Canada pays too much for generic drugs: study

A lab technician counts pills at a pharmacy on March 8, 2012 in Quebec City. THE CANADIAN PRESS/Jacques Boissinot.
A lab technician counts pills at a pharmacy on March 8, 2012 in Quebec City. THE CANADIAN PRESS/Jacques Boissinot.

OTTAWA – Canada is still paying far more than other industrialized countries for generic drugs, despite recent efforts by the provinces and territories to cuts costs by bulk-buying six particularly costly medications, a new study has found.

The study by the University of Ottawa and the Bruyere Research Institute says the price tags on the six drugs — which include medications for high blood pressure and high cholesterol — remain much higher in Canada than they are elsewhere.

While Canadians are saving some money under the bulk-purchasing scheme, they’re still spending much more than people in the U.K., Germany, New Zealand, Sweden and the United States, the report concludes.

READ MORE: Calls growing for national prescription drug program

In April 2013, the provinces and territories reached an agreement at a Council of the Federations meeting to pay significantly lower prices for the six drugs — amlodipine, atorvastatin, omeprazole, rabeprazole, ramipril, and venlafaxine — by joining forces to buy them in bulk.

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Those medications account for about 20 per cent of publicly funded spending on drugs.

They expected the lower price they paid for the generics — just 18 per cent of the cost for the brand-name drug — would save up to $100 million.

The study, published Tuesday on, found that the bulk-buying plan “saves some money compared with prices paid in the past.”

But it faults the provinces and territories for establishing a set price ceiling for generics at 18 per cent of the cost of brand-name drugs, saying they could drive much harder bargains with a national competitive bidding process of the type that thrives in other countries.

The bulk-buying efforts remain “grossly deficient when one considers the opportunity costs that Canada sustains annually by refraining from adopting one of the alternative systems proven to be more effective in its peer countries,” the study says.

Canada pays too much for generic drugs: study by TheCanadianPress

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“Why the Council has decided against taking one of these or a similar approach at this time is unknown.”

One of the study’s authors said Canadian prices for some of the medications are more than double those of peer countries.

Jason Nickerson, a clinical investigator at Bruyere, also noted that some of those countries were buying the medications from a Canadian company, Apotex, at substantially lower prices than Canadians are paying.

New Zealanders pay 87 per cent less for the blood pressure medication amlodipine, for example, while veterans in the U.S. pay 94 per cent less for the anti-depressant venlafaxine.

Health Minister Rona Ambrose’s office said she’s working with the provinces and territories on “innovative solutions” to high drug prices.

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“As the minister has said before, we’re willing to be involved in bulk drug purchasing plans that provinces are working on,” a spokesman for Ambrose said in an email.

High generic drug prices in Canada have prompted calls for a national pharmacare program. Under pharmacare, prescription drugs would be covered through a publicly funded system rather than out-of-pocket.

Canada, with its aging population, is the only industrialized nation with universal health insurance but no public coverage of prescription drug costs.

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An estimated one in 10 Canadians can’t fill prescriptions because of the expense. The Organization for Economic Co-operation and Development has also found that Canada has the second-highest per-capita spending on prescription drugs in the OECD.

A recently released study commissioned by the Canadian Federation of Nurses Unions determined there are potential savings of up to $11.4 billion a year for Canadian taxpayers via pharmacare due to decreased drug costs and reduced administration fees.

Ambrose hasn’t committed to a national pharmacare strategy.

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