Provinces negotiate savings for selected generic drugs

(Shutterstock)

(Shutterstock)

QMI Agency and REUTERS

, Last Updated: 5:52 PM ET

REGINA - Provinces have agreed to new price caps on six widely used generic drugs, and hinted more might join the list, in an effort to reduce costs for both private and public health plans.

Prices of the six drugs will be capped at 18% of their brand-name equivalent, an interprovincial policy group said on Friday. That's a change from the previous 25-40% cost versus the brand name prices.

"We all know medicine is costly. We know someone who has struggled with those costs whether they are in a drug plan or not in a drug plan," Saskatchewan Premier Brad Wall said after the announcement Friday.

"This is a start. There's a lot more work that can be done on generics."

Wall, who co-leads an interprovincial health care working group behind the initiative along with P.E.I. Premier Robert Ghiz, said he and Ghiz would discuss next steps with health ministers this spring.

"We'll say, let's move again on the next tranche of generics, perhaps, but let's engage with industry. Maybe it's not a price point - maybe industry has some ideas," he said. "So I don't think we'll rule anything out."

The working group said in July that it would start by cutting the costs of three to five generic drugs, but Wall said they made more progress than expected.

The province of Quebec is not participating in the initiative, although Quebec already matches its prices to the lowest rates available elsewhere in Canada.

The first group of six drugs accounts for 20% of public spending on generic drugs in Canada, the provinces said in a statement, saving up to $100 million on public drug plans alone.

They include medications to treat high blood pressure, high cholesterol, acid reflux and depression.

The new rates will take effect in all participating jurisdictions by April 1.

The agreement is the first co-ordinated effort in a broad push by individual Canadian provinces to cut the prices they pay for generic drugs. The changes began in Ontario and spread, to varying degrees, across the country.

Canada has a reputation for relatively cheap branded prescription drugs. However, a flurry of studies in the mid-2000s found its generic drug prices were unusually high.

But the initiative to lower them further could come at the expense of pharmacy chains.

Shoppers Drug Mart stock dropped 5% on Friday afternoon after the announcement was made public.

- with files from Allison Martell/Reuters and Lisa Mrazek/QMI Agency


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