A new study shows Canada pays more than double for common generic drugs compared to other developed countries. Generic drugs are drugs manufactured after the initial patent on a drug has expired. In Canada, drug programs are administered at the provincial level.
Ontario health critics have called for a review of the purchasing system for the drugs in the wake of the study, published Tuesday.
“We’ve known for a long time that this needs to be changed, but the political will for change has never been there,” said Ontario NDP health critic France Gélinas.
The study, published by Ottawa-based researchers in the journal Open Medicine, found that through a combination of negotiations with drug companies and calls for tender, countries such as New Zealand, the United Kingdom and Germany pay much less than Canada for six common generic drugs.
The provinces and territories, excluding Quebec, adopted a new purchasing plan on April 1, 2013. It sets the price for the six drugs at 18 per cent of the price of the brand-name versions. The premiers said at the time the move would save up to $100 million a year.
Study author Amir Attaran, an expert in drug policy at the University of Ottawa, said the provincial governments have definitely saved money with the new plan, but could be saving a lot more. He called the model a “uniquely Canadian stupidity.”
The six generic drugs are amlodipine, atorvastatin, omeprazole, rabeprazole, ramipril and venlafaxine. They treat everything from high blood pressure to depression.
“We’re obviously not getting best value for Ontario taxpayers and something needs to change,” said Ontaario Progressive Conservative health critic Christine Elliott. “There’s no reason Canadian provinces should be paying double (the price paid by) other countries with the same purchasing power.”
The study said there is no clear rationale for why the premiers chose the 18-per-cent threshold, instead of going with an approach similar to that of other countries. “
The initiative for the 18-per-cent mark was led by Saskatchewan Premier Brad Wall and Prince Edward Island Premier Robert Ghiz, and adopted by the premiers at their July 2012 Council of the Federation meeting.
So who is opposing the tendering process that the study’s respected authors say would cut generic drug costs dramatically – ultimately by as much one-half?
The answer is simple: pharmacies, but more importantly, Canada’s generic drug manufacturers led by their lobby organization: the Canadian Generic Pharmaceutical Association (CGPA) .
Generic drug companies often present themselves as a modern-day Robin Hood: taking from brand name drug companies, and passing the spoils on to Canadians. Recently, the CGPA paid for a report on the “risks” associated with ‘tendering’ to achieve lower generic drug prices.
Lower generic drug prices mean tighter margins for pharmacies and generic manufacturers, so the CGPA opposition to tendering comes as no surprise. But the truth of the matter is that their objections are largely self-serving. Ironically, the CGPA report authors, Aidan Hollis and Paul Grootendorst, are on the record supporting tendering. In a 2011 report that wasn’t paid for by the generic drug industry they stated, “We recommend continued experimentation with tenders for generic drugs”.
Our pricing system for generic drugs is fundamentally broken. Canadians need access to generic drugs at fair prices, not manufactured anxiety based on one-sided arguments presented in studies paid for by the generic drug industry.
In addition to pointing to the need of shorter-term solutions like tendering, the current controversy over generic drug prices clearly points to the need for a national pharmacare program. Canada remains the only industrialized country with universal health insurance but no national pharmacare program for its citizens.
The most comprehensive study on drug affordability estimates one in ten Canadians can’t fill their prescriptions because of the cost. And the financial burden of paying for Canadian families is considerable as almost a fifth of Canadian drug spending is ‘out-of-pocket’.
The federal government needs to join the provinces and territories by committing itself to a national pharmacare program that would provide access to prescription drugs for all Canadians. A recently released report, A Roadmap to a Rational Pharmacare Policy in Canada, suggests that such a national approach would lead to potential savings of up to $11.4-billion every year. In addition to the economic benefits, pharmacare would help ensure access to essential prescribed medications, particularly for those who are most in need and least able to pay.
The fact of the matter is that just as access to a family doctor or emergency department is crucial, access to drugs should be a fundamental right of Canadians.
And the time for our governments to act is now!