The Canadian Generic Pharmaceutical Association (CGPA), which represents Canadian generic drug manufacturers, announced recently that it had reached a deal with federal, provincial and territorial governments that would lower the price of generic drugs.
The CGPA offering the lower price deal across the country wasn’t due to a sense of benevolence on the part of generic drug Manufacturers but rather to the Quebec government threatening to put to tender the purchase of frequently prescribed drugs.
The threat of governments putting the purchasing of drugs to tender evidently alarmed generic drug manufactures and rather than submit to competition within the industry, the CGPA came back to the Quebec government with an offer to reduce the price of medications up to 38 percent.
Anticipating the domino effect where all provinces and territories would demand the same deal, the CGPA offered the same deal to all provinces and territories.
The CGPA paints a rather benevolent picture of itself saying that it “represents a dynamic group of companies who specialize in the production of high quality, affordable generic prescription medicines and active pharmaceutical ingredients. Our members and the 11,000 Canadians who work in our industry play a vital role in the economy and support a sustainable health-care system by providing Canadians with safe, effective, affordable prescription medicines.”
The last claim of “affordable prescription medicines” is a bit of a stretch considering the CGPA, when threatened with a competitive, tendering process, could drop the price by 38 percent and, one would assume, remain profitable.
While a 38 percent price drop in the most commonly prescribed medications is very good news for Canadians, it also gives rise to a few blatantly obvious questions.
That the generic drug industry could lower its prices so dramatically when threatened with a tendering system, it is obvious that the manufacturers were gouging the Canadian taxpayer all along.
And why did the idea of putting to tender the purchasing of drugs take so long in Quebec or any other province, when virtually all other government acquisitions are subject to the tendering process?
It is unthinkable that governments and the Pan-Canadian Pharmaceutical Alliance (PCPA), the collective that represents most provinces and territories in negotiating lower prices on prescription drugs, were blissfully unaware of the profiteering within the generic drug industry.
If the industry came back to the Quebec government with such a favourable offer, it is reasonable to assume that the price of prescription drugs would be even lower if purchasing was put to tender.
This matter is a considerable issue, considering that in excess of 70 percent of prescriptions reimbursed under public drug plans are for generic drugs.
Published on the CBC website, a price comparison between the cost of 100 pills of various commonly prescribe medications in Canada and New Zealand begs the question why a country with a population of little more than 4.5 million can purchase generic drugs at such drastically lower prices .
For instance, according to the CBC comparison, the high cholesterol drug, Atorvastatin 80mg costs $23.42 in Canada for 100 pills and $6.58 in New Zealand.
Olanzapine 10mg, prescribed for depression and schizophrenia costs $70.88 in Canada and $5.35 in New Zealand.
As of April 1, approximately 70 of the most commonly prescribed generic drugs will come down in price, which of course is a positive development.
However, provincial and territorial governments along with the PCPA should not see this as an outright victory but instead, as an ongoing campaign to receive realistic prices.