Provinces reach a deal to buy six generic drugs at a lower cost

Jan 18, 2013 | News

Compiled by Sara Miller

By Bastet78 (Own work) [GFDL ( or CC-BY-SA-3.0-2.5-2.0-1.0 (], via Wikimedia Commons

The decision is expected to save provincial governments about $100 million. COURTESY Wiki Commons

The decision, scheduled to take effect April 1, will save an expected $100 million in provincial healthcare spending.

The plan, which includes all provinces and territories with the exception of Quebec, will team up to buy six widely used generic drugs which represent about 20 per cent of publicly money spent on these specific drugs in Canada.

The drugs that are included in the plan range from treating depression to treating high cholesterol.

The price will be set at 18 per cent of the cost of brand-name drug versions.
Canada is currently paying between 25 and 40 per cent of the brand-name price, which is negotiated with the each brand-name drug manufacturer.

The plan was first announced in a discussion raised by premiers at the Health Care Innovation Working Group at the Council of the Federation meeting held in Halifax July 2012. The group’s leaders Prince Edward Island Premier Robert Ghiz and Saskatchewan Premier Brad Wall, issued a 26-page report discussing the benefits of provinces working together to reduce the cost of drugs and making health care in Canada affordable and proposed the plan during the meeting.

“Drug plan costs are increasing for all Canadians,” Ghiz said in a news release on Friday.

“In recent years, the generic drug industry has worked with provincial and territorial drugs plans to lower generic drug prices in Canada and with (this) announcement, we will realize savings that will ensure more dollars for provincial health care systems across Canada.”

Generic Pharmaceutical industry not so pleased

In response to the announcement, the Canadian Generic Pharmaceutical Association, which represents manufacturers and distributors of generic pharmaceutical products, said they are happy with the decision.

“CGPA is pleased that provincial governments have decided not to proceed with tendering for generic pharmaceutical products. Tendering for generic drugs could result in drug shortages and delayed savings to Canada’s health-care system,” said CGPA President Jim Keon said in a news release posted on the organization’s website.

But the CGPA stated that they were disappointed with further cuts to the price of generic drugs.

“Retail or reimbursed prices of generic prescription drugs have been dramatically reduced across Canada over the past few years,“ Keon said in the release.