Pharma companies say plan will lead to drug shortages
In a bid to restore healthy price competition in the prescription-drug space, Quebec Health Minister Gaetan Barrette has announced calls for tender on generics starting July 1. Assuming the minister’s move works out, analysts estimate it could cut the province’s yearly $800-million medication bill by 25% to 35%.
“If they don’t bid, it’s a slap in the face to all Canadians,” he told the Globe and Mail. “The message will be very clear from the industry: ‘You pay more, Canadians, because we think you should pay more.’”
According to Jim Keon, president of the Canadian Generic Pharmaceutical Association, individual companies are faced with a tough decision: to walk away from the sizeable Quebec market, or to give in to the minister’s process — which the industry is calling a mistake.
“With tendering, [drug companies] won’t be able to cover their costs for creating new generic drugs and make some kind of return on it,” Keon told the publication. According to the group, the plan to have individual companies compete for multi-year contracts could lead to drug shortages, and will force some to leave the market or move out of Canada.
Under the current drug-pricing system, most provinces negotiate with generic companies to settle on a price that’s a percentage of the equivalent brand-name drug. Quebec looks at the prices negotiated by other provinces and pays the lowest one.
Meanwhile, pharmacists are in charge of selecting which pill to prescribe to patients. They receive rebates of up to 70% of the drug’s price from the companies, and the rebates are worked into the cost paid by government, consumers, and insurers. Under its planned reforms, Quebec is also limiting those rebates to 15%.
“There’s very good evidence internationally that we’re still paying way too much for drugs,” said Michael Law, Canada Research Chair in Access to Medicines at the University of British Columbia. “If Quebec can squeeze more money out of this, there’s no reason to believe it will be limited to Quebec.”
According to Law, other provinces have tried and failed to institute drug-tendering processes, but the large scale of Quebec’s bidding plan makes it hard for companies to ignore the market. And since provinces have been hitting the drug companies with other reforms for a decade, the stakes are lower, making companies slightly less likely to resist.
“But you’re still breaking decades of pricing history and money flows,” Law told the Globe and Mail. “You’re going to have to figure out ways to make sure the system operates properly, particularly at the pharmacy level.”
Christopher Augé is president of the Association professionnelle des pharmaciens salariés du Québec, which represents salaried pharmacists in the province. He said he applauds the government’s aim to lower drug prices, but he sees implications on the drug ordering process: pharmacists will have to explain changes in drug brand availability to patients, and pharmacies will likely be forced to order from multiple suppliers rather than one wholesale distributor as the government requires specific drug suppliers for specific drugs.
“They make the decisions and leave us to assume the consequences,” Augé said. “That’s what’s irritating.”
Related stories:
Kingston woman leads grassroots campaign for universal pharmacare
Ontario’s pharmacare proposal could ease burden for benefit plan providers
“If they don’t bid, it’s a slap in the face to all Canadians,” he told the Globe and Mail. “The message will be very clear from the industry: ‘You pay more, Canadians, because we think you should pay more.’”
According to Jim Keon, president of the Canadian Generic Pharmaceutical Association, individual companies are faced with a tough decision: to walk away from the sizeable Quebec market, or to give in to the minister’s process — which the industry is calling a mistake.
“With tendering, [drug companies] won’t be able to cover their costs for creating new generic drugs and make some kind of return on it,” Keon told the publication. According to the group, the plan to have individual companies compete for multi-year contracts could lead to drug shortages, and will force some to leave the market or move out of Canada.
Under the current drug-pricing system, most provinces negotiate with generic companies to settle on a price that’s a percentage of the equivalent brand-name drug. Quebec looks at the prices negotiated by other provinces and pays the lowest one.
Meanwhile, pharmacists are in charge of selecting which pill to prescribe to patients. They receive rebates of up to 70% of the drug’s price from the companies, and the rebates are worked into the cost paid by government, consumers, and insurers. Under its planned reforms, Quebec is also limiting those rebates to 15%.
“There’s very good evidence internationally that we’re still paying way too much for drugs,” said Michael Law, Canada Research Chair in Access to Medicines at the University of British Columbia. “If Quebec can squeeze more money out of this, there’s no reason to believe it will be limited to Quebec.”
According to Law, other provinces have tried and failed to institute drug-tendering processes, but the large scale of Quebec’s bidding plan makes it hard for companies to ignore the market. And since provinces have been hitting the drug companies with other reforms for a decade, the stakes are lower, making companies slightly less likely to resist.
“But you’re still breaking decades of pricing history and money flows,” Law told the Globe and Mail. “You’re going to have to figure out ways to make sure the system operates properly, particularly at the pharmacy level.”
Christopher Augé is president of the Association professionnelle des pharmaciens salariés du Québec, which represents salaried pharmacists in the province. He said he applauds the government’s aim to lower drug prices, but he sees implications on the drug ordering process: pharmacists will have to explain changes in drug brand availability to patients, and pharmacies will likely be forced to order from multiple suppliers rather than one wholesale distributor as the government requires specific drug suppliers for specific drugs.
“They make the decisions and leave us to assume the consequences,” Augé said. “That’s what’s irritating.”
Related stories:
Kingston woman leads grassroots campaign for universal pharmacare
Ontario’s pharmacare proposal could ease burden for benefit plan providers
