The federal government is joining a drug-buying alliance with Canada’s provinces and territories, health officials said Tuesday. The move should reduce the cost of brand name and generic drugs as officials gain more negotiating power from buying medication in bulk.
Health Canada says the pan-Canadian Pharmaceutical Alliance wrapped up 89 negotiations for buying brand name drugs, saving $490 million in the process.
“I am impressed and encouraged by the cost savings that the pan-Canadian Pharmaceutical Alliance has achieved to date and I am looking forward to working together to negotiate better prices for prescription drugs,” Jane Philpott, the federal minister of health, said in a statement.
Ottawa says the partnership should provide added benefits to First Nations and Inuit, the RCMP, the Canadian Forces, veterans, federal inmates and refugees. Its Ottawa that doles out drug programs to these groups.
Academics and health policy experts have called for a universal drug plan for years.
When provinces strike up their own individual deals with drug companies, they’re missing out on opportunities to buy in bulk as a whole nation, experts told Global News last March.
“This has been on the radar many times – commissions have recommended it, policymakers talk about it, it’s been an election issue. There’s definite awareness that we’d do much better if we came together and worked together in bulk purchasing,” Dr. Danielle Martin, a Women’s College Hospital physician and assistant professor at the University of Toronto, told Global News.
“[Universal drug coverage] is entirely within reach and would even be cost neutral. You wouldn’t be spending one penny more than we do now,” she said.
In 2013, University of British Columbia researcher Dr. Steve Morgan, told Global News that it’s large countries with multi-level health care systems that lose out on drug pricing. New Zealand, for example, is a much smaller nation but it leverages its universal drug plan to lower its prices.
Canada pays about 20 per cent more for brand name drugs. Meanwhile, countries that negotiate the supply of generic drugs pay 90 per cent less than we do, Morgan said.
Tylenol or Advil, for example, would be about a fifth more expensive in Canada, while their generic counterparts, acetaminophen and ibuprofen, would be marked up by 90 per cent compared to other countries’ prices.
Canada’s ministers are currently in Vancouver to discuss health care issues, such as chronic diseases and drug costs.
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