Canadian Competition Bureau Finds Generic Drugs could be Cheaper

On September 28, 2006, in response to several studies that found the price of prescription drugs to be high in Canada when compared with other countries, the Canadian Competition Bureau (Bureau) undertook an investigation of the generic drug sector. In its Generic Drug Sector Study dated October 29, 2007 (sub-titled "Canadians Could Be Paying Less For Generic Drugs"), the Bureau found that generic manufacturing has become more competitive over the past 15 years, with generic manufacturers offering rebates and allowances to pharmacies in order to convince them to stock their products. However, the rebates and allowances were found not to be reflected in the amounts paid for drugs by the public or private drug plans or by consumers. The Bureau determined that shifting the focus of competition in the generic drug sector from pharmacies to public and private insurers and consumers could provide Canadians with larger savings. The Bureau generated a number of ideas that could help to accomplish this goal, including: providing manufacturers with incentives to compete to be listed on provincial and private plan lists of drugs that will be reimbursed; making generic manufacturers compete in bidding processes to determine which versions of generic drugs will be dispensed at pharmacies; in-depth monitoring of the net prices paid by pharmacists for generic drugs to ensure that the prices paid by consumers reflects the rebates given to pharmacies; and an increased role for private plans in obtaining lower prices for their customers. The Competition Bureau is continuing its investigative work in the generic drug sector. For the full text of the article, see: http://tinyurl.com/33ujug For a list of international health papers on similar topics on the OECD web site, visit: http://tinyurl.com/2mq7j4 Summary by: Heather Watts