National Pharmaceuticals Strategy Report: Concern about Generic Drug Prices in Canada

Provincial and Territorial governments released the National Pharmaceuticals Strategy Progress Report (Progress Report) on September 21, 2006. Drafted cooperatively by the federal, provincial and territorial (FPT) governments, the Progress Report recommends a multi-year strategy to improve access to drugs and ensure their affordability, and to encourage the sustainability of the public health care system. Quebec chose not to participate in the process and will maintain its own pharmacare program. One focus of the report is the pricing of generic drugs. While patented medicines are regulated in Canada by the Patented Medicines Price Review Board (PMPRB), the pricing of generic drugs is left to market forces. FPT governments have recently become concerned with a lack of international parity in generic drugs pricing. As a result, with the consent of the Health Ministers, the PMPRB, which has no regulatory jurisdiction over non-patented drugs, is now monitoring international non-prescription drug pricing. A report released by the Board in July of this year, noted that Canadian generic drug prices exceed those in 11 comparator countries, including the United States. Even though the PMPRB is now monitoring generic prices, it seems that generic drug pricing will remain outside the regulatory reach of the PMPRB and any other body. The Progress Report prefers a non-regulated, business-management approach to generic drug pricing, but suggests if the lack of parity continues, regulation should be considered. The non-regulated approach calls for coordination to capitalize on the collective purchasing power of FPT governments and the continued examination of rebate and marketing-conduct issues within the generic supply chain. Presumably the general effect of the Progress Report and of the publicity surrounding it will exert downward pressure on generic drug prices. However, the Progress Report was not without good news for generic manufacturers because it highlighted the need to accelerate access to non-patented drugs. One possible outcome is that generics may get to market quicker and, potentially, at a lower price. For a copy of the Progress Report, see: http://www.hc-sc.gc.ca/hcs-sss/pubs/care-soins/2006-nps-snpp/index_e.html Summary by: Michael Migus