PMPRB’s report is from 2008 to the first quarter of 2011, which does not capture the significant reductions in reimbursed or retail prices that have occurred across Canada since that time. These reductions include the April 2013 pan-Canadian deep price cuts to the six top-selling generic drugs in Canada, which comprise fully 20 percent of the Canadian market. The PMPRB report also notes that between 2008 and the first quarter of 2011, Canadian prices for many generic drugs decreased by up to 30 percent, widening the gap between generic and brand-name prices.

Achieving ‘apples-to-apples’ comparisons of international prices of prescription medicines is a difficult and complicated undertaking. As the PMPRB notes, differences in regulations, marketing practices and reimbursement policies create significant challenges for international price comparisons and should be considered in interpreting the results of these reports.

For example, studies conducted to date comparing generic prices in Canada with other countries measure manufacturers’ ex-factory prices only. These prices do not reflect total cost to payers in each market. The Canadian prices used for these studies also do not reflect manufacturers’ net prices; only the reimbursed or retail prices. In Canada, retail or reimbursed prices include significant support for the services that community pharmacies provide to patients. In other countries such as the United Sates, retailers purchase products from manufacturers then mark-up prices to sustainable levels. This is not, however, the Canadian model.

At current prices, generic prescription drugs account for less than three percent of total health-care spending in Canada, which is even less than what is spent on health-care administration. Of the 565 million prescriptions filled in Canada, more than 65 percent of them were filled using generic drugs yet the cost of these generic medicines represented only 24% of the $22 billion dollars Canadians spend annually on prescription drugs.

The use of generic prescription medicines saves Canada’s health-care system approximately $11-billion annually. In fact, for every one percent increase in the use of generic drugs in Canada, Canadians save an additional $298-million. In the United States generic drugs are dispensed to fill 84 percent of all prescriptions. If the use of generic drugs in Canada increased to American levels, Canada’s health-care system would have saved an additional $6-billion in 2012.

The ongoing sustainability of drug benefit plans in Canada is highly dependent on the use of generic prescription medicines. Policies to increase the use of generic prescription medicines in Canada are essential for ensuring the ongoing sustainability of drug benefit plans and the broader health-care services upon which Canadians rely. These policies include:

  • Intellectual property regimes that are fair and balanced for all stakeholders, including payers and generic pharmaceutical manufacturers
  • Meaningful incentives for generic pharmaceutical manufacturers to make the investments and assume the significant risks required to bring new, cost-saving prescription medicines to market
  • Timely national (Health Canada) review and approval of new generic pharmaceutical products
  • Timely listing of generic pharmaceutical products on provincial drug plan formularies following Health Canada approval
  • Changes to the design of both public and private sector drug benefit plans to ensure maximization of the use of cost-saving generic medicines
  • Careful, unbiased, clinical evaluation of the cost effectiveness of new, patented medicines to ensure they provide therapeutic improvement to patients, and not just higher costs
  • Increasing generic drug use to levels in other countries, such as the United States

The Canadian generic pharmaceutical industry, along with our partners in the pharmacy sector, pharmacists and pharmaceutical distributors, looks forward to continuing to work with regulators and payers – both public and private sector – to ensure the ongoing sustainability of our industry, and the continued availability of high-quality, cost-saving generic pharmaceutical products in Canada.”

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 65 per cent of all prescriptions but account for only 24 per cent of the $22-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