Generic drugs still more expensive in Canada

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Patented Medicine Prices Review Board

On December 11, 2014 the Patented Medicine Prices Review Board (PMPRB) released the 2013 National Prescription Drug Utilization Information System (NPDUIS) report on Canadian generic drug prices. The report, titled Generic Drugs in Canada, 2013, compares generic drug prices in Canada with those in other industrialized countries. The PMPRB has been reporting regularly on generic drug prices under the NPDUIS initiative.

The report, which focuses on generic drug prices in Canada in the first six months of 2013, finds that when compared to their branded counterparts, prices of generic drugs in Canada have declined significantly since 2010. This is mainly due to the collaborative efforts of provincial governments to implement more rigorous generic reimbursement policies, a trend that is expected to continue under the recently announced pan-Canadian Value Price Initiative. However, despite these efforts, international generic drug prices remain appreciably lower than Canadian prices, reducing the price gap by only three percentage points since 2011, from 35% to 32% relative to the international average. The report notes a narrower price gap in the second quarter of 2013 between international prices and those reimbursed by the Ontario Drug Benefit Program (25%), which is thought to be more reflective of the impact of the pan-Canadian Generic Value Price Initiative and results going forward.

The data reported in this study represents a snapshot in time. Given the dynamic nature of this market, the PMPRB will continue to report on generic prices in Canada to contribute to the sustainability of the health care system by providing policy makers with relevant and timely analysis to support evidence-based decision making.

Quick facts

• The analysis covered a comprehensive set of 487 leading generic drugs, which accounted for 79.1% of all Canadian generic manufacturer-level sales.
• International multilateral price comparisons encompass the seven countries the PMPRB considers in reviewing and reporting on the prices of patented drug products: France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States. Four other countries are also included in the bilateral price comparisons: the Netherlands, Spain, Australia and New Zealand.
• Canadian manufacturer prices for generic drugs have fallen markedly relative to their branded counterparts with reductions in the relative price levels ranging from 56% of the brand price in the first quarter of 2011 to 31% in the second quarter of 2013.
• For the first quarter of 2013, average international prices for generic drugs were 32% lower than Canadian prices; a modest improvement over 2011, when international prices were 35% lower.
• The Ontario prices in the second quarter of 2013 more accurately reflect the evolving domestic generic policies. The price differential was less pronounced in this case, with mean international prices 25% lower than in Ontario.
• The gap between prices for foreign and Canadian generic drugs is widest for larger selling drugs and drugs for which there are a substantial number of suppliers competing in the marketplace.