Drug price benchmark change and reorganized purchasing system among possible solutions
“Canadians are going to see that we are going to be able to save [them] in the order of billions of dollars per year.”
So promised Federal Health Minister Jane Philpott after acknowledging studies showing that Canadians pay the second-highest drug prices in the world – a situation she called “unfair” in an interview with the fifth estate of CBC News.
The disparity can be seen in drug prices for Canada and New Zealand. Amlodipine, a popular blood pressure treatment made by Apotex, costs $130 annually in Canada, but it costs only $10 a year in New Zealand. Amoxicillin from the same company sells for nearly $200 a year in Canada, whereas Kiwis only have to pay about $32 for the same medication.
Part of the problem is the way regulators control patented drug prices in Canada. The price Canadians pay is kept in line with the average price paid by seven other countries. The US, the only country that pays more for drugs than Canada, is among those countries.
Philpott wants to take the US off the list and replace it with a nation like New Zealand, where drug prices are among the lowest in the world. She also wants to change Canadian regulations to compel patented drugmakers to reduce their prices and push provincial-federal negotiations to decrease generic drug prices. “We are going to be introducing some of this work in the coming months," she told the fifth estate.
Aside from Philpott’s proposals, changing Canada’s drug purchasing system can also help decrease prices. This is what New Zealand has achieved through its central drug purchasing agency PHARMAC.
PHARMAC regularly negotiates rebates as high as 99% off list prices for generic drugs, allowing Kiwis to get drugs virtually free. They have to pay only $5 for a prescription, regardless of the drug’s actual cost. The downside, however, is that the country can’t afford to cover all drugs: a recent report from Medicines Australia revealed that New Zealand is behind most developed countries in terms of speedy access to new drugs.
In Canada, drug purchasing is split between two bodies: a public system funded by provincial and federal governments for poorer, older, and indigenous Canadians; and a private system, mostly employer-funded, for Canadian workers. About 20% of Canadians pay for their own drugs. Some analysts say that setting up a central purchasing agency will result in greater bargaining power and lower drug prices.
“The new medicines coming to market are increasingly hundreds of thousands of dollars per year, per patient,” said University of British Columbia health economist Steve Morgan. “If we don't find a solution in the next 10 years, things will have collapsed.”
Related stories:
Excess med spending in Canada is pouring billions down the drain
Universal pharmacare is the cure for high Canadian drug costs, says expert
So promised Federal Health Minister Jane Philpott after acknowledging studies showing that Canadians pay the second-highest drug prices in the world – a situation she called “unfair” in an interview with the fifth estate of CBC News.
The disparity can be seen in drug prices for Canada and New Zealand. Amlodipine, a popular blood pressure treatment made by Apotex, costs $130 annually in Canada, but it costs only $10 a year in New Zealand. Amoxicillin from the same company sells for nearly $200 a year in Canada, whereas Kiwis only have to pay about $32 for the same medication.
Part of the problem is the way regulators control patented drug prices in Canada. The price Canadians pay is kept in line with the average price paid by seven other countries. The US, the only country that pays more for drugs than Canada, is among those countries.
Philpott wants to take the US off the list and replace it with a nation like New Zealand, where drug prices are among the lowest in the world. She also wants to change Canadian regulations to compel patented drugmakers to reduce their prices and push provincial-federal negotiations to decrease generic drug prices. “We are going to be introducing some of this work in the coming months," she told the fifth estate.
Aside from Philpott’s proposals, changing Canada’s drug purchasing system can also help decrease prices. This is what New Zealand has achieved through its central drug purchasing agency PHARMAC.
PHARMAC regularly negotiates rebates as high as 99% off list prices for generic drugs, allowing Kiwis to get drugs virtually free. They have to pay only $5 for a prescription, regardless of the drug’s actual cost. The downside, however, is that the country can’t afford to cover all drugs: a recent report from Medicines Australia revealed that New Zealand is behind most developed countries in terms of speedy access to new drugs.
In Canada, drug purchasing is split between two bodies: a public system funded by provincial and federal governments for poorer, older, and indigenous Canadians; and a private system, mostly employer-funded, for Canadian workers. About 20% of Canadians pay for their own drugs. Some analysts say that setting up a central purchasing agency will result in greater bargaining power and lower drug prices.
“The new medicines coming to market are increasingly hundreds of thousands of dollars per year, per patient,” said University of British Columbia health economist Steve Morgan. “If we don't find a solution in the next 10 years, things will have collapsed.”
Related stories:
Excess med spending in Canada is pouring billions down the drain
Universal pharmacare is the cure for high Canadian drug costs, says expert
