A report from the Patented Medicine Prices Review Board (PMPRB)
compares generic drug prices in Canada with those of other
industrialized countries. The report was released on December 1,
2014 and highlights the changes that have taken place with generic
drug pricing in Canada from 2011 to the first (Q1-) and second
(Q2-) quarter of 2013.
Canadian generic-to-brand price comparison
The price of generic drugs in Canada has been markedly reduced
in recent years with the implementation of provincial generic drug
pricing policies. The PMPRB's analysis compared the price of
generic drugs in Canada to the brand product and found that gap
between brand and generic prices is widening. The typical price of
generic drug fell from 56% in Q1-2011 to 39% of the brand price in
Q1-2013.1 In Ontario, it is reported that in
Q2-2013, the price of generic drugs was 31% of the brand price.
Foreign-to-Canadian generic drug prices
Although the price of generic drugs in Canada has been markedly
reduced, generic drugs prices are still more expensive in Canada
than in comparative foreign markets2. The PMPRB reports
that the average foreign price for generic drugs by Q1-2013 was 32%
lower than corresponding Canadian drugs.
The foreign-to-Canadian price comparison was also analyzed by
major therapeutic class3, which confirmed that foreign
prices are typically lower than Canadian prices. The results from
this analysis also reveal that the gap between foreign and Canadian
generic drug prices is larger where the market size is larger. For
example, foreign prices are 39% lower than Canadian prices for
drugs with annual sales in Canada of greater than $10 million. This
is notable since generic drugs with medium to large size markets
($5 million or more in annual Canadian sales) made up more than 80%
of the 2013 generic drug sales in Canada.
Foreign-to-Ontario generic drug prices
The PMPRB also conducted foreign-to-Ontario generic drug
price ratios, which showed that generic drug prices in Q2-2013 were
less than Q1-2013, however, the top-selling generic drugs are still
on average 25% lower in foreign markets. The pan-Canadian Generic
Value Price Initiative, which aims to reduce the price of 18 drugs
to 18% of the brand price by April 1, 2016 was implemented in April
1, 2013, with 10 of the most common generic drugs currently being
priced at 18% of the brand price.4
Although the additional generic drug pricing reductions that
occurred in mid-2013 are not fully captured by this report, the
data suggests that the pan-Canadian Generic Value Price Initiative
can reduce the gap between Canadian and foreign generic drug prices
in the future.
2 International price comparisons include 11
countries: France, Germany, Italy, Sweden, Switzerland, the United
Kingdom, the United States, Netherlands, Spain, Australia and New
3 The major therapeutic class is based on the
Anatomical Therapeutic Classification (ATC) at level 1.
4 The ten drugs subject to the pan-Canadian Generic Value
Price Initiative include: atorvastatin calcium, ramipiril,
venlafaxine hydrochloride, amlodipine, omeprazole, rabeprazole
sodium, rosuvastatin, pantoprazole, citalopram and
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