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Savings from Pan-Canadian Generic Medicines Initiative

Reductions in Canadian Prices Have Exceeded Declines in All Other Foreign Markets

Toronto, February 9, 2016 – A new report released today by the federal government’s Patented Medicine Prices Review Board (PMPRB) highlights the success achieved by Canada’s provincial and territorial governments through their agreement with the Canadian Generic Pharmaceutical Association (CGPA).

“Today’s report confirms that the National Generic Tiered Pricing Framework has been a success for jurisdictions participating in the pan-Canadian Pharmaceutical Alliance, and, in fact, all Canadians who pay for prescription medicines,” said Jim Keon, President of CGPA. “Even though the timeframe of the report does not capture the full impact of the Framework, the interim results are clear and obvious.”

The PMPRB’s Generics 360 Report shows that, as of 2014, reductions in the retail or reimbursed prices of generic prescription medicines in Canada have exceeded the declines in all other foreign markets.

The current National Tiered Pricing Framework agreement reached between CGPA and provinces and territories participating in the pan-Canadian Pharmaceutical Alliance (pCPA), which extends to March 31, 2017, includes price reductions on top-selling generic prescription medicines in Canada. Based on prescription drug sales data from IMS Health, CGPA estimates that total savings from the Framework will be approximately $1.6-billion over the term of the agreement.

“These results are important given that total annual retail or reimbursed generic prescription drug sales in Canada are $5.4-billion while annual sales for brand-name drugs are $19-billion,” Keon said. “In addition, when viewed from an international perspective, Canada is a small market with high costs and barriers to market entry when viewed in context with the countries against which Canadian prices are compared.”

According to data from IMS Health, while generic medicines are dispensed to fill more than 68 percent of all prescriptions in Canada, they account for only 22 percent of the $24.4-billion Canadians spend annually on prescription medicines.

Keon said that, not only has the Framework provided enormous savings to the Canadian health- care system, it has fostered greater pan-Canadian cooperation and, despite the strain on the generic pharmaceutical supply chain in Canada, helped bring much-needed stability and predictability for manufacturers attempting to bring cost-saving generic pharmaceutical products to the Canadian market.

Keon also cautioned about the pursuit of risky pricing schemes such as tendering in Canada. Research has shown that tendering schemes can put the current and future supply of generic pharmaceutical products at risk. Experience in Canada and other markets has demonstrated that tendering for pharmaceuticals can contribute to drug shortages by eliminating competition for certain products.

“Significant progress has been made through the National Generic Tiered Pricing Framework for generic medicines. We are committed to continuing to work cooperatively through pCPA to improve prescription drug coverage for Canadians,” said Keon.

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 more than 76 percent of all prescriptions but account for account for less than 22 percent of the $41.5-billion Canadians spend annually on prescription medicines.

For more information, please contact :

Jeff Connell,
Vice President, Corporate Affairs

Tel: (647) 274-3379